Rio Tinto is set to provide funding for the closure of Energy Resources of Australia’s (ERA’s) Ranger uranium mine in the Northern Territory.
ERA, a subsidiary of Rio Tinto, completed a feasibility study for the rehabilitation of Ranger in February, reporting an increase to the closure costs by around a third.
Under ERA’s mine closure plan, the company is required to rehabilitate the entire Ranger project area (of around 950 hectares) to “establish an environment similar to the adjacent areas of Kakadu National Park,” such that it will blend with the surrounding landscape.
Rio Tinto and ERA set a $100 million credit facility agreement in place for the closure in 2016, but funds are now insufficient to meet a shortfall for the rehabilitation.
ERA has spent $511 million on rehabilitation and water management activities at Ranger since 2012, with some parts of the disturbed mine footprint well advanced. Pit 3 has also transitioned from an open cut mine to a tailings repository.
The mine closure plan has been developed in accordance to Rio Tinto’s internal requirements for a closure plan, ERA’s vision for closure and the Western Australian mine closure plan guidelines, due to the absence of the equivalent Northern Territory guidelines.
Rio Tinto will provide additional financial support to ERA via a renounceable entitlement offer, in which the parent company will subscribe for ERA’s 68.4 per cent entitlement of new shares – the same amount of Rio Tinto’s shareholding in the subsidiary.
The major miner has also offered to underwrite the balance of a renounceable entitlement offer if an alternative underwriting solution is not available to ERA.
Under the current mine lease, production operations at Ranger must cease by January 2021 and the site must be rehabilitated by 2026.
Ranger has produced 128,000 tonnes of uranium oxide in the three decades of its operation.