Energy Resources Australia (ERA) Chairman, Peter Mansell, will resign his position alongside two independent non-executive directors after failing to meet rehabilitation obligations at the Jabiluka uranium deposit in Western Australia.
ERA’s major shareholder Rio Tinto requested the resignation after it was revealed efforts to rehabilitate the uranium mine would cost $1.2 billion more than expected, and not be completed until 2028.
The revelations were contained in an Independent Expert’s Report on the fair value of the company, prepared by Grant Thornton Corporate Finance on behalf of the ERA.
The report was roundly criticised for suggesting that new mining operations could be considered at Jabiluka – despite the wishes of Native Title groups and a 2001 commitment from Rio Tinto.
The ERA has since announced the resignation of Mr Mansell, and two non-executive directors responsible for the project.
Despite this, ERA’s Independent Board Committee (IBC) denied any wrongdoing and suggested media reports contained ‘factual inaccuracies’.
“In light of recent developments in their dealings with Rio Tinto, and noting the requests (all post receipt of the Independent Expert’s report) from Rio Tinto that Peter Mansell consider his position as Chair of ERA, the independent directors of ERA do not believe that it is in the best interests of ERA for them to continue to work with Rio Tinto into the future,” an IBC spokesperson said.
“Accordingly, the Chairman, Peter Mansell, and independent non-executive directors, Paul Dowd and Shane Charles (who comprise the IBC), advised Rio Tinto last week of their respective intentions to resign from the board of ERA, as soon as, inter alia, a clear pathway to an interim funding solution for the Company is arrived at.
“The IBC will endeavour to continue discussions with Rio Tinto to find an interim funding solution as soon as possible and will update shareholders in due course.”
Rio Tinto Chief Executive Australia, Kellie Parker, said the company’s priority was the full rehabilitation of the Ranger Project Area neighbouring the Kakadu national park in Western Australia.
“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,” Mr Parker said.
“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.”
While a funding solution for the rehabilitation is identified and agreed, Rio Tinto is progressing discussions to amend an existing $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.
