Rio Tinto calls for resignation of Energy Resources of Australia Chairman
October 02 2022 - 5:43PM
Business Wire
Rio Tinto has requested the resignation of Energy Resources of
Australia’s (ERA) Chairman Peter Mansell to allow for board renewal
and introduce new perspectives to address the material cost and
schedule overruns on the critical Ranger rehabilitation project in
Australia’s Northern Territory.
Following announcement of the cost and schedule overruns in
February 2022, Rio Tinto has sought to work constructively with
ERA’s Independent Board Committee (IBC) to find a funding solution
to meet its rehabilitation obligations. This included engaging for
several months on an interim entitlement offer that was deferred by
the IBC in July 2022 when its proposed terms failed to obtain major
shareholder support.
Despite this engagement, Rio Tinto has remained deeply concerned
that the opposition to further uranium mining on the land of the
Mirarr People, the Traditional Owners of the area, has not been
appropriately recognised in any funding proposals put forward by
the IBC.
Following last week’s release of the Grant Thornton independent
valuation report which, in Rio Tinto’s view, failed to
appropriately recognise the Mirarr People’s position, Rio Tinto
asked the IBC to urgently develop a workable plan to fund the
increased rehabilitation costs. To date, a suitable plan addressing
the funding concerns has not been presented.
Rio Tinto chief executive Australia Kellie Parker said “Our
utmost priority and commitment is to the rehabilitation of the
Ranger Project Area in a way that is consistent with the wishes of
the Mirarr People. However, given our recent dealings with the IBC
and last week’s release of the Grant Thornton valuation report, we
do not believe that can be achieved without renewal within ERA’s
board.
“We thank Peter Mansell for his contribution to ERA over many
years and acknowledge his efforts to find a funding solution.
However, there remains a strong difference of opinion between Rio
Tinto and the IBC on the terms of rehabilitation funding, with the
IBC’s view that successful rehabilitation could underpin potential
future growth opportunities, despite the Mirarr People’s long-held
opposition to further uranium mining on their country."
“We look forward to working with ERA to facilitate board renewal
and urgently develop a workable plan to fund the increased
rehabilitation costs.”
Rio Tinto’s consistent position is that the terms of any ERA
funding solution should reflect fair value having regard to:
- the material cost overruns and interim funding
requirements;
- the Mirarr People’s publicly stated position on the future
development of Jabiluka; and
- Rio Tinto’s expectation that its rehabilitation commitment will
not generate any financial return.
While a funding solution for the rehabilitation is identified
and agreed, Rio Tinto is progressing discussions to amend an
existing A$100 million credit facility to assist ERA with its
management of immediate liquidity issues.
Rio Tinto reiterates its commitment to the successful
rehabilitation of the Ranger Project Area to a standard that will
establish an environment similar to the adjacent Kakadu National
Park.
This announcement is authorised for release to the market by
Steve Allen, Rio Tinto’s Group Company Secretary.
riotinto.com
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