July 26, 2012
Troubled miner Energy Resources of Australia (ERA) says the uranium market remains challenging after it recorded a net first-half loss of $59.86 million.
But the company says the longer-term outlook remains encouraging for established producers as demand continues to grow in China with the construction of 26 nuclear reactors.
ERA’s net losses shrank by more than 50 per cent in the first half, while its revenues fell 37 per cent to $147.999 million.
‘‘Despite some slower growth in the medium term as China transitions to an increased reliance on improved nuclear power generation technology, ERA expects that the country will be one of the largest uranium consumers within the decade,’’ the company said.
ERA flagged its 2012 production of uranium oxide would be between 3,200 and 3,700 tonnes, in line with its previous announcement.
The company’s first half net loss compared to $121.75 million net loss in June 2011, while revenues came in at $235.6 million.
Revenue from ordinary activities fell 33 per cent to $163.16 million, down from $244.89 million.
Cash costs were marginally higher than the corresponding period in 2011.
ERA said the spot market remained stable in the low $US50s ($A48.64) per pound of uranium oxide.
The average realised sales price of uranium oxide for the half-year was $US57.57 ($A56.00) per pound, below the $US60.82 ($A59.16) per pound in the previous corresponding period.
‘‘In the short term, the uranium market remains challenging with utilities well supplied and post Fukushima uncertainty remaining in the Japanese market,’’ ERA said.
‘‘Sales of uranium oxide in 2012 are expected to be broadly in line with production,’’ ERA said.
To date, two reactors have been restarted in Japan with the possibility of several others restarting later in the year.
ERA said it was well positioned for a stronger market in the mid term if the Ranger 3 Deeps mine is developed.
It also expects to complete mining in Pit 3 by the end of 2012.
Subject to first quarter, 2013 sales commitments, ERA expects to fully repay all uranium oxide loans contracted over the past two years by the end of 2012.