ERA flags more impairments

Rio Tinto’s uranium-focused subsidiary Energy Resources of Australia expects to report $231 million in impairments for the year to December 2016, in response to further weakness in the depressed market for yellowcake.

ERA, which owns the Ranger uranium mine in the Northern Territory, said it expected to record a $70 million impairment in the second half of 2016, in addition to the $161 million impairment it reported in the first half of the year.

“The impairment is a result of a further decline in the uranium oxide spot price in the second half of 2016 and consequent downgrading of near-term uranium oxide price forecasts,” the company said in a statement.

“As the impairment is a non-cash item, it does not have any impact on cash flow or ERA’s existing operations.”

ERA shares were 0.7 per cent lower to 68 cents each at the close of trade.