Rössing Uranium earned US$27 million last year, US$25 million more than that of 2005 and benefited from buoyant market conditions and improved pricing, said Rio Tinto, its mother company in its 2006 Annual Report released last week.

The US$82 million Life of Mine Extension project approved in December 2005 is proceeding on schedule, Rio Tinto said. This project will extend the life of Rössing to 2016.

Rio Tinto said low uranium global stockpile levels and strong demand pushed spot prices above $70 per pound during 2006. Mined supply has been unable to respond quickly to growing demand from new reactors, notably in China, and higher utilisation rates in the nuclear industry. In addition, sources of secondary supply continue to be run down. These factors have contributed to tighter markets and an improvement in the longer term outlook for uranium demand, Rio Tinto said.

Rio Tinto’s chairman Paul Skinner said, “Another year of strong global economic growth in

2006 resulted in continued strong demand for most commodities. Combined with supply side constraints, this led to tight markets and strong prices for most Rio Tinto products.

“These conditions, along with a sound operational performance in a challenging environment, combined to deliver record underlying earnings of US$7.3 billion and cash flows of US$11.2 billion, including dividends from equity accounted units.

“Looking to 2007, there are a number of uncertainties in the global economy, not least the direction of inflation and interest rates in major economies. We expect some moderation of global economic growth, although confidence in Japan and Europe is increasing. Growth in China, which is critical to the demand outlook for many of our products, remains strong and well balanced.

“We continue to view the overall outlook for commodities as positive, with prices remaining well above their long run averages in 2007.”