Uranium miner Energy Resources of Australia’s (ERA’s) shares took a knock on Thursday, after the company posted a half-year loss of more than A$121.7-million.

This compares with a profit of A$22.6-million in the first six months of 2010.

The Rio Tinto subsidiary explained that its earnings were impacted by the suspension of processing operations at its Ranger mine, in response to the above average wet season in the Northern Territory.

Shares in ERA plunged 10% in Sydney to a low of A$3.89 a share following the announcement. By later afternoon, the stock traded at A$3.92 a share.

Revenue for the period rose to A$244.9-million, from A$217.7-million in the June half year in 2010, with revenue from the sale of uranium oxide increasing 12% to A$235.6-million.

Despite the increase in revenue, ERA reported that the sales volume for the half year was marginally lower at 1 825 t, compared with 1 892 t a year earlier. The miner noted that sales volumes were expected to be heavily weighted towards the second half of the year.

The higher revenue prices were ascribed to the higher average realised sales price for uranium oxide, as well as the strengthening Australian dollar.

Uranium oxide production fell to 601 t during the period under review, compared with the 1 717 t produced in the six months up to June 2010, owing to wet weather conditions.

The miner said on Thursday that with the progressive restart of the processing operations from June 15, ERA expected its full-year production to reach some 2 600 t.

Looking at the uranium market, ERA said that in the short term, the market would be well supplied owing to adequate inventory coverage held by utilities, along with increased production, especially from Kazakhstan.

Immediate demand was also expected to weaken after the Japan nuclear crisis, with the company adding that the spot price for uranium had been volatile.

The volatility was likely to continue until the situation in Japan was clearer and the outcomes of the safety reviews of nuclear power facilities in China were released, along with the subsequent impact on the current new build programme.

Long-term demand was expected to significantly exceed any market contractions as a result of the Japan crisis, and ERA said that it continued to envisage a strong future for uranium, including continued price and demand growth, with long-term demand exceeding planned capacity.