Australian Mining: Rio Tinto called to account for ERA rehab funding at Ranger uranium mine

Publish Date:
7th May 2014

by Ben Hagemann

read on Australian Mining website

Rio Tinto will be called to account for their position on the issue of funding rehabilitation operations at ERA’s Ranger mine in Kakadu, at their Australian AGM in Melbourne tomorrow.

At the Rio Tinto AGM in London on April 16, CEO Sam Walsh attempted to shrug off responsibility for the costs of rehabilitation at the Ranger Uranium Mine, saying that ERA is a public Australian company and “clearly that is an issue for them”.

The issue of rehabilitation of the Ranger mine has been coming to a head as ERA proposes an underground expansion of the mine, called Ranger 3 Deeps, which will increase the life of the mine.

However, the structural failure of a leach tank in December 2013 resulted in the spillage of 1.4 million litres of sulphuric acid and uranium ore, which caused ERA to voluntarily cease operations, bringing attention to the issue of maintenance on site.

This has called into question the issue of regulatory approval for the mine expansion, which ERA has linked to the issue of costs of rehabilitating the existing Ranger site.

“The ultimate cost of rehabilitation is uncertain and whilst ERA has used its best estimate, costs may vary in response to factors such as legal requirements, technological change and market conditions,” the report reads.

“In addition, if the Ranger 3 Deeps mine is not developed, in the absence of any other successful development, ERA may require an additional source of funding to fully fund the rehabilitation of the Ranger Project Area.

“Any inability to obtain additional capital or to monetise assets would have a financial impact on ERA’s business and financial performance.”

Under the Ranger permit, the site must be rehabilitated by 2026, which a rehab strategy review has found will cost $603 million.

According to the Sydney Morning Herald, ERA currently holds $357 million, and maintains a trust with the Australian Government worth $63.9 million as of December 2013.

Some rehabilitation of the site is already underway, including the decommissioning of filtration ponds.

Representatives of the Gundjeihmi Aboriginal Corporation, which represents the traditional owners of the Ranger site, have indicated to Australian Mining  they hope Rio Tinto will reconsider the issue of funding the rehabilitation, and will be present at tomorrow's AGM in Melbourne.

Gundjeihmi Aboriginal Corporation CEO Justin O’Brien indicated his disapointment with the prevailing attitudes within Rio Tinto and ERA.“

"The mining giants have made enormous profits at the expense of Mirarr traditional lands and are now holding the Word Heritage listed area to ransom," O'Brien said.

"We were alarmed by Sam Walsh's comments in London, tomorrow's meeting provides an opportunity for Rio to correct the record on Ranger rehabilitation.

"ERA is a subsidiary of a much larger company, the responsibility for clean up at Ranger ultimately rests with Rio Tinto.

“Rio Tinto is a tenant on Mirarr land. They come and they go. If a tenant told you they weren’t prepared to fix the damage they caused to your house unless you agreed to give them a longer term lease, you’d laugh them out of the building – what does this type of announcement say about these tenants?

"It is inconceivably thoughtless and arrogant of any mining company to manage its corporate social responsibilities in this way."