Energy Resources: Production Now Expected Down 18% In 2010

Production from Energy Resources of Australia Ltd.'s (ERA.AU) Ranger uranium mine is expected to be down as much as 18% in 2010 due to increased rainfall and hitting a patch of less productive ore, the company said Tuesday.

Forecast full-year production was downgraded from a previous expectation that it would be in line with 2009's level of 5,240 metric tons of uranium ore.

The level is now expected to be 4,300 tons to 4,700 tons, ERA said.

The company blamed the fall on working through low ore grades, higher-than-expected rainfall that prevented access to the lowest levels of the mine, and stability problems with the south wall of the mine.

Uranium oxide production over the past three months was down 7% on the first quarter and 44% on the second quarter last year, although the volume of material was up 40% on the previous quarter and down 54% on year.

Sales will remain "somewhat in excess of 5,000 tons" during 2010 due to inventory management, shipment flexibility, and secondary purchases, the company said, and July will see a return to the lower levels of the mine previously blocked by rainwater.

-By David Fickling, Dow Jones Newswires; [phone]; [e-mail]