Rio Tinto (RIO.AX), (RIO.L) said on Tuesday it would buy A$319 million ($216.54 million) worth of shares in Energy Resources of Australia (ERA) (ERA.AX) to help fund rehabilitation costs related to a former uranium mine in the Northern Territory.
Rio Tinto, the majority shareholder in ERA which owns and operates the Ranger mine site, has been under pressure to fund the cleanup costs. The site is surrounded by the Kakadu national park rainforest.
Rehabilitation costs are estimated at A$1.6 billion to A$2.2 billion, ERA said in a statement.
ERA is hoping to raise up to A$369 million via an entitlement offer, with Packer & Co and Zentree Investments Ltd also expected to contribute to the capital raising.
Even if the offer is fully subscribed, ERA will need another A$210 million to A$756 million to fund the remaining rehabilitation cost, the company said, adding that it was likely to miss its January 2026 rehabilitation deadline.
“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,” said Rio Tinto’s chief executive for Australia, Kellie Parker.
The uranium mine and the planned development of the nearby Jabiluka uranium concession were the target of some of the biggest environmental protests across Australia in 1998, including an eight-month blockade and 500 arrests, after the local Indigenous Mirarr people opposed them.
The Australian government documented more than 200 environmental incidents at the mine between 1979 and 2003.
Learn more: Reuters 