Major uranium miner Energy Resources of Australia (ERA) unveiled a $500 million rights issue on Wednesday to help solve a waste-water problem that had forced it to sharply cut production at its only mine and shelve an expansion project.

ERA has struggled since heavy rains swamped north Australia early this year, flooding the pits at its Ranger mine, raising fears of a spill of contaminated water into the World Heritage-listed tropical wetlands that surround it.

ERA, owned 68 percent by Rio Tinto but separately listed, said it would issue 12 new shares for every seven held at A$1.53 each, less than half their last-traded price of A$3.29 and fully underwritten. Rio Tinto would take up its full entitlement and also stand as a sub-underwriter.

About $270 million of the money would be used to fund an expansion of waste-water treatment at mine, including a brine concentrator which evaporates water that is then condensed and discharged as distilled water.

The rest of the money would also be used to fund exploration around the mine, which sits within the World Heritage-listed Kakadu National Park. Started in 1981, Ranger typically supplies about 10 percent of the world's uranium and has been dogged for years by controversies over leaks and spills.

"ERA takes water management very seriously," Chief Executive Rob Atkinson said in a statement.

"This capital allows ERA to progress the implementation of our water management strategy, which includes the construction of a brine concentrator and other initiatives, in as timely a manner as possible."

ERA this year took a A$99.4 million ($98.9 million) writedown after shelving a project to process stockpiles of uranium ore through acid-leaching, and due to a drop in uranium grades of other stockpiles that ERA had planned to process.

The decision was related partly to the water problem.

In announcing the share issue on Wednesday, ERA also gave its outlook for uranium demand, predicting continued volatility in the wake of the Fukushima nuclear disaster in Japan.

It forecast slower demand growth outside of China, and that China might exceed current consumption estimates.

ERA's output of uranium oxide in the third quarter was 1,010 tonnes, up from only 83 tonnes in the previous quarter as the wet season gave way to drier weather, the company said.

It maintained production guidance for the year of 2,600 tonnes of uranium oxide, well below production of around 5,000 tonnes it had hit before the floods.

Heavy rains stopped uranium processing operations at Ranger early in 2011 and were not restarted until mid-June. An ailing outlook for uranium markets in the wake of the Fukushima disaster further exacerbated ERA's situation.

ERA's exploration focus is on evaluating the potential for the development of its nearby Ranger 3 Deeps deposit, but it does not expect to reach a decision before 2014.

Without the new deposit, UBS warned in a client note that ERA would run out of ore to mine in about five years.

"Should Ranger 3 Deeps prove economic and gain stakeholder support, then mine life could extend to 2025 and beyond dependent on exploration success," UBS said.