MELBOURNE (Reuters) - Energy Resources of Australia (AX:ERA), controlled by Rio Tinto (AX:RIO) (L:RIO), said on Wednesday it ended the first half of 2016 with A$453 million (261.86 million pounds) in cash, crucial for the clean-up of its Ranger uranium mine, likely to close by 2021.
ERA is producing uranium only from stockpiled ore at the mine, raising cash to fund its closure as Aboriginal land owners have refused to back a renewal of its mining authority beyond 2021 and Rio Tinto declined to invest in studies to dig an underground mine due to tough conditions in the uranium market.
The stockpile is due to run down in late 2020, and the big issue facing the company beyond then is the long term clean-up of the mine, which is surrounded by Kakadu National Park, a World Heritage listed site.
ERA's revenue in the six months to June fell 11 percent to A$154.4 million from a year earlier, largely due to weaker sales volume and lower prices.
It said it had A$453 million in cash on hand, including A$70 million held by the federal government as part of a Ranger rehabilitation trust fund.
ERA has estimated it will cost A$507 million to clean up the site and has already started rehabilitation work.
Uranium producers have been hit by a slump since the Fukushima disaster in 2011 led Japan to shut its nuclear reactors. Reopening of nuclear plants there has been slower than expected.
Uranium prices (UXXc1) have fallen 25 percent this year to $25.90 a pound, which is around a third the price they were at just before the tsunami disaster in March 2011 which triggerd the meltdown of the Fukushima nuclear plant.
"ERA expects that the uranium market will remain challenging in the near term, however the long term outlook remains encouraging for established producers," the company said.
ERA booked a A$161.4 million impairment on Ranger, due to sliding uranium prices. Its half-year results were delayed by a month while the impairment was assessed.
Rival Paladin Energy , which operates two uranium mines in Africa, (AX:PDN) (TO:PDN) is due to report results on Thursday.