Australia's Energy Resources posts 587 pct surge in H1 profit
AAP
Trading Markets
Uranium miner Energy Resources of Australia Ltd (ERA) (ASX:ERA) has delivered a spectacularly sharp jump in interim profit underpinned by strong prices, and inked an agreement to supply the commodity to a Chinese electric utility.
Profit for the six months to June 30 climbed 587 per cent rise to A$38.95 million (US$37.26 million) on the same period in 2007.
The strong result was underpinned by a 111 per cent increase in the average uranium sale price to US$35.69 per pound.
ERA posted a six per cent decrease in output for the half to 2,357 tonnes due to lower grades and restricted access to the open pit at the Ranger mine in the Northern Territory due to exceptionally inclement weather during wet season.
ERA forecast full year production to return to normal levels of between 5,400 tonnes and 5,900 tonnes of uranium oxide after the water was emptied from the open pit.
Shares in ERA, which is 68.4 per cent-owned by Rio Tinto Ltd (ASX:RIO), dropped 55 cents, or 2.37 per cent to $22.65.
ERA today said it had reached in principle an agreement for a contract to supply uranium oxide to an as-yet unnamed electric utility in China from the second half of 2008.
ERA, which produces about a 10 per cent of the world's uranium, said the agreement was reached after the signing of a bilateral safety agreement between the Chinese and Australia governments.
Rio Tinto energy chief executive Preston Chiaro today told a briefing that China would be the main driver of increased global power demand that was expected to grow "particularly strongly".
Mr Chiaro said power demand globally would by 3.7 per cent a year to 2020, with China accounting for 44 per cent of that demand growth.
The Ranger mine is about 250 kilometres east of Darwin.
Profit for the six months to June 30 climbed 587 per cent rise to A$38.95 million (US$37.26 million) on the same period in 2007.
The strong result was underpinned by a 111 per cent increase in the average uranium sale price to US$35.69 per pound.
ERA posted a six per cent decrease in output for the half to 2,357 tonnes due to lower grades and restricted access to the open pit at the Ranger mine in the Northern Territory due to exceptionally inclement weather during wet season.
ERA forecast full year production to return to normal levels of between 5,400 tonnes and 5,900 tonnes of uranium oxide after the water was emptied from the open pit.
Shares in ERA, which is 68.4 per cent-owned by Rio Tinto Ltd (ASX:RIO), dropped 55 cents, or 2.37 per cent to $22.65.
ERA today said it had reached in principle an agreement for a contract to supply uranium oxide to an as-yet unnamed electric utility in China from the second half of 2008.
ERA, which produces about a 10 per cent of the world's uranium, said the agreement was reached after the signing of a bilateral safety agreement between the Chinese and Australia governments.
Rio Tinto energy chief executive Preston Chiaro today told a briefing that China would be the main driver of increased global power demand that was expected to grow "particularly strongly".
Mr Chiaro said power demand globally would by 3.7 per cent a year to 2020, with China accounting for 44 per cent of that demand growth.
The Ranger mine is about 250 kilometres east of Darwin.