Owing to a shut down of the uranium processing plant at its Ranger mine the Energy Resources Australia shares dropped and global prices for the mineral jumped up.
The flooding in the tailings storage was higher than what had been predicted and safety concerns have been high. The spot price for uranium went up by 3 dollars to end at $72 (lb). The last time uranium prices went over $70 was in 2008.
In an ironic way the company shares may have dropped but its cash reserves are improving thanks to the higher price of uranium in the markets. The company will also be able to claim higher uranium prices on new contracts. Rio Tinto has a 67% ownership stake in Energy Resources Australia.
However the downside is that ERA needs to make up on the shortfall of existing obligations before it can get the new contracts. The management has said that the currently held inventory will be able to take care of the shortfall created by drop in production at the Ranger mine.
In other news related to uranium following the theft of 170 kg of U-308 from Rossing Uranium in September 2009 investigations are on in full swing. The Rossing Uranium Mine and Corporate Offices in Swakopmund, Namibia have been visited by a combined National Nuclear Security Administration (NNSA) and State Department team.
While the missing uranium is yet to be traced there has been tightening of access controls across the site and a number of safety measures have been installed. These include CCTV, tamper proof seals on finished drums, increased security training and new methods of waste product removal.