ERA reforecasts Ranger rehabilitation costs and schedule

02 February 2022

The total cost to rehabilitate the Ranger project area is likely to be between AUD1.6 billion and AUD2.2 billion (USD1.1 billion-1.6 billion), according to preliminary findings from a reforecasting exercise by Energy Resources of Australia (ERA). The work is now expected to be completed between late 2027 and late 2028.

The Ranger mine and processing plant, pictured during operations (Image: ERA)

More than 35 years of uranium mining and processing operations at Ranger, in Australia's Northern Territory, came to an end in January 2021 on the expiry of the Ranger Authority, with ERA required to complete final rehabilitation of the project area - and return the land to an environment similar to the adjacent areas of the world heritage listed Kakadu National Park - by January 2026.

The company last year announced the reforecasting exercise after it became apparent that the rehabilitation of the area, 8 km east of Jabiru and 260 km east of Darwin, would be subject to both cost and scheduling overruns. Bechtel was engaged to carry out an independent review and gap analysis of ERA's forecast cost and schedule data.

The preliminary findings from the reforecast indicate a revised total cost of completing the rehabilitation, including incurred spend from 1 January 2019 of "approximately between AUD1.6 billion and AUD2.2 billion", ERA said. The previously announced closure estimate, which was based on a 2019 feasibility study, was AUD973 million. The revised date for completing the rehabilitation is now forecast to be between the fourth quarter of 2027 and the fourth quarter of 2028.

These figures are based on the rehabilitation project being completed in accordance with the methodology set out in the current mine closure plan, ERA noted. It listed several key factors contributing to the forecast cost and schedule overruns, including additional cost and schedule impacts incurred in tailings transfer and the conversion of the tailings storage facility into a water storage facility; emergent technical risks, additional cost and schedule impacts associated with capping works at Pit 3; emergent scope items and unbudgeted costs; supplementary project management and owners team support roles required to deliver the project; additional water treatment costs; and costs associated with schedule delays.

The requirement under the Atomic Energy Act 1953 that rehabilitation is completed by January 2026 is a "key constraint" for ERA, the company said. It is engaging with government and key stakeholders to amend the act and extend the expiry date of its tenure on the Ranger project area.

ERA's board has also that further options for the completion of the project, including a proposed revision to the methodology for capping Pit 3 to more traditional methods that the company said could be subject to lower execution risk than the current approved mine closure plan.

"Any change to the execution methodology for the rehabilitation project is likely to necessitate further revision to the forecast cost and schedule for completing the project. Nevertheless, the projected cost overruns are expected to fall within the reforecast range," it added.

ERA's majority owner, Rio Tinto, said it was reviewing the preliminary findings of this reforecast and has advised ERA that it is committed to working with the company to ensure the rehabilitation of the Ranger Project Area is successfully achieved.

As at 31 December 2021, ERA had AUD699 million of cash funding held by the Australian government as part of the Ranger Rehabilitation Trust Fund. The government is also holding AUD125 million in bank guarantees.

ERA's operations are located on Aboriginal land and surrounded by, but separate from, the Kakadu National Park. The Mirrar are the traditional custodians of the land on which the Ranger mine is situated.

Researched and written by World Nuclear News