Energy Resources of Australia Ltd (ERA)
Energy Resources of Australia Ltd (ERA)
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The rift between Energy Resources Australia and its 86% shareholder Rio Tinto has escalated into the announcement of the planned resignations of the uranium miner's chairman and two independent directors.
Chairman Peter Mansell and non-executive directors Paul Dowd and Shane Charles announced they could not continue to work with Rio.
Their departure leaves the company in the hands of Rio appointed directors Justin Carey, Jacques van Tonder and Rosemary Fagen.
The split between Rio Tinto and its 86%-owned subsidiary Energy Resources of Australia over the costs and progress of their rehabilitation of the Ranger uranium project in the NT has widened, with a call on ERA chairman Peter Mansell to resign.
Rio says a board renewal, starting with Mansell's departure, is needed to bring new perspectives to the giant task of restoring the environmentally sensitive site from the impacts of nearly 40 years of mining.
Australian uranium company ERA has confirmed it is talking with substantial shareholders on a potential interim entitlement offer to meet its urgent need for funding the increasing costs of rehabilitating Ranger project area in the NT.
Responding to media reports, the Rio Tinto subsidiary says it expects to be in a position to announce the size, price and structure of the entitlement offer within weeks.
Uranium miner Energy Resources of Australia aims to sell the 136,000lb remaining inventory at its Ranger mine over the coming three months while reviewing funding options for rehabilitating the environmentally sensitive NT site.
The Rio Tinto subsidiary reports sales of 400,000lb uranium oxide into the spot market during the March qtr (Q1FY2022).
Uranium producer ERA has begun a new search for cost savings on the massive task of rehabilitating the site in the heart of a World Heritage-listed area where it has been mining for over 40 years.
ERA posted attributable net loss of $A650.2M for the year to Dec 2021, a blowout from its $11.5M profit in FY2020 caused by a $668M increase in its rehabilitation costs provision.
Its FY2021 revenue of $190.3M (FY2020: $242.2M) came from sales of 1,302t (1,702t) of uranium inventories after it ceased production mining in Dec 2021.
Australian uranium miner ERA will seek to extend its tenure over the Ranger uranium mine to allow for significant increases in the costs and timeline for rehabilitation of the site in the heart of the world-renowned Kakadu National Park.
Australian miner ERA and its parent company Rio Tinto are facing a potential bill over $A2B and two-year delay to rehabilitate the mothballed Ranger uranium mine in the NT.
A review by engineering firm Bechtel of the rehabilitation project has estimated the costs at $A1.6-2.2B, up from $973M previously, and its timescale to Q4 2027-Q4 2028 – nearly three years past ERA's legislated completion deadline.
Concern over the ballooning costs of rehabilitating the former Ranger uranium mine continues to grow, with Energy Resources of Australia announcing it will appoint a global engineering company to help develop a confident estimate.
Since its parent company Rio Tinto agreed to underwrite a $A476M fund-raising in 2019, ERA has issued muted but increasingly dire warnings that the cost overrun will be significant.
Expectations of the blowouts facing Australian uranium producer ERA for the rehabilitation of its Ranger mine site are becoming more dire, with the Rio Tinto subsidiary cautioning its cost and schedule overruns will be “material”.
ERA says it’s still not in a position to deliver confident forecasts of what it will take to clean up the remnants of nearly 40 years of mining on the site surrounded by the World Heritage-listed Kakadu National Park.
“The exercise is complex and is being undertaken as a matter of priority,” it says.
Australian uranium veteran ERA has warned it's facing blowouts in the costs and timeline of rehabilitating the environmentally sensitive site of nearly 40 years of uranium mining at its Ranger project, nestled inside a national park and on Aboriginal traditional land in the Northern Territory.
The company, majority owned by Anglo Australian major Rio Tinto, says it is still working out the full extent of the overruns.