By Angela Macdonald-Smith
Jan. 14 (Bloomberg) -- Energy Resources of Australia Ltd., producer of more than a 10th of the world’s mined uranium, said fourth-quarter output rose 5 percent from a year earlier on the processing of higher-grade ore.
Production of uranium oxide was 1,634 metric tons in the three months ended Dec. 31, taking full-year production to 5,339 tons, Darwin-based Energy Resources, controlled by Rio Tinto Group, said today in a statement to the Australian stock exchange. Full-year sales slid 1 percent to 5,272 tons.
Uranium spot prices fell 40 percent last year, the biggest annual drop since at least 1996, according to prices compiled by Metal Bulletin. Energy Resources, which in November said drilling at its Ranger site near Darwin found between 15 million and 20 million tons of resources that may underpin an expansion, said today it halted work on studies on the extension of the open pit at the mine.
“It is likely that the high-grade mineralization targeted in the open pit extension study may be recovered through underground mining,” the company said in the statement.
Energy Resources, or ERA, rose as much as 20 cents, or 1.1 percent, to A$18.12 in Sydney trading and was at A$18.06 at 10:0 a.m. local time. The gain outpaced an advance of as much as 0.5 percent in the exchange’s benchmark index.
Energy Resources’ average sales price for uranium rose to $32.53 a pound last year, from $25.06 in 2007. The spot price fell to $52.50 at the end of December, down from $89.50 a year earlier.
“ERA’s average contractual sales price is only partially influenced by the spot market due to the portfolio of contracts containing a range of pricing mechanisms,” the company said in the statement.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
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