Antinuclear

That is the strategy Rio has employed with its major shame in this country – Energy Resources of Australia, the Ranger uranium miner, of which Rio owns 68 per cent. ERA has been producing uranium at Ranger for 30 years come this August. It is only the second mine in the world to have produced more than 100,000 tonnes of uranium.

But as the collapse in the group’s share price from a 52-week high of $15 to yesterday’s closing price of $4.68 suggests, there is something very wrong with ERA.

In the post-Fukushima world, some of ERA’s $2 billion value loss can be attributed to the general selloff in uranium stocks in the expectation that demand for the radioactive material is not going to be as robust.

But the reality is that Ranger is an operational mess, so much so that processing has been suspended until at least July because of water-handling issues.

On top of that is the sad situation that ERA is stuck with Ranger and it has nowhere else to go, thanks to 30 years of inaction, failing to secure new business by leveraging off its uranium mining and marketing expertise……..

If Ranger were a goldmine in outback Western Australia, the occasional flooding and possible breaching of its tailings retention system would not be a big deal.

But Ranger is a uranium mine, inside a national park and smack bang in the middle of the Alligator River system. There should be no chance of it being caught out. But as Rio’s briefing notes to analysts last week showed, seriously heavy wet seasons have been a regular occurrence in the region since 2000-01.

Had Ranger been configured for exceptional rain, ERA would not be suffering its current horrors.

There would also not be the question marks hanging over its planned projects to extend operations at Ranger – and royalties to the traditional owners – beyond 2021.

Most analysts now believe the development of a heap leach operation at Ranger will not proceed……. http://www.theage.com.au/business/ranger-a-ride-of-shame-for-era-and-rio-tinto-20110607-1fqzx.html#ixzz1OpyFstZ0