By Simon Johanson
The last chapter in one of Australia’s big environmental battles is set to play out after mining giant Rio Tinto moved to take full control of the controversial Ranger uranium mine near the World Heritage-listed Kakadu National Park.
Rio, the world’s second-biggest miner by market value, told the ASX on Wednesday it will compulsorily acquire the remaining shares it does not own in its subsidiary Energy Resources of Australia (ERA), taking control of the contentious Ranger uranium mine and neighbouring Jabiluka deposit, one of the world’s richest known sources of untapped uranium.
Rehabilitating the Ranger uranium mine is a big and costly clean-up job.
ERA wound up its uranium oxide operation at Ranger in 2021, but the cost of rehabilitating the mine is on track to exceed $2.2 billion and concerns have lingered among traditional owners, the Mirarr people, about ERA’s intentions, particularly after it applied for a 10-year mining lease extension over Jabiluka in March this year.
Rio, which owned a large stake in ERA, began working with ERA on rehabilitating the mine in 2021. ERA was legally required to rehabilitate the operation by 2026 estimating it would cost $500 million, but budget blowouts and differences between ERA’s board and Rio led to a fractious relationship with its majority shareholder before Rio reached an agreement with ERA to take over management of the mine’s rehabilitation in April this year.
The push to mine Jabiluka at one stage sparked fierce opposition among traditional owners and environmental campaigners in 1998. Thousands of protesters took part in a human blockade at the site and hundreds were arrested in the ensuing clampdown.
The lease area covers a sacred site with hundreds of ancient rock art galleries. In the end, Jabiluka was never mined, and ERA pledged it would not develop the area as long as the Mirarr remain opposed to it.
Jabiluka was developed and prepared for mining before work was stopped, following huge backlash, including this rally in Melbourne in 1999.Credit: The Age
Rio’s Australia chief executive Kellie Parker reaffirmed the dual London-Australia listed miner had “no intention to invest in mining or development of the Jabiluka deposit”.
“Proceeding with compulsory acquisition, after participating for our full entitlement in the ERA capital raising, underlines our commitment to Ranger’s rehabilitation,” Parker said.
Australian Conservation Foundation campaigner Dave Sweeney said Rio’s takeover of Ranger brings certainty to the delivery of rehabilitation works.
“There is a massive shortfall in funding for the Ranger clean-up and Rio has deeper pockets, more talent and greater reputational exposure than ERA,” Sweeney said.
ERA launched a capital raising in October that resulted in $766.5 million to fund rehabilitation of the Ranger mine. Rio bought its maximum entitlement in the raising, which pushed its shareholding up from 86 per cent to 98 per cent.
It immediately said it would move to mop up the remaining shares held by minority investors in ERA under the compulsory acquisition rules of the Corporations Act for the same price, $0.002 per ERA share, as the entitlement offer.
“We remain committed to the successful rehabilitation of the Ranger Project Area to a standard that will establish an environment similar to the adjacent Kakadu National Park, a World Heritage site,” Parker said.
ERA’s board said it would keep shareholders informed of any subsequent developments and steps taken by Rio Tinto.
The global miner’s purchase of new shares under the capital raising will boost its voting power in ERA to 98.43 per cent, overwhelming a vocal minority of shareholders who were seeking to block Rio boosting its stake and who have been pushing for the Jabiluka deposit to be developed.
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