Energy Resources of Australia Expects First-Half Loss -- 2nd Update

By Ross Kelly 

SYDNEY--Uranium producer Energy Resources of Australia Ltd. expects a first-half loss of up to 140 million Australian dollars (US$130 million) after a radioactive leak halted activities at its Ranger operation in the Northern Territory.

The company, which is 68% owned by Rio Tinto PLC, said it expects to restart operations at Ranger progressively beginning Thursday. Cleanup is complete and regulatory approval has been granted.

The leak of about 1 million liters of contaminated slurry, which occurred in December, was caused by toxic material eating through a steel tank involved in the process of refining ore.

Ranger is on land owned by the Mirarr indigenous people and surrounded by the world-heritage-listed Kakadu National Park. Investigations by authorities found the leak was contained within the mine site.

The company had already stopped mining uranium at the Ranger operation in late 2012 after its ore was depleted. But it continued to process stockpiled ore while it studied the feasibility of digging a new underground pit there called Ranger 3 Deeps.

The company expects a loss of A$120 million and A$140 million for the six months through December, in large part due to costs associated with the suspension of ore processing. That compares to a A$53.4 million loss in the year-earlier period.

Energy Resources of Australia has run up a string of losses in recent years, dogged by low uranium prices, disappointing output volumes and costs associated with the rehabilitation of the old mine site.

It expects to produce between 1,100 and 1,500 tons of yellow cake in the year through December.

Write to Ross Kelly at [e-mail]

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