The Rio Tinto Limited (ASX: RIO) share price is on watch today after an update from its majority-owned entity, Energy Resources of Australia Ltd (ASX: ERA).
Energy Resources provided a quarterly update on production and rehabilitation efforts at its Ranger Mine in the Northern Territory. Rio Tinto owns an 86.3% stake in the ASX-listed Energy Resources.
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Why is the Rio Tinto share price in focus?
Investors will be watching shares in both Rio Tinto and Energy Resources, Australia's longest continually operating uranium oxide producer.
Energy Resources produced 34 tonnes of uranium oxide in the March 2021 quarter, down 96% from the 390 tonnes recorded in the December 2020 quarter. The mining group halted production on 8 January 2021 in line with the Ranger Authority.
The Energy Resources share price fell 21.9% lower in the space of a week between January 7 and January 14. The Aussie miner needed to cease mining and processing activities in the Ranger Project Area by January 2021. January 2026 is the deadline for final rehabilitation efforts under the Ranger Authority.
The Rio Tinto share price has edged lower in 2021 but the world's second-largest metals and mining group still has a $167.2 billion market capitalisation.
The January shutdown now concludes 40 years of operation at the Ranger Mine, having produced over 132,000 tonnes of drummed uranium. Ranger rehabilitation efforts are continuing at the site, according to today's release.
Energy Resources didn't spend on evaluation or exploration during the quarter. Energy Resources expects to complete sales into its existing sales contracts through 2021. The average realised selling price is expected to be US$50 to US$55 per pound.
The Rio Tinto share price will be one to watch following the quarterly update from Energy Resources. Yesterday's quarterly release also provided an update on its Ranger 3 Deeps resource discovered in 2009.
Energy Resources said, "Given the current uranium market environment, the Ranger 3 Deeps project faces material barriers to development". Ranger 3 Deeps decline and decommissioning will continue with plant decommissioning due to be completed in Q3 2021.
Foolish takeaway
The Rio Tinto share price will be one to watch following a quarterly report from its majority-owned Energy Resources. Shares in the iron ore giant have climbed 27.1% in the last 12 months to $113.44 at yesterday's close.
