The directors of the company that owns the Jabiluka and Ranger uranium deposits at Kakadu, Energy Resources Australia, who aren’t affiliated with majority shareholder Rio Tinto say they will resign amid a fight over whether there should be mining at the site.
It came after Rio Tinto dramatically escalated its war with minority shareholders in ERA on Monday by calling on the company’s chair, Peter Mansell, to resign.
Rio, which owns 86% of ERA, has pledged to rehabilitate the tapped-out Ranger open-cut mine and says it will not dig for uranium at Jabiluka as long as its traditional owners, the Mirarr people, maintain their long-held opposition to the mine.
However, minority shareholders in ERA want the company to develop the Jabiluka deposit and look into re-starting a project to mine deep below the Ranger pit.
Following Rio’s call, ERA said Mansell, together with independent directors Paul Dowd and Shane Charles, told Rio they intended to resign as soon as “a clear pathway to an interim funding solution for the company is arrived at”.
The stoush has thrown into limbo efforts to raise up to $2.2bn needed for the remediation of Ranger – work that is already suffering from large cost blowouts and lengthy delays.
It boiled over last week when a valuation report, commissioned from accounting firm Grant Thornton by non-Rio members of ERA’s board, canvassed the possibility of developing Jabiluka and said there might be some value in Ranger 3 Deeps, a deposit below Ranger that ERA has previously looked at but decided would not be economic to mine.
On Monday, Rio said it had requested Mansell resign “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”.
Rio’s chief executive for Australia, Kellie Parker, said the company was committed to rehabilitating the Ranger area “in a way that is consistent with the wishes of the Mirarr people”.
“However, given our recent dealings with the IBC [independent board committee] 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,” she said.
“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.”
ERA said Rio was aware that Mansell, Dowd and Charles were intending to resign before publicly calling for Mansell’s head on Monday morning.
The company also complained that media coverage of the stoush, including by Guardian Australia, “contains factual inaccuracies” that included implying that ERA would develop Jabiluka without the consent of the Mirrar people.
One of the key minority shareholders, Richard Magides of Zentree Investments, accused Rio of “bully-like behaviour to directors and minorities”.
“They call all the shots, but, it seems, if directors try to fulfil their fiduciary responsibility to ALL shareholders and not just execute Rio’s ‘suggestions’, Rio may pressurise them to leave,” Magides told Guardian Australia.
Another key minority shareholder, Willy Packer of Packer & Co, said that “the independent board members of ERA, who were originally appointed by Rio Tinto, have been persecuted and oppressed by Rio to the point they all want to quit, leaving Rio employees as the only members of the ERA board”.
“Rio is blaming ERA’s independent directors for the rehabilitation cost blowout even though Rio employees have run ERA’s operations for 20 years. A disingenuous claim.
“Clearly the reason Rio’s senior executives are fuming is that the ERA independent directors are not toeing the line but are acting independently.”
Justin O’Brien, the chief executive of the Gundjeihmi Aboriginal Corporation, which represents the Mirarr, called on the Albanese government to step in urgently to “secure the integrity of Kakadu National Park”.
“This public stoush over whether or not ‘magical’ uranium deposits in a World Heritage listed wetland and indigenous cultural landscape should be mined is a question of national public policy,” he said.
“One thing has been made very obvious in this – company directors, speculative investors and valuers cannot and will not make balanced and sensible decisions affecting our national cultural heritage,” he said.
“They will be motivated by financial return alone rather than the totality of our public interest. This is the lesson we should have learned from the Juukan Gorge inquiry.”
Grant Thornton has defended its work, last week telling Guardian Australia that it had followed the law in preparing the valuation report.
“The opposition of the traditional owners to the development of the Jabiluka site is extensively acknowledged and documented in the report,” a spokesperson for the firm said.
“Our report does not suggest the traditional owners will change their view or would provide approval.”
