Reuters reported that major uranium miner Energy Resources of Australia unveiled USD 500 million rights issue to help solve a waste water problem that had forced it to sharply cut production at its only mine and shelve an expansion project.

ERA has struggled since heavy rains swamped north Australia early this year, flooding the pits at its Ranger mine, raising fears of a spill of contaminated water into the World Heritage-listed tropical wetlands that surround it.

ERA, owned 68% by Rio Tinto but separately listed, said that it would issue 12 new shares for every seven held at AUD 1.53 each less than half their last traded price of AUD 3.29 and fully underwritten. Rio Tinto would take up its full entitlement and also stand as a sub underwriter.

About USD 270 million of the money would be used to fund an expansion of waste water treatment at mine including a brine concentrator which evaporates water that is then condensed and discharged as distilled water.

The rest of the money would also be used to fund exploration around the mine, which sits within the World Heritage listed Kakadu National Park. Started in 1981, Ranger typically supplies about 10% of the world's uranium and has been dogged for years by controversies over leaks and spills.

Mr Rob Atkinson CEO of ERA said that "ERA takes water management very seriously. This capital allows ERA to progress the implementation of our water management strategy which includes the construction of a brine concentrator and other initiatives in as timely a manner as possible."

ERA this year took AUD 99.4 million writedown after shelving a project to process stockpiles of uranium ore through acid leaching and due to a drop in uranium grades of other stockpiles that ERA had planned to process.

(Sourced from Reuters)