Energy Resources of Australia raising $476m for Ranger Mine environment clean-up
Uranium miner Energy Resources of Australia announces $476m capital raising to rehabilitate Ranger Mine environment.
Uranium miner Energy Resources of Australia has announced a $476m capital raising to meet its legal obligations to rehabilitate the environment around its Ranger Mine in the Northern Territory.
The money won’t generate any returns but “is a prerequisite to support future operations and growth beyond Ranger”.
Ranger has not been mined for seven years and ERA has been processing uranium stockpiles since, which must finish by 2021, and the clean-up by 2026.
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Majority shareholder and the world’s second-biggest miner Rio Tinto, which owns 68.4 per cent of ERA, had been pressuring the company to conduct the raising.
The offer price of 15c a share represents a 38 per cent discount to its average price of 24c for the past 10 days.
Rio Tinto said it will take up its $326m share and was forced to fully underwrite the $476m equity fundraising with ERA not finding anyone else. ERA shares fell 16 per cent to 20.5c.
Minority shareholders, including the second-largest holder Zentree Investments, oppose the raising, believing Rio is positioning itself to swallow up the rest of the company and even re-start mining when uranium prices improved.
Ranger has long been controversial because it is surrounded by the World Heritage listed Kakadu National Park and has a history of environmental incidents.
The funds were needed to “enable ERA to continue as a going concern”, the company said.
The Mirarr Traditional Owners welcomed the announcement saying massive cost blow-outs in the remediation works - now estimated at $925m - was a source of significant concern”.
“The need for a funding solution is urgent,” the Mirarr said in a statement. “The full amount of the rehabilitation provision, together with ongoing Commonwealth government investment in monitoring and management of the site, will be required to provide long-term protection of both the Ranger Project Area and the surrounding World Heritage listed Kakadu National Park.”
AAP