THE Territory's only uranium mine had about $240 million wiped off its value within two hours yesterday after announcing that its processing plant was closing.

Shares in Energy Resources of Australia plunged by 12.89 per cent to $10.34 on the Australian Stock Exchange. Ranger, already reeling from a profits plunge, began shutting down the processing operation yesterday.

The closure stands to cost the company tens of millions of dollars in exports.

ERA said mining would continue but no ore would be processed for 12 weeks.

Managing director Rob Atkinson said the shutdown was a precaution to ensure any more torrential rain didn't push the tailings dam higher than allowed. He denied that he feared the dam would overflow and contaminate Kakadu National Park.

Mr Atkinson said safeguards made that impossible.

He also denied claims by the Environment Centre that traditional owners had refused to allow water in the tailings dam to go above the already agreed level. Mr Atkinson said the clay and rock dam walls were being raised by three metres.

Environment Centre head Stuart Blanch said closure of the processing plant showed the mine's water management plan wasn't working.

Ranger, the most productive uranium mine in Australia, has endured a disastrous year. Calendar year profits for 2010 slumped by 83 per cent to $47 million.

Mr Atkinson blamed three factors:

HEAVY rain in April and October cutting production;

A STRONGER Australian dollar; and

LOWER than expected grades.

Ranger was forced to buy 925 tonnes of uranium oxide from other mines.

One of the mine walls cracked and a water evaporation system installed at the cost of several million dollars didn't work. To cap it off, blasting went wrong at the end of the year and about $1 million worth of equipment was destroyed.

However, Mr Atkinson said Ranger's safety record was impeccable and uranium demand was picking up.