ERA poised for first uranium shipment to Chinese utility
Barry Fitzgerald
The West Australian
China is set to receive its first delivery of Australian uranium after last year’s signing of a bilateral safeguards agreement.
Rio Tinto-controlled Ranger uranium miner Energy Resources of Australia yesterday revealed it had secured a supply deal with an unnamed electric utility in China, with first deliveries due in the current December half year.
The deal is expected to be the first of many as China has launched itself into an ambitious nuclear power growth strategy. BHP Billiton has its sights set on the Chinese market to soak up the fourfold increase in uranium production to come with its expansion of the Olympic Dam mine in South Australia.
Rio, the subject of a hostile 3.4-forone scrip offer from BHP, has its own uranium expansion ambitions. It told analysts at a Sydney briefing it wanted to double output within five years.
Rio’s Rossing mine in Namibia produced 6.7 million pounds of uranium in 2007 and the Ranger mine produced 11.71 million pounds. On a combined basis, the mines account for 17 per cent of global production.
Olympic Dam at present accounts for 8 per cent of global production but could grow to more than 30 per cent when the operation is expanded.
Rio told the briefing it was in discussions that could lead to involvement in the Kazakhstan uranium industry. It is also exploring uranium opportunities in the Middle East.
ERA’s June-half profit from the Ranger mine, in the Northern Territory, was $38.9 million.
That was up strongly from $5.7 million previously and reflected an increase in the group’s average realised uranium price to $US35.69 a pound.
That was more than double the $US16.90/pound in the previous corresponding period but remained well short of the average long-term market price for the June half of $US90.83/ pound. That is because ERA still has “legacy” supply contracts that were written when uranium prices were much lower.
ERA has declared an interim dividend of 8¢ a share (compared with nothing previously).
It is fully franked. The record date for the dividend is August 26 and it will be paid on September 9.
ERA has not given up hope that it will one day get approval from traditional landowners to develop the big Jabiluka deposit, 20km from Ranger.
The traditional landowners are said to have been unmoved by the recent deal that saw the Martu people being cut in on the sale of Rio’s Kintyre deposit in WA to Canadian uranium giant Cameco.
Rio Tinto-controlled Ranger uranium miner Energy Resources of Australia yesterday revealed it had secured a supply deal with an unnamed electric utility in China, with first deliveries due in the current December half year.
The deal is expected to be the first of many as China has launched itself into an ambitious nuclear power growth strategy. BHP Billiton has its sights set on the Chinese market to soak up the fourfold increase in uranium production to come with its expansion of the Olympic Dam mine in South Australia.
Rio, the subject of a hostile 3.4-forone scrip offer from BHP, has its own uranium expansion ambitions. It told analysts at a Sydney briefing it wanted to double output within five years.
Rio’s Rossing mine in Namibia produced 6.7 million pounds of uranium in 2007 and the Ranger mine produced 11.71 million pounds. On a combined basis, the mines account for 17 per cent of global production.
Olympic Dam at present accounts for 8 per cent of global production but could grow to more than 30 per cent when the operation is expanded.
Rio told the briefing it was in discussions that could lead to involvement in the Kazakhstan uranium industry. It is also exploring uranium opportunities in the Middle East.
ERA’s June-half profit from the Ranger mine, in the Northern Territory, was $38.9 million.
That was up strongly from $5.7 million previously and reflected an increase in the group’s average realised uranium price to $US35.69 a pound.
That was more than double the $US16.90/pound in the previous corresponding period but remained well short of the average long-term market price for the June half of $US90.83/ pound. That is because ERA still has “legacy” supply contracts that were written when uranium prices were much lower.
ERA has declared an interim dividend of 8¢ a share (compared with nothing previously).
It is fully franked. The record date for the dividend is August 26 and it will be paid on September 9.
ERA has not given up hope that it will one day get approval from traditional landowners to develop the big Jabiluka deposit, 20km from Ranger.
The traditional landowners are said to have been unmoved by the recent deal that saw the Martu people being cut in on the sale of Rio’s Kintyre deposit in WA to Canadian uranium giant Cameco.