Funding for the multibillion-dollar clean-up of the Ranger uranium mine, carved out of the Kakadu national park in the Northern Territory, has been thrown into limbo due to a corporate stoush over attempts to revive mining in the area.
Rio Tinto, the majority shareholder in Energy Resources Australia, which owns the tapped-out Ranger mine and the neighbouring Jabiluka deposit, says it wants to fund the clean-up of Ranger and will not develop Jabiluka without the consent of traditional owners. The Mirrar people, whose lands cover both mining leases, are adamantly opposed to any further mining.
But minority shareholders in ERA have been pushing for the company to consider reopening Jabiluka and look into a project mining deep below Ranger, which was previously rejected as uneconomic.
The dispute came to a head this week when directors of ERA who aren’t affiliated with Rio released a valuation of the company, done by accounting firm Grant Thornton, that assumes mining at Jabiluka may be possible. It contends that the Mirrar could recognise there are “long-term economic benefits” for them in allowing it to go ahead.
In addition to Jabiluka, the report also lists as an “opportunity” a project called Ranger 3 Deeps – a potential mine that lies deep below the existing Ranger mine.
ERA formally closed that project in 2019, sealing it off and flooding the access shaft to it, after deciding it wasn’t worth pursuing.
If accepted , the valuation could enable minority shareholders who bought into ERA at about 15c a share in 2019 to cash out at 20c or more.
However, both the Mirrar people and Rio furiously reject the idea mining might resume.
Instead, they want to get on with rehabilitating the Ranger site, a vast open-pit scar across the landscape. Estimates on this rehabilitation work range from $1.6bn to $2.2bn.
The land was supposed to be restored to a similar state to the surrounding national park and handed back to the commonwealth by 2026.
But this month the Albanese government introduced legislation to parliament abolishing the deadline, which all involved agree was not going to be met.
This week the Gundjeihmi Aboriginal Corporation, which represents the Mirrar people, said generations of traditional owners were, and would continue to be, opposed to mining.
“We don’t just say ‘no’, we are saying ‘never’,” Corben Madjandi, a younger traditional owner, said.
“This report tells me the mining industry is not listening – it’s like we’re talking to ourselves. Are they deaf to us?”
Rio’s chief executive for Australia, Kellie Parker, says her company has learned from the Juukan Gorge debacle in 2020, where it blew up rock shelters that were tens of thousands of years old, and has received the message from the Mirrar people loud and clear.
Parker said she accepted that a valuation could take into account a change of attitudes over generations, but the idea that mining could start within 10 years was “fundamentally disrespectful to the Mirrar, to start with, and then it’s just inconsistent to what they have been saying for decades”.
She said Rio was “totally committed to completing the rehab at Ranger to the correct environmental standards”. She added that the company was willing to fund ERA to do it so long as all the money goes into rehabilitation and none of it is used to explore the possibility of restarting mining.
The process is made more complicated because while Rio owns 86% of ERA, it doesn’t have complete control. Instead, ERA has formed a committee of the board made up of directors who aren’t affiliated with Rio to oversee the process. It’s this independent board committee that commissioned the Grant Thornton valuation.
“There’s been multiple back and forth around how we can support ERA but every time they put something to us it is breaching these principles,” Parker said.
“We just don’t find the mechanism where you can just put the money straight into the ground and into actually improving the environmental outcomes at Ranger.”
The Gundjeihmi Aboriginal Corporation supports the stance taken by Rio.
“Gundjeihmi welcomes Rio Tinto’s commitment to respect the long-held opposition of the Mirrar to mining at Jabiluka,” the GAC chief executive, Justin O’Brien, said.
On the other side of the argument is Perth investor Willy Packer, and the Investigator Trust, which owns 7.9% of ERA and is run by his company, Packer & Co.
In June the ERA stake made up 2.9% of the trust’s $1.9bn in investments, or about $55m, according to a report published on Packer & Co’s website.
Packer said he bought into ERA in 2019 following the Fukushima disaster, when the company’s share price was 15c. He said the fund was a long-term shareholder and was not interested in selling the shares for a trading profit.
“Jabiluka is possibly the best undeveloped uranium deposit in the world,” he told Guardian Australia.
“It is a magical deposit. At the moment, if you mined it, you’d get $50bn worth of uranium ore out of it.”
He said the deposit could be worth even more if uranium prices went back to their historical highs as demand for clean energy increases.
“It’s less CO2 than a windfarm and less CO2 than a solar farm,” he said. “Things like this deposit outlive companies. They outlive the Mirrar, they outlive all of us.”
Another key player has been Singaporean fund Zentree Investments, run by trader Richard Magides. At one stage in 2019 Zentree owned about 16.5% of ERA, but since then its holdings appear to have dipped below the 5% threshold at which they need to be disclosed, although Magides told Guardian Australia that Zentree still owns shares in the company.
In late 2019, Zentree objected to ERA raising capital to help fund the Ranger clean-up on the grounds that it was unfair to minority shareholders.
The Takeovers Panel allowed the deal to go ahead after Rio said it intended to take full control of ERA if it acquired more than 90% of the company’s shares.
Magides said Zentree invested in the company after its management visited Singapore and showed him a plan to develop Ranger 3 Deeps.
“The company raised capital from minorities both for rehabilitation and for development and our focus was this development,” he told Guardian Australia.
He said the uranium could be used to fight global warming by providing “zero carbon base load power”.
“I fully agree with anyone’s passion, and commitment to protect the land and the environment, but that does not mean all mining is bad, especially when carried out in a professional controlled way,” he said.
Grant Thornton defended its work on the valuation report, saying it followed the framework set out in the Corporations Act.
“These sorts of assessments are subjective and this is set out in the report,” a spokesperson said.
“The opposition of the traditional owners to the development of the Jabiluka site is extensively acknowledged and documented in the report. Our report does not suggest the traditional owners will change their view or would provide approval.”
