ENERGY Resources of Australia has begun laying the groundwork for extending the life of the Ranger operation inside Kakadu well beyond the current 2016 life estimate, with a modern mining agreement with traditional owners central to its investment plans.

The listed Rio Tinto subsidiary revealed yesterday that the mining agreement, previously tipped to be in place by mid-year, is very close to completion after 14 years of discussion.

Discussions started with the traditional owners on the renewal of the Ranger Project Area authority in 1998. Concluding a mining agreement that gives the Mirarr people greater benefits from mining will give ERA the confidence to make the investments required to extend Ranger's life.

The breakthrough with traditional owners comes as Julia Gillard is due to arrive in New Delhi next week for talks expected to eventually lead to Australia's first uranium sales to India. Uranium producers are banking on gaining access to the Indian market to pick up the slack after Japan and Germany retreated from nuclear power following last year's Fukushima disaster.

ERA's September quarter report, released yesterday, showed Ranger's production rebounded from the rain-affected levels of last year to 1239 tonnes, a 96 per cent improvement.

The rebound prompted ERA to disclose that it had narrowed the range of its production guidance for calendar 2012 from 3200-3700 tonnes of uranium to 3400-3700 tonnes. Production at Ranger is currently scheduled to come to an end in 2016. But ERA is about to start work on a $120 million tunnel to access 34,000 tonnes of uranium sitting deep beneath the Ranger 3 open-cut, which finishes production at the end of this year.

A $57m pre-feasibility study in to the development of the so-called Ranger 3 Deeps is due to be completed next year. The underground mine could be in production late in 2015, ensuring Ranger continues as Australia's longest continually-operated uranium mine.