PERTH (miningweekly.com) – Uranium miner Energy Resources of Australia (ERA) on Friday announced that it had abandoned its planned Ranger 3 Deeps underground project, in the Northern Territory, citing economic challenges and uncertain market conditions.

The board was of the view that the uranium market had not improved as much as previously expected and that uncertainty remained regarding the market’s direction in the immediate future. The board also raised questions over the economics of the project, as the prefeasibility study (PFS) revealed the project would require operations beyond the current Ranger Authority, which expired in 2021.

The Ranger 3 Deeps project considered the development of an underground mine to recover uranium from the Ranger 3 Deeps mineral resource, with most of the mining occurring between 200 m and 500 m below the ground.

It was estimated that the mine would run for a period of five years, and first production had initially been targeted for late 2015, pending board and regulatory approval.

The ERA board was handed the A$57-million Ranger 3 Deeps PFS at the end of last year, and conducted a review of the study during the first quarter of 2015.

ERA told its shareholders that despite abandoning plans for the Ranger 3 Deeps mine, the company would continue to process its stockpiles and to meet obligations to customers.

The uranium miner has also engaged with its majority shareholder Rio Tinto regarding funding support for rehabilitation of the mine, should additional funding be required.

Rio said in a statement on Friday that the company agreed with the decision not to progress feasibility studies at the Ranger 3 Deeps mine, saying the project had “economic challenges”.

The mining major warned that it was assessing a potential noncash impairment charge of some $300-million in relation to its shareholding in ERA.

Meanwhile, ERA noted that the company had started discussions with representatives of the Traditional Owners and the commonwealth government regarding a possible extension to the Ranger Authority.

In the meantime, the company would continue to conserve cash, which ERA said would allow the company to revisit the project’s economics over time.