ENERGY Resources of Australia has lifted its annual production by 14 per cent on better operational performance and higher grades.

Shares of the uranium miner were up 4.6 per cent to $18.97 by late morning. The benchmark S&P/ASX 200 Index was flat.

The company, which is majority owned by takeover target Rio Tinto and operates the Ranger mine in the Northern Territory, produced 5,412 tonnes of uranium oxide in calendar 2007.

“The 2007 annual production is the second highest annual production on record for the Ranger mine,” it said.

ERA said the result was pleasing given rain-related problems at the mine last March.

“The exceptionally heavy rainfall at the Ranger mine in the March quarter of 2007 resulted in an elevated water level in the operational pit, preventing access to higher grade ore,” it said.

“ERA successfully deployed a number of strategies to increase the rate of water removal from the operational pit.

“This resulted in an increase in the grade of ore, as the higher grade was located towards the bottom the pit.”

During the fourth quarter of 2007, production totalled 1,553 tonnes, up 14 per cent from the third quarter but down 7 per cent from the same period in 2006.

“Drummed production of 1,553 tonnes of uranium oxide in the fourth quarter of 2007 was 14 per cent higher than the third quarter of 2007 due largely to the higher mill head grade,” ERA added.

“This was a result of the higher grade ore mined in the bottom of the pit.”

Ore milled in the fourth quarter, at 484,333 tonnes, was 1 per cent higher than the third quarter. Ore mined in the quarter, at 764,372 tonnes, was 9 per cent higher than the third quarter, due to improved access after the lowering of water levels in the pit.

The pit was emptied of water in November.

“Mining is now focused on stockpiling sufficient ore to lessen the impact on future production should the wet season be unusually heavy,” ERA said.

The spot market price of uranium at the end of December was $US89.50 per pound, up from $US72 in 2006. ERA's average realised sales price of uranium oxide for the year was $US25.06 per pound, up from $US18.36 in 2006.