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Rio Tinto to support ERA’s entitlement offer to raise funds for Ranger rehabilitation
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
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Rhea-AI Summary
Rio Tinto will support Energy Resources of Australia Ltd's Interim Entitlement Offer (IEO) to raise up to A$369 million for the Ranger Rehabilitation Project in Northern Territory, aiming for completion by Q2 2024. Holding 86.3% of ERA's shares, Rio has committed to subscribe to its full entitlements worth A$319 million. CEO Kellie Parker emphasized the commitment to complete the project's rehabilitation effectively. Funds raised will also repay a A$100 million credit facility provided by Rio, with no expected financial returns from the IEO.
Positive
Rio Tinto is committed to funding the Ranger Rehabilitation Project, indicating strong support for environmental initiatives.
The IEO funds will help address funding requirements and support the project's timely completion.
Negative
Funds from the IEO are not expected to generate financial returns, limiting potential gains for shareholders.
The commitment to the project reflects underlying liquidity issues faced by ERA.
MELBOURNE, Australia--(BUSINESS WIRE)--
Rio Tinto will support Energy Resources of Australia Ltd’s (ERA) recently disclosed plans for an Interim Entitlement Offer (IEO), which seeks to raise up to A$369 million to address funding requirements for the Ranger Rehabilitation Project in Australia’s Northern Territory to the end of Q2 2024.
Rio Tinto, which owns 86.3% of ERA’s shares, has pre-committed to subscribe for its full entitlements under the terms of the IEO, at a cost of A$319 million.
Rio Tinto Chief Executive, Australia, Kellie Parker said “We are committed to ensuring the critical rehabilitation of Ranger is completed to a standard that will establish an environment similar to the adjacent Kakadu National Park.”
Rio Tinto notes that ERA has, in the IEO offer material, recognised the Mirarr People’s opposition to further uranium mining on their land. This was a relevant factor in Rio Tinto’s recent decision to no longer report the Jabiluka deposit as a mineral resource. Rio Tinto also recognises that the Mirarr People’s continued involvement in and support of the Ranger Rehabilitation Project is critical for its timely completion and success.
As announced by ERA today, funds from the IEO are not expected to generate any financial return and will be dedicated strictly to the Ranger Rehabilitation Project and repayment of the credit facility.
Funds raised from this IEO will be partly used to repay a A$100 million credit facility provided by Rio Tinto to assist ERA with its management of immediate liquidity issues.
What is Rio Tinto's involvement with the Ranger Rehabilitation Project?
Rio Tinto is committing to support the Ranger Rehabilitation Project by participating in Energy Resources of Australia's Interim Entitlement Offer to raise funds.
How much money is Rio Tinto raising through the IEO?
Rio Tinto's support for the IEO will help raise up to A$369 million for the Ranger Rehabilitation Project.
When is the Ranger Rehabilitation Project expected to be completed?
The Ranger Rehabilitation Project is expected to be completed by the end of Q2 2024.
How much is Rio Tinto contributing to the IEO?
Rio Tinto has committed to subscribe for its full entitlements under the IEO at a cost of A$319 million.
What will the funds from the IEO be used for?
The funds raised from the IEO will be used for the Ranger Rehabilitation Project and to repay a A$100 million credit facility.
