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The cash-strapped mining company responsible for rehabilitating the uranium mine site in Kakadu National Park has been granted access to almost $60 million from its security bond held by the federal government.
Key points:
- ERA says the federal government has approved its request to access its security bond
- The company has been struggling to fund the required rehabilitation of the mine site
- The estimated cost of the clean up has continued to blow out and stands at $2.2 billion
Energy Resources of Australia (ERA) is struggling to cover the costs of the clean up of Ranger Uranium Mine, which closed early last year after more than 40 years in operation.
It's been estimated rehabilitation of the contaminated site and all infrastructure on it could cost more than $2.2 billion.
Last month, mining giant Rio Tinto – which is ERA's major shareholder – agreed to loan $100 million to ERA to help cover clean up costs.
In an announcement to the ASX yesterday, ERA said it had been approved for an interim payment from the Ranger Rehabilitation Trust Fund, which holds $537 million.
The application, which was approved by Minister for Resources and Northern Australia Madeleine King, related to rehabilitation activities completed during an 18 month period from January 2021 and June 2022.
"The interim drawdown amount is $56.8 million and ERA expects to receive these funds in November 2022," the announcement read.
"After drawdown, the sum of $481 million will remain in the Ranger Rehabilitation Trust Fund."
The company said it appreciated "support" from Minister King and the federal industry department "in evaluating the interim drawdown request and working collaboratively to support our goal of world class rehabilitation of the Ranger Project Area."
Mixed response to government's release of funds
Environment Centre NT co-director Kirsty Howey NT said it was "extraordinary" that the draw down had been approved, despite there not being enough money in the fund to cover the estimated costs of rehabilitation.
"Security bonds for mines are the insurance policy that the public has, that if things get tough for the company there'll be enough money to clean up the site, and that's the thing that we're worried about," she said.
"It's an extraordinary decision that's been made by the Commonwealth and it's an extraordinary application from ERA."
But an ERA spokesperson said the fund, which was established in 1981, was always intended to be progressively drawn down.
The spokesperson said the company had applied in August for the release of funds to cover the completed rehabilitation works.
Justin O'Brien from the Gundjeihmi Aboriginal Corporation was satisfied with the release of the funds, saying it was "an example of the regulatory system working."
"They are released upon the satisfactory completion of [rehabilitation] works, as determined by the supervising scientist," he said.
"But it doesn't, obviously, go anywhere near the meeting the full cost of rehabilitation.
"There's a lot of uncertainty still."
Before the $100 million loan from Rio Tinto, ERA raised the prospect of mining the nearby Jabiluka uranium deposit, a suggestion which shocked Mirrar traditional owners and forced resignations from the company's board.
The federal government is also extending the deadline for ERA to rehabilitate the site from 2026 to 2028.
Minister King's office has been contacted for comment.