PERTH (miningweekly.com) - Uranium miner Energy Resources of Australia (ERA) has reported a 30% drop in uranium oxide production for the full year ended December, tipping the company into the red.

Uranium oxide production during the full year ended December reduced to 2 641 t, compared with the 3 793 t produced in the full year 2010, as mining activities were severely impacted by extreme weather conditions in the Northern Territory.

The Ranger mine suspended processing operations in January of last year, with ERA taking proactive action in response to the significantly higher than average level of rainfall encountered at the mine.

While the suspension was initially expected to last for a period of 12 weeks, the continuation of the La Nina weather pattern and the high rainfall resulted in ERA extending the suspension on April 12.

Dry season conditions permitted the restart of processing operations in June, however, the significant volume of pond water at the Ranger mine affected the operations for the remainder of the year.

ERA on Wednesday reported a net loss after tax of A$145-million, down from a profit of A$47-million in 2010.

The suspension of processing operations and the corresponding lower production resulted in ERA needing to purchase some 2 126 t of uranium oxide in 2011. Out of this amount, 1 636 t was used to fulfill sales commitments, with the remainder used to repay loans and build inventory at the end of the year.

Despite the affected mining conditions, uranium oxide sales were up compared with the previous full year, to 5 167 t. Revenue from the uranium oxide sale reached A$649-million, a A$77-million increase when compared with 2010.

The increase in the sales revenue was attributed to a higher average realised sales price, which was partially offset by the stronger Australian dollar during 2011, ERA said.

The uranium miner said on Wednesday that in the short term, the uranium market appeared to be adequately supplied with utilities holding sufficient inventories.

Long-term demand for uranium oxide was expected to be driven by the strong growth in the Chinese market, and over the next decade, ERA expected this demand to significantly exceed any loss in demand from utilities in Japan or Germany, following the Fukushima incident.

ERA on Wednesday predicted that uranium production for 2012 would reach between 3 000 t and 3 700 t, dependent on the level of actual rainfall encountered for the remainder of the 2011/12 wet season.

The miner said that production in 2012 would be weighted towards the second half of the year with mining operations limited owing to the wet season.

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