22/06/2015 - 12:38

Rio subsidiary hit by board resignations

22/06/2015 - 12:38

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The independent directors of Energy Resources of Australia have quit after a disagreement with major shareholder Rio Tinto over the future of its Ranger uranium mine in the Northern Territory.

Rio subsidiary hit by board resignations

The independent directors of Energy Resources of Australia have quit after a disagreement with major shareholder Rio Tinto over the future of its Ranger uranium mine in the Northern Territory.

Chairman Peter McMahon and independent non-executive directors Helen Garnett and David Smith resigned on Saturday, leaving just three Rio appointees on the board.

ERA recently announced that its proposed Ranger Deeps underground mine would not proceed to a final feasibility study for now, due to a sluggish uranium market.

The board wanted to extend its authority to operate Ranger in order to re-visit the expansion at some stage.

However Rio, which has a 68.4 per cent shareholding in ERA, said it did not support any further study or future development of Ranger Deeps due to the project’s economic challenges.

This decision also followed recurring protests by environmental groups over the mine, which is located near Kakadu National Park.

The outgoing board members said today that Rio's opposition to any development made it hard for the company to pursue its stated approach.

ERA said it would search for replacement independent board members, and was conserving cash while it discussed its plans with the federal government and traditional landowners.

The remaining board members have appointed Andrea Sutton as interim chair.

The company said it was assessing whether its assets may be impaired.

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