You’d think that mining and exporting commodities from the dry bits of Australia would be fairly easy, even in the tropics where it does rain from now and then, drought or no drought.
Last year it was cyclones which hurt the Australian economy by cutting iron ore exports for several months from Western Australia, bananas from North Queensland, and delayed some coal exports, also from Queensland.
Now its uranium exports by Energy Resources of Australia (ERA) which have been slashed by heavy rain at its Ranger mine in the Northern Territory.
With spot uranium prices reaching above $US90 a pound in the past couple of weeks, this news will send them bounding higher because ERA’s loss is significant.
ERA says production next year at Ranger is likely to be 25 to 35 per cent lower than that in 2006, when the uranium miner produced 4,748 tonnes of yellowcake.
And there will be an impact on 2007 output, especially in the second half of the year.
ERA says it had to shutdown mining operations and the processing plant in late February following heavy monsoonal rain.
“The shutdown and re-start of the processing plant resulted in the loss of approximately 300 tonnes of uranium oxide production,” ERA said.
“In addition, the elevated water level in the mine resulting from the high rainfall will restrict access to ore in the second half of 2007 and into 2008.”
ERA said stockpiled high-grade ore would be processed throughout the year and production in 2007 is likely to be similar to 2006 but the 2008 output will be the one that takes the hit.
“ERA has identified a number of potential opportunities to reduce the impact of the weather event, including accelerating the treatment and disposal of water,” ERA said.
“These options are currently being evaluated and in most cases regulatory approvals will be required.”
ERA says it was forced to declare force majeure on its sales contracts on March 7 as a result of the heavy rainfall.
It’s not the first time Ranger has been hit: the mine was hit last year by cyclone Monica which caused a delayed acid plant shutdown last year, reducing production.
ERA is 68.4 per cent owned by major mining house Rio Tinto. ERA shares fell $1.54 to $26.26 and Rio shares fell $1.61 to $77.20.
