Uranium miner Energy Resources of Australia Ltd. on Thursday blamed extraordinarily heavy rain across northern Australia for a 122 million Australian dollar ($131 million) loss in the first half of 2011.
The result for the Rio Tinto Ltd. subsidiary better known as ERA was a major deterioration from the AU$23 million profit posted in the six months through June last year. Its shares slumped more than 5 percent to AU$4.11 immediately after the news.
Heavy rain during the southern hemisphere summer caused record flooding in Australia's north and east and caused the Australian economy to shrink in the first three months of 2011.
Darwin-based ERA said in a statement that the latest result was "significantly impacted" by the suspension of processing operations at its Ranger Mine in the Northern Territory announced on Jan. 28.
With the restart of the processing operations on June 15, ERA expects its 2011 production of uranium oxide to be approximately 2,900 tons (2,600 metric tons).
Additional pond water treatment capacity has been commissioned to help provide earlier and longer access to the bottom of the pit at Ranger.
The company says that, in the short term, the uranium market "appears to be well supplied" due to adequate inventory held by utilities along with increased production, especially from Kazakhstan.
Volatility in the spot price of uranium oxide was likely to continue until the nuclear situation in Japan became clearer and the outcomes of the safety reviews of nuclear power facilities in China were released.
China announced reviews of its atomic energy program after a March 11 earthquake and tsunami crippled a nuclear plant in Japan, resulting in core damage at several reactors, the loss of cooling at spent fuel pools and releases of radiation into the environment. More than 13,700 people were killed by the Japanese disaster.
ERA says long-term demand for uranium is expected to continue to be driven by strong growth in China.
"This is expected to significantly exceed any market contraction as a result of the Japan crisis," ERA said.
"ERA continues to envisage a strong future for uranium including continued price and demand growth with long-term demand exceeding planned supply."
The company plans to conduct an expanded exploration program at the Ranger site between 2012 and 2014 at an estimated cost of AU$40 million.