Rio and ERA to work together on uranium sales
ENERGY Resources of Australia has sealed a sales and marketing deal that will see Rio Tinto Uranium cover any shortfall in production from the Ranger mine in the Northern Territory.
Under the deal uranium oxide produced by ERA will be sold to Rio's uranium division and pooled with product from the Rossing mine in Namibia.
The combined pool will be marketed and sold by Rio to its global customers.
ERA said the agreement would give its customers the benefit of multi-sourced supply and would also provide working capital and logistics benefits.
The logistics benefits come through ERA and Rossing delivering to customers that are geographically closer to their operations.
The price received by ERA for sales into the combined pool will reflect the price received from Rio's customers minus a marketing fee.
It is proposed all of ERA's sales will be made through the new arrangement from the start of July and the company said it had the right to audit the performance of the agreement.
The deal follows warnings from ERA that it might not be able to meet its supply contracts for the second half of the year due to a halt in operations at Ranger.
Processing at the mine has been suspended since the failure of one of the leach tanks on .
Earlier this month the company reported a quarter without production and said it was working with regulatory authorities to obtain approvals for a restart.
Rio is the majority shareholder in ERA and owns 68% of the company.
ERA shares were last trading 0.6% lower at $A1.34.
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