The Australian Financial Review 25 Nov 2010 Taking Stock
Energy Resources of Australia (ERA)
Angela Macdonald-Smith
Energy Resources of Australia has shared little of the pick-up seen lately by others in the uranium sector from the rise in spot prices for yellowcake towards $US60 per pound from close to $US40 earlier in the year. Australia's largest producer of uranium oxide has seen its share price drop by more than half over the past 12 months, towards levels not seen since October 2008 after lower ore grades cut production and boosted costs, and on concerns about the impact of the upcoming wet season on its Ranger mine in the Northern Territory. A delay in seeking environmental approval for ERA's heap leach facility, required to prevent a dip in output once the Ranger pit is exhausted in 2012, is also weighing on the stock. While the price softness has sparked speculation that 68 per cent-owner Rio Tinto could look at lifting its stake, the mining giant is understood to be more interested in potential opportunities around its Rossing mine in Namibia.
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