ENERGY Resources of Australia Negotiating A New Uranium Mining Deal

Published on Thursday January 05 2012 (AEST)

ENERGY Resources of Australia is negotiating a new uranium mining deal with traditional owners in Kakadu National Park, and has $80 million worth of tenders up for grabs for work at the Ranger site.

ERA chief executive Rob Atkinson said the new uranium discovery at Ranger 3 Deeps, next to the existing Ranger pit, was one of the biggest recent finds in the world.

"A lot of deposits were found in the last 30 years but this was only discovered in 2008," he said.

There is an estimated 34,000 tonnes of uranium in the resource with an expected purity level of 0.34 per cent.

That makes it twice as big as the estimated billion-dollar, 14,000 tonne Angela and Pamela deposit, 25km south of Alice Springs, which has less than half the ore purity at 0.13 per cent.

ERA has all permissions and approvals in place to build a $120 million exploratory tunnel and drill tests to accurately measure the size of the find.

Work will start on the exploration incline in May, and the company has $80 million worth of tenders out for the work, particularly for underground mining contractors experienced in building tunnels.

"It's open to NT contractors but we are also considering interstate tenders," Mr Atkinson said.

He warned it would be tough to win, because ERA rejects contractors that other mines hire if they don't have enough experience.

"We want highly skilled, experienced operators," he said.

Workers will need to dig a 2000m tunnel about 450m beneath the surface, next to or within the existing Ranger Pit 3.

Mr Atkinson said the project would create about 100 jobs and would take about two and a half years to build. Without the new project, Ranger will run out of uranium to mine later this year.

But Mr Atkinson said the resource would not be mined unless traditional owners supported the project.

"We are in negotiations for a new mining agreement with the Mirarr," he said. While talks have been on for years, Mr Atkinson said they had picked up speed. "We're hopeful for it to be concluded in the next few months," he said.

"It's in both our interests to conclude as soon as possible so any improvements in the agreement can flow on to Aboriginal people. "I want the agreement done and dusted - it's important in any relationship to know where you stand."

Analyst firm UBS recently put a "sell" rating on the uranium miner on fears that higher-than-average rain could delay the Ranger 3 Deeps project.

UBS has valued ERA at $2.87 per share if Ranger 3 Deeps goes ahead but only 67c per share if it doesn't.

The miner was trading around the $1.22 mark last week, having risen on optimism after it escaped any flooding caused by Cyclone Grant.

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