ENERGY Resources Australia says long-term demand for uranium is likely to remain strong with China to drive demand growth in the next decade. 

 

The yellowcake miner also says it is well positioned to take advantage of the robust market for uranium with projects in 2009 to increase production capability. 

 

Uranium has not been subject to as severe a downturn in demand and prices that has beset the market for many other mineral commodities, ERA says in its annual report released on Friday. 

 

"As market prices have risen, the long term fundamentals for the uranium market remains strong," ERA said. 

 

"Overall, the supply and demand balance in uranium markets point to sustained higher prices in the medium term," the company said. 

 

ERA concluded its first sale of uranium to China last year and says that country will drive demand growth for its product. 

 

"The most significant growth in demand for uranium in the next decade will come from China." 

 

ERA posted a record annual net profit for calendar 2008 of $221.79 million against $76.09 million result in 2007, a figure boosted by a large settlement from its insurers. 

 

ERA received $188 million pre-tax for damages and mine disruptions caused by flooding at its Ranger mine in the Northern Territory in 2006 and 2007 and losses suffered from a failure in an acid plant in 2006. 

 

Nevertheless, underlying earnings totalled $119 million for the year, up 56 per cent on the prior 12 months, also a record high.