RIO Tinto's locally listed uranium subsidiary, Energy Resources of Australia, has delivered more bad news, slashing uranium reserves by 46 per cent and shelving a planned expansion.

The Darwin-based ERA has also reported a first-half net loss of $121.75 million, down from a $22.7m profit a year earlier.

The loss included a $99.4m inventory writedown because of the shelved project, which would have processed stockpiles through acid-leaching, and a surprise reduction in grades of other stockpiles that ERA had planned to process.

The woes add to ERA's dismal first-half production from its Ranger uranium mine after heavy rains stopped its plant, as well as to an ailing outlook for uranium markets in the wake of the Fukushima nuclear disaster.

In response to yesterday's result, ERA's shares slumped 42c, or 10 per cent, to a seven-year low of $3.92, despite the underlying loss of $22.3m beating analysts' forecasts and the approval of the $120m underground Ranger Deeps exploration decline.

The stock is now down 70 per cent in the past year, representing a $1.3 billion loss for Rio, which has a 68.4 per cent stake in ERA.

ERA chief executive Rob Atkinson said he thought yesterday's good news outweighed the bad.

"The good news for ERA is the exploration decline being approved and the very large exploration program we are going to embark on," he said.

"Even on the downside issues, those are important business elements, and as we increase our knowledge we do get greater levels of comfort."

Mr Atkinson said the heap leach project would not go ahead because of high capital costs and the headwinds of a high dollar and faltering uranium markets after Fukushima.

The company also pointed to "uncertainty in regards to stakeholder support".

The traditional owners of ERA's ground, the Mirrar people, have made it clear they do not want to approve further mining on the company's ground.

This could also impact ERA's ability to reap full benefits from the 34,000 tonnes of uranium resources at the Deeps project.

Mr Atkinson said some of the benefits could be realised before the 2021 limit on ERA's right to mine at Ranger, which is surrounded by Kakadu National Park.

He said also that ERA's production would not return to levels of 5000 tonnes a year it had hit before the floods.

ERA said it had engaged a financial adviser to develop a long-term funding plan, leading to investor concerns of an equity raising.

Rio said it supported the plans, subject to internal approvals.

ERA's uranium reserves fell from 29,800 tonnes to 16,000.

Of this, 6100 tonnes were lost because ERA stockpiles, which had been building for 30 years and are intended to be run through the plant to extract uranium, showed they were lower-grade than the company's records had indicated.