Revised costs to rehabilitate the Ranger uranium mine in the Northern Territory’s Kakadu National Park could set Rio Tinto back at least $627 million more than first anticipated.
Revised costs to rehabilitate the Ranger uranium mine in the Northern Territory’s Kakadu National Park could set Rio Tinto back at least $627 million more than first anticipated.
Rio today noted preliminary findings from a cost-and-gap analysis review that indicated funds needed to rehabilitate the now closed Ranger uranium mine could fall between $1.6 billion and $2.2 billion.
That’s at least an additional $627 million based on the $973 million forecast in a closure feasibility study from 2019.
“Rio Tinto notes Energy Resources of Australia Ltd (ERA) today released the preliminary findings from its reforecast of the cost and schedule for the Ranger rehabilitation project in Australia’s Northern Territory, which have been subject to independent review,” the miner said in a statement.
“Rio Tinto is reviewing the preliminary findings of this reforecast and has advised ERA that it is committed to working with the company to ensure the rehabilitation of the Ranger project area is successfully achieved to a standard that will establish an environment similar to the adjacent Kakadu National Park.”
The Ranger Mine, which is owned by ASX-listed Energy Resources of Australia, was one of the longest continually operating uranium oxide producers in the world.
Production and mining ceased in January 2021 after 40 years of operation, with Rio Tinto - through its majority owned ERA subsidiary - required to complete final rehabilitation of the site by January 2026.
Ranger had been contentious to begin with given the nature of its operations and its locale on environmentally sensitive land.
The mine project area spans 79 square kilometres and sits within the World Heritage-listed Kakadu National Park, though ERA notes the mine is technically separate from the park.
It’s also not the first time costs to rehabilitate the site have gone over, with updates in September, October and November last year from ERA advising of schedule and financial overruns.
With a new budget to consider, ERA said it is currently reviewing all available funding options.
It reported about $699 million in cash, made up of $164 million at bank and $535 million in cash held by the federal government’s Ranger rehabilitation trust fund.
The government is also holding $125 million in bank guarantees.
Rio has said it will work with ERA to ensure the site was rehabilitated.
US engineering company Bechtel was engaged to perform the independent review.
Shares in Rio and Energy Resources of Australia both closed Wednesday up, by 2.32 per cent and 1.56 per cent, respectively, to trade at $111.43 and 32 cents.
