Monday, 2 April, 2007

ABCMoney

Energy Resources of Australia Ltd said heavy rainfall at its Ranger mine in the Northern Territory in late February and early March will likely result in uranium production in 2007 coming in at 2006 levels, while production in 2008 is likely to be 25-35 pct lower than 2006.

Production from the Ranger mine in 2006 dropped 19.7 pct to 4,748 tons, also due to elevated water levels in the pit from high levels of rainfall over the wet season.

The Rio Tinto majority-owned miner, which was forced to declare force majeure in early March on its sales contracts as a result of the exceptional rainfall, said the shutdown and re-start of the processing plant resulted in the loss of approximately 300 metric tons of uranium oxide production.

Additionally, the elevated water level in the mine resulting from the high rainfall will restrict access to ore in the second half of 2007 and into 2008.

The company said this will have an impact on production in the second half of 2007. For the first half of the year and for some of the second half, ERA plans to process high grade ore that was mined during 2006 and stockpiled on the surface.

Company executives said they have identified a number of potential opportunities to reduce the impact of the weather event including accelerating the treatment and disposal of water, but they noted these options are currently being evaluated and in most cases regulatory approvals will be required.