Energy Resources of Australia say a new uranium mine in the Northern Territory will play an important role in future energy needs.
ERA chief executive Rob Atkinson said approval to build an underground uranium mine would re-establish the company as a top uranium producer and extend the life of its declining open-cut Ranger mine.
"Gaining approval for a viable Ranger 3 Deeps underground mine will re-establish ERA as one of the premier producers of uranium at a time that we expect uranium markets to start tightening and prices improving," he told the company's annual general meeting in Darwin, SMH reported.
Chairman Peter McMahon said the Ranger 3 Deeps deposit would allow the company to provide global energy solutions as the demand for uranium was expected to increase.
"While the short-term outlook for the uranium market is challenging, the longer term picture for uranium prices is brighter," he said.
In its annual report ERA said the spot price for uranium plunged last year, reaching $US43.38 a pound after the 2007 peak of $US135 a pound.
Despite poor conditions the company said it was confident the market would improve in the long term as power generation turned away from fossil fuels.
“Nuclear power is the only low carbon emitting generation technology that delivers large volumes of base load power,” it said.
ERA said while Japan had turned off most of its nuclear reactors it was expected to slowly return to nuclear power.
“The general consensus is that while public support for nuclear power in Japan has waned in the wake of Fukushima, ultimately the country has little choice but to rely on nuclear for a significant portion of its energy needs,” it said.
Looking to the future ERA said China would continue to drive demand, and new uranium deposits were mostly located in high cost regions, which could boost prices further.
“The longer term picture for uranium prices is much brighter,” it said.
ERA formally begun its statutory approvals process for the proposed Ranger 3 Deeps underground uranium mine in January.
ERA is investing around $120 million to construct an exploration decline to define its existing resource.
Construction of the decline began in May last year, with closed space drilling scheduled to commence in quarter three of this year.
The miner has also allocated an additional $57 million for a prefeasibility study into the development of the underground mine.
ERA mines uranium from the Ranger mine in the Northern Territory and is 68.4 per cent owned by Rio Tinto.