October 15, 2009

Energy Resources Says 2009 Uranium Output May Be Flat

Oct. 14 (Bloomberg) -- Energy Resources of Australia Ltd., producer of about a 10th of the world’s mined uranium, said it expects 2009 output will be similar to the previous two years.

Third-quarter production increased 4 percent to 1,405 metric tons, or 3.1 million pounds, from 1,349 tons a year earlier, the Darwin-based company said in a statement today.

This was broadly in line with our expectations, David Paterson, general manager of communications and external relations, said by phone today from Darwin. We had some reduction in mining activity. At the same time, we had a positive performance in terms of ore milled.

The company, controlled by Rio Tinto Group, is expanding its Ranger mine in Northern Territory as it expects rising demand from power utilities. Energy Resources has climbed 40 percent in Sydney in 2009, compared with a gain of 30 percent for the S&P/ASX 200 Index.

“The world is entering a carbon-constrained period,” and Energy Resources expects strong long-term demand for uranium, Paterson said.

The company was trading at A$26.57 in Sydney, up 1.4 percent at 3:03 p.m. The S&P/ASX 200 Index was up 0.9 percent.

Energy Resources had production of 5,339 tons in 2008 and 5,412 tons in 2007, according to its Web site. The company expects 2009 output “in line” with those results, Paterson said.

‘Intermittent Interruptions’

The amount of material mined declined 12 percent in the quarter from the third quarter of 2008. Energy Resources cited “intermittent interruptions to operations to allow increased surveillance” of an area of instability on Ranger’s southern wall. “This is not expected to impact on uranium oxide production in 2009,” it said.

The company approved spending of A$37 million ($34 million) to study the development of its proposed “heap leach” facility, a process expected to continue through next year. Energy Resources said a draft of an environmental impact statement would be submitted by early next year to the Northern Territory government.



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