RIO Tinto's uranium subsidiary, Energy Resources of Australia, says production this year could be at the lowest in nine years.
Problems have arisen because of high rainfall and a pit wall slip, forcing the miner to buy some ore to fulfill contracts.
ERA said yesterday full-year production was expected to be between 4300 and 4700 tonnes of uranium, which was up to 18 per cent lower than previous guidance of about 5240 tonnes. It attributed the change to being unable to access higher-grade ore after a slip late last year at its Ranger mine, which is in Kakadu National Park.
If output is at the low end of the range, it would be the lowest since 2001, when the miner produced 4203 tonnes. If production is 4700 tonnes, it would be the lowest since 2002.
But ERA said it would still meet sales contracts. "Sales are expected to be somewhat in excess of 5000 tonnes, with commitments met by way of inventory management, flexibility of shipments to customers and a small volume of secondary purchases," the company said.
Shares in ERA, which is 68.4 per cent-owned by Rio, fell 68c, or 4.6 per cent, to $14.05 yesterday.
ERA's second-quarter production was 1828 tonnes of uranium, down 44 per cent from the previous quarter and 7 per cent from a year earlier.
Credit Suisse analyst Matthew Hope said while the lower production had been well flagged, he was lowering his first-half net profit forecast for ERA by $8 million to $40m.
"However, we expect a strong recovery to $126m in the December half, giving $166m for the year," Mr Hope said.
ERA said it expected to make a final decision this quarter on developing an exploration decline at its Ranger 3 Deeps project, where it has a resource of 10 million tonnes of ore with an average grade of 0.34 per cent uranium dioxide.
No comments:
Post a Comment