SHARES in Rio Tinto's listed uranium subsidiary, Energy Resources of Australia (ERA), have suffered a beating on the back of the company's sharply lower production effort at the Ranger uranium mine in the Northern Territory.

Market sentiment towards the stock was not helped by a downbeat assessment of the likelihood that uranium prices would pull out out of a spiral, notwithstanding forecasts of strong demand for uranium in the medium- to long-term.

ERA shares dropped $1.17 or 5.9 per cent to close at $18.52. Its forecast of near-term moves in the uranium price rubbed off on other uranium stocks, with Paladin Energy shares falling 3.45 per cent.

ERA said in its March quarter production report for Ranger that production had fallen by 27 per cent on the previous corresponding period, to 888 tonnes of uranium oxide. This was the result of downtime on a drill rig, which restricted blasting operations in the open-cut and slashed the amount of ore that could be mined by 59 per cent compared with the previous corresponding period.

It came on top of a forecast fall in production for the quarter, the result of a 41 per cent drop in ore grades as the mining operations proceeded through the open-cut.

ERA's chief executive, Rob Atkinson, said its production for 2010 would be a story of two halves, with weakness in the first offset by strength in the second. That is in keeping with the group's production performance in recent years.

Production for 2010 should again come in somewhere between 4800 tonnes and 5500 tonnes of uranium oxide, compared with the 3500 tonnes that an annualised March quarter effort would suggest.

ERA noted that uranium prices had weakened in the March quarter. Spot prices were $US41.75 a pound at the end of March. Long-term prices had fallen to $US59 a pound.

For the December half last year, ERA's realised uranium price was $US50.84 a pound. Despite all the talk about nuclear power providing an answer to global warming concerns, power utilities around the world are sitting on comfortable amounts of uranium to fuel their demands in the short term.

As a result, uranium prices have retreated from their 2007 average of more than $US100 a tonne.

Mr Atkinson said the medium- to long-term demand for uranium remained strong given the number of ''new build'' nuclear plants in China, the US, Japan, Taiwan, France and elsewhere.

He also said that there had been no progress in ERA's plan to develop the $20 billion Jabiluka uranium deposit near Ranger.

ERA has undertaken not to develop the deposit without the consent of the traditional owners.