Friday, 8 June, 2007

The Age

Uranium miner Energy Resources of Australia Ltd (ERA) expects to post a first half loss of up to $10 million, following heavy rainfall at its Ranger mine this year.

ERA, the world's third largest uranium producer, said it expected to deliver a first half loss between $5 to $10 million for the first half of 2007.

That would compare to a $19.9 million profit in the corresponding half and a $23.7 million profit in the second half of 2006.

ERA had to shutdown mining operations and the process plant at the mine near Darwin in late February following heavy monsoonal rain, which dumped 750 millimetres on the site in a 72-hour period.

The company declared force majeure on its sales contracts in early March as a result of the rainfall.

ERA shares dipped $1.18 or 5.27 per cent to $21.22.

In April, the company downgraded its production forecast for 2007 noting the rainfall event would likely result in a 35 per cent reduction in output on the 2006 figure of 4,478 tonnes of uranium.

ERA said it would stick by the production and sales guidance forecast earlier in the year.

"The anticipated pattern of sales deliveries for the remainder of 2007 should not affect ERA's earlier production and sales guidance, already announced to the market," the company said.

"While sales in 2007 and 2008 are expected to be generally in line with production, the timing of sales in 2007 will be heavily weighted in the second half of 2007."

The Ranger mine is no stranger to weather related disruptions, with tropical cyclone Monica causing a longer-than-planned acid plant shutdown last year, impacting production.

ERA is 68.4 per cent owned by major mining house Rio Tinto Ltd.