Rio Tinto has stated that concerns about the funding for rehabilitation of the Northern Territory Ranger mine site are hypothetical, and remain the concerns of the ERA board of directors.
CEO Sam Walsh once again shrugged off suggestions that Rio Tinto, as 68 per cent shareholder in ERA, is responsible as the parent company for any of ERAs financial shortcomings in regard to rehabilitation and clean-up at the Ranger uranium mine.
The Australian company chief was asked several times, during the Australian AGM in Melbourne this morning, about the issue of Rio Tinto taking responsibility for any shortfalls of funding for clean-up at Ranger, which ERA has admitted it will not be able to fund without income from the Ranger 3 Deeps expansion.
“ERA is a separate public company, and the board of directors will be responsible for the affairs of that company,” Walsh said.
“Ranger 3 Deeps is an important element in relation to ERA, it does provide the ongoing operations plan, and it also provides the operations funding as the business goes forward, including some funding for rehabilitation work.
“If Ranger 3 Deeps didn’t proceed, there is an issue for the ERA board… and all shareholders in relation to rehabilitation and other work that needs to take place.
“It appears from impression people have is that there’s nothing physical going on in relation to rehabilitation – there is.”
Walsh said that there has been $73 million spent by ERA on rehabilitation work, and a further $220 million slated to fund the brine concentrator, which will process water used in uranium mining operations.
“There is a plan for funding for the rehabilitation as we go forward,” Walsh said.
“We are committed to the highest standards of rehabilitation and clean-up.
“There is a plan to fund it, there is work on the ground physically happening, and your question is hypothetical.
"Rio Tinto will play its part in doing whatever that board [ERA] deems is appropriate."
David Sweeney of the Australian Conservation Federation, in his question to Sam Walsh and the Rio Tinto board of executives, suggested that because ERA reports to RioTinto’s energy division, it will be “closely watched and long judged on its actions regarding ERA”.
"I thought his response was very partial and legalistic," Sweeney said.
"Clearly Energy Resources Australia is a separate legal entity to Rio Tinto, but Rio provides the mining instructions, they provide the management, the CEO of ERA is appointed by Rio and is always a Rio person, Rio's energy division manages ERA.
"It is absolutely a Rio Tinto subsidiary, it is a Rio Tinto child, and it concerns us greatly now that, when it's coming to the pointy end of what will be a costly and complex rehabilitation exercise, ERA is saying they don’t have the funding capacity and Rio Tinto is saying they don’t have the responsibility.
"Just this week, Rio bailed ERA out of a problem caused by the suspension of mineral processing, by saying that they will pool Australian and Namibian uranium through the Rio Tinto marketing authority."
Sweeney agreed that Walsh's assessment of ERA as a seperate Australian Company was precise and correct in a legal sense, but did not cover their corporate responsibility.
"Legally, it might be precise and correct, but in relation to on the ground reality, ethical responsibility and good corporate governance, it doesn't fly," he said.
"Rio Tinto runs ERA, and Rio Tinto has profited from ERA, and now Rio Tinto must underwrite the costs of cleaning up that operation."