Traditional owners have cautiously welcomed the appointment of Rio Tinto to manage the rehabilitation of the Ranger uranium mine in Kakadu.
Energy Resources Australia (ERA), which operated Ranger and is 86.3 per cent owned by Rio Tinto, announced a new management services agreement for the rehabilitation project in a statement to the Australian Stock Exchange on Wednesday.
In March, ERA announced it had applied for a renewal of the Jabiluka mineral lease within Kakadu, but Mirarr traditional owners are opposed to the move, saying they have concerns about the financial position of the company.
All mining operations and uranium processing at Ranger ceased on January 8, 2021.
Gundjeihmi Aboriginal Corporation, which represents the Mirarr traditional owners of the former mine and the Jabiluka mineral lease area, said the announcement was a long overdue recognition of the inability of ERA to manage the rehabilitation project.
Gundjeihmi chief executive Thalia van den Boogaard said Mirarr were alarmed in November 2022 to learn the Department of Industry, Science and Resources had allowed ERA to draw down $56.8 million on the limited Ranger rehabilitation trust funds held by the government, in order to prop up the company's finances.
ERA has said more than $1.2 billion would be needed to complete the rehabilitation project.
The drawdown left $481 million in the trust.
"That fund is intended to be the safety net ... that request showed us ERA was in trouble," Ms van den Boogaard said.
"This is a step in the right direction as a major operator with expertise like Rio Tinto is needed to turn this around."
Under the new agreement, Rio Tinto will manage all aspects of the mine rehabilitation.
"As the project moves into a new phase it will benefit from Rio Tinto's global expertise in mine closure," ERA chief executive Brad Welsh said.
All Rio Tinto services will be provided at cost once they commence.
Rio Tinto has also agreed to provide some services free, including the first 12 months of management team costs and access to internal technical expertise.
ERA will continue to directly manage its commitments in the town of Jabiru, along with its corporate and financial affairs, and assets and governance, including the Jabiluka mineral lease renewal.
Mirarr traditional owner Corben Mudjandi said while it was good news that Rio Tinto would manage the clean-up at Ranger, ERA was still in financial dire straits.
"It's also disappointing that one of the few things that will be left under ERA management is the Jabiluka mineral lease," he said.
"It's time for both the Northern Territory and Commonwealth governments to pay attention to Kakadu and dismiss the notion that ERA is in any state to hold on to a mineral lease anywhere, let alone over dual World Heritage-listed country that a generation of Australians fought to protect."
Uranium prices have risen over the past year, meaning several previously mothballed projects in Australia and overseas are being considered for reopening, including the Honeymoon mine in South Australia, 80km northwest of Broken Hill.
Ranger was Australia's longest continuous uranium mine.
ERA said the new agreement is expected to be implemented in the second quarter of 2024, with a transition period of two to three months, and an updated rehabilitation timeline for the Ranger project will be announced.
Either Rio Tinto or ERA may terminate the new management service agreement if there is an insolvency event.
