Rio Tinto to manage Ranger rehabilitation

03 April 2024

Energy Resources of Australia (ERA) has appointed majority owner Rio Tinto to manage the rehabilitation of the former Ranger uranium mine in Australia's Northern Territory. Mining and processing operations at Ranger ceased in January 2021.

The Ranger mine and processing plant, pictured here in its operating phase, is now being rehabilitated (Image: ERA)

Rio Tinto, which owns just over 86% of ERA's shares, will manage the Ranger Rehabilitation Project under a new Management Services Agreement.

The agreement follows discussions and negotiations between Rio Tinto and ERA's Independent Board Committee in relation to a proposal to provide services and advice on the execution of the project. The committee sought and received a proposal from Rio Tinto, and carefully considered the potential Management Services Agreement and whether it was in the best interests of ERA's shareholders. The committee concluded that there was significant value for ERA, and potential cost savings, in directly leveraging Rio Tinto's mine rehabilitation, project management experience and capability to support the safe and efficient delivery of the Ranger Rehabilitation Project.

Under the Management Services Agreement, Rio Tinto and ERA aim to complete the rehabilitation of Ranger - located eight kilometres east of Jabiru and 260 kilometres east of Darwin - in the safest and most efficient way, and to a standard that will establish an environment similar to the adjacent Kakadu National Park and that is consistent with the wishes of the Traditional Owners of the land, the Mirarr people. The agreement requires Rio Tinto and ERA to seek to mitigate risks and minimise costs in alignment with ERA's obligations.

The MSA is expected to be implemented in the second quarter of 2024, with the transition period expected to take 2-3 months.

ERA will continue to directly manage its commitments in Jabiru, corporate and financial affairs, assets and governance, including the lease renewal for the adjacent Jabiluka site.

An updated rehabilitation timeline for the Ranger project will be disclosed when finalised in due course, ERA said.

"We are pleased to have appointed Rio Tinto to manage the Ranger Rehabilitation Project," Independent Board Committee (IBC) Chairman Rick Dennis said. "The Ranger Rehabilitation Project is a complex and globally significant rehabilitation and after extensive consideration the IBC has concluded that there would be significant value for ERA in directly leveraging Rio Tinto's mine rehabilitation, project management experience and capabilities."

ERA CEO Brad Welsh added: "The ERA team has worked incredibly hard and made good progress rehabilitating Ranger. However, as the project moves into a new phase it will benefit from Rio Tinto's global expertise in mine closure. We look forward to working with and supporting Rio Tinto on the safe and efficient delivery of this important project."

"So far, ERA has made progress in key areas, including water, tailings treatment and management and pit rehabilitation," said Rio Tinto Chief Executive, Australia, Kellie Parker. "We are aligned with ERA in wanting to build on this work using Rio Tinto's expertise in closure projects and our commitment to strong stakeholder relationships. We look forward to working in partnership with the Mirarr Traditional Owners and other stakeholders to complete the project."

ERA was required to complete final rehabilitation of the project area and return the land to an environment similar to the adjacent areas the Kakadu National Park by January 2026, but forecast costs and timescales have continued to increase. Preliminary reforecasting in 2022 suggested the total cost of the rehabilitation would be AUD1.6-2.2 billion - up from AUD973 million from a 2019 feasibility study - with rehabilitation not completed until between the fourth quarter of 2027 and the fourth quarter of 2028.

In February, ERA said it spent AUD211 million on rehabilitation work at Ranger in 2023, and expects to spend about AUD1.2 billion on rehabilitation activities up until the end of 2027. The company said it expects it will require further funding in the second half of 2024 for the first tranche of estimated rehabilitation expenditure. Post-2027 activities and estimates of their costs remain highly uncertain, the company added.

"Mirarr are pleased that the ERA independent board committee has finally admitted that ERA has lost control of the Ranger Rehabilitation Project and will hand over management of it to the major shareholder Rio Tinto," said Thalia van den Boogaard, CEO of Gundjeihmi Aboriginal Corporation, representing the Mirarr Traditional Owners.

Researched and written by World Nuclear News