Rio Tinto backs up rehab of Australia's Ranger Project area
By Josh White
Date: Friday 15 Nov 2019
(Sharecast News) - Rio Tinto said on Friday that it will support Energy Resources of Australia's (ERA) plans for a renounceable entitlement offer to raise $324m for the rehabilitation of the Ranger Project Area in Australia's Northern Territory.
The FTSE 100 mining giant said that as a 68.4% shareholder in ERA, it would subscribe to its full entitlement of approximately $221m.
Given ERA's inability to secure third-party underwriting support, Rio Tinto also agreed to fully underwrite the offer to ensure ERA had the funds it needed to meet its current rehabilitation obligations.
"We take mine closure very seriously and ensuring ERA is able to fund the closure and rehabilitation of the Ranger Project Area, through participating in this entitlement offer, is a priority," said Rio Tinto group executive of energy and minerals, Bold Baatar.
"We have committed to supporting this offer with the objective of ensuring ERA is in a position to rehabilitate Ranger to a standard that will establish an environment similar to the adjacent Kakadu National Park."
Under the terms of its mining approvals, ERA is required to end mining and processing activities at Ranger by January 2021, and complete final rehabilitation by January 2026.
On 8 February, it finalised its closure feasibility study for the Ranger Project Area rehabilitation, resulting in a material increase in anticipated rehabilitation costs.
Following that increase, ERA advised that it needed extra funding to meet its rehabilitation obligations to the Commonwealth Government, the Northern Territory Government and the area's traditional owners.
The rehabilitation expenditure for Ranger was not expected to generate any direct financial return for ERA.
At 0845 GMT, shares in Rio Tinto were up 1.88% at 4,168.26p.
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