Uranium miner Energy Resources of Australia Ltd. (ERA.AU), a unit of Rio Tinto Plc (RTP), said Tuesday weak uranium prices as well as the weak U.S. dollar would render new mining projects uneconomic in the longer-term.

This would leave the market heavily dependent on expansions in Kazakstan, in an industry where the global financial crisis was likely to slow new reactor build in Western countries "but probably not in China," ERA said in a statement.

In the short-term, spot uranium prices are set to stay volatile in an uncertain market, where supply disruptions are adding to jittery prices, ERA said.

The current spot price, which has fallen to around US$50 a pound from over US$60/lb before the onset of the financial crisis, did not reflect current long-term fundamentals, ERA said.

Longer-term prices have trended sideways to lower but have held above US$60/lb.

ERA is the world's fourth largest uranium producer, and operates two mines in Australia's Northern Territory.

-By Elisabeth Behrmann, Dow Jones Newswires;

61-2-8272-4689 elisabeth.behrmann@dowjones.com
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