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Rio Tinto calls for resignation of Energy Resources of Australia Chairman
Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Neutral)
Tags
management
Rhea-AI Summary
Rio Tinto has requested the resignation of Energy Resources of Australia’s (ERA) Chairman Peter Mansell to facilitate board renewal and address significant cost and schedule overruns on the Ranger rehabilitation project in Australia’s Northern Territory. Following cost overruns reported in February 2022, Rio Tinto has expressed concerns over funding solutions presented by ERA's Independent Board Committee, particularly regarding the Mirarr People’s opposition to uranium mining. Rio Tinto aims to develop a workable plan for rehabilitation funding and is considering amendments to a A$100 million credit facility to assist with ERA's liquidity challenges.
Positive
Board renewal may lead to fresh perspectives on managing the Ranger rehabilitation project.
Rio Tinto's commitment to rehabilitation aligns with the wishes of the Mirarr People.
Negative
Continued disagreements with ERA's Independent Board Committee on the funding terms for rehabilitation.
Lack of a workable funding solution for increased rehabilitation costs, affecting project timelines.
MELBOURNE--(BUSINESS WIRE)--
Rio Tinto has requested the resignation of Energy Resources of Australia’s (ERA) Chairman Peter Mansell to allow for board renewal and introduce new perspectives to address the material cost and schedule overruns on the critical Ranger rehabilitation project in Australia’s Northern Territory.
Following announcement of the cost and schedule overruns in February 2022, Rio Tinto has sought to work constructively with ERA’s Independent Board Committee (IBC) to find a funding solution to meet its rehabilitation obligations. This included engaging for several months on an interim entitlement offer that was deferred by the IBC in July 2022 when its proposed terms failed to obtain major shareholder support.
Despite this engagement, Rio Tinto has remained deeply concerned that the opposition to further uranium mining on the land of the Mirarr People, the Traditional Owners of the area, has not been appropriately recognised in any funding proposals put forward by the IBC.
Following last week’s release of the Grant Thornton independent valuation report which, in Rio Tinto’s view, failed to appropriately recognise the Mirarr People’s position,Rio Tinto asked the IBC to urgently develop a workable plan to fund the increased rehabilitation costs. To date, a suitable plan addressing the funding concerns has not been presented.
Rio Tinto chief executive Australia Kellie Parker said “Our utmost priority and commitment is to the rehabilitation of the Ranger Project Area in a way that is consistent with the wishes of the Mirarr People. However, given our recent dealings with the IBC and last week’s release of the Grant Thornton valuation report, we do not believe that can be achieved without renewal within ERA’s board.
“We thank Peter Mansell for his contribution to ERA over many years and acknowledge his efforts to find a funding solution. However, there remains a strong difference of opinion between Rio Tinto and the IBC on the terms of rehabilitation funding, with the IBC’s view that successful rehabilitation could underpin potential future growth opportunities, despite the Mirarr People’s long-held opposition to further uranium mining on their country."
“We look forward to working with ERA to facilitate board renewal and urgently develop a workable plan to fund the increased rehabilitation costs.”
Rio Tinto’s consistent position is that the terms of any ERA funding solution should reflect fair value having regard to:
the material cost overruns and interim funding requirements;
the Mirarr People’s publicly stated position on the future development of Jabiluka; and
Rio Tinto’s expectation that its rehabilitation commitment will not generate any financial return.
While a funding solution for the rehabilitation is identified and agreed, Rio Tinto is progressing discussions to amend an existing A$100 million credit facility to assist ERA with its management of immediate liquidity issues.
Rio Tinto reiterates its commitment to the successful rehabilitation of the Ranger Project Area to a standard that will establish an environment similar to the adjacent Kakadu National Park.
This announcement is authorised for release to the market by Steve Allen, Rio Tinto’s Group Company Secretary.
Media Relations, UK Illtud Harri M +44 7920 503 600
Matthew Klar M+ 44 7796 630 637
David Outhwaite M +44 7787 597 493
Media Relations, Americas Simon Letendre M +514 796 4973
Malika Cherry M +1 418 592 7293
Media Relations, Australia Jonathan Rose M +61 447 028 913
Matt Chambers M +61 433 525 739
Jesse Riseborough M +61 436 653 412
Investor Relations, UK Menno Sanderse M: +44 7825 195 178
David Ovington M +44 7920 010 978
Clare Peever M +44 7788 967 877
Investor Relations, Australia Tom Gallop M +61 439 353 948
Amar Jambaa
M +61 472 865 948
Rio Tinto plc 6 St James’s Square
London SW1Y 4AD
United Kingdom
T +44 20 7781 2000
Registered in England No. 719885
Rio Tinto Limited Level 43, 120 Collins Street Melbourne 3000
Australia
T +61 3 9283 3333
Registered in Australia ABN 96 004 458 404
Category: ERA
Source: Rio Tinto
FAQ
Why did Rio Tinto request the resignation of Peter Mansell from Energy Resources of Australia?
Rio Tinto requested Peter Mansell's resignation to renew the board and better address cost and schedule overruns in the Ranger rehabilitation project.
What are the concerns Rio Tinto has regarding the Ranger rehabilitation project?
Rio Tinto is concerned about funding proposals that do not adequately acknowledge the Mirarr People's opposition to uranium mining.
What funding solutions has Rio Tinto proposed to Energy Resources of Australia?
Rio Tinto has proposed to amend an existing A$100 million credit facility to help ERA manage immediate liquidity issues while seeking a long-term funding plan.
What impacts could the board renewal have on Energy Resources of Australia?
Board renewal may bring fresh perspectives that could lead to effective solutions for the Ranger rehabilitation project's financial and operational challenges.
