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ERA updates Ranger rehabilitation costs

Friday, 7 December 2018

The estimated rehabilitation costs for the Ranger Project Area in Australia's Northern Territory have increased from AUD512 million (USD370 million) to AUD808 million, based on preliminary findings from a feasibility study.

ERA updates Ranger rehabilitation costs — The dredge 'Jabiru' in operation at Ranger's tailings facility (Image: ERA)

The AUD296 million increase is largely due to costs associated with tailings transfer to Pit 3, with additional water treatment and related infrastructure and revegetation requirements; higher forecast costs relating to site services and owners' costs; and an increase in contingency, the company said yesterday.

"The preliminary findings of the Feasibility Study further increase confidence to stakeholders that ERA's planned rehabilitation strategy will satisfy regulatory obligations, including the January 2026 milestone," the company said.

Ranger has been producing uranium from stockpiled ore since 2012, when mining operations ceased at the site. Under the existing authority from traditional land owners, mining and processing activities at Ranger must cease in January 2021, with final rehabilitation to be completed by January 2026. The feasibility study is being conducted on the basis of the Ranger Closure Plan, released earlier this year.

ERA said it is reviewing all funding options as a result of the likely increase in provision for the rehabilitation work. ERA and its 68.4% owner Rio Tinto are engaged in "active discussions" on options to manage the process, including possible funding solutions, the company said. ERA has also implemented a business transformation programme to increase cashflow from cost saving and productivity opportunities.

ERA had total "cash at bank" of AUD338 million as of 30 November 2018, in addition to AUD75 million of cash held by the Commonwealth Government as part of the Ranger Rehabilitation Trust Fund, bringing total cash resources to AUD413 million, the company said.

ERA in 2017 produced 2294 tU3O8 (1945 tU) from stockpiled ore and expects to produce between 1600 and 2000 tU3O8 in 2018. Ranger 3 Deeps, an extension of the Ranger 3 orebody estimated to contain 34,761 t U3O8, could provide around ten years of additional production but could only viably be developed if an extension to the Ranger Authority is granted. An exploration decline at Ranger 3 Deeps remains under care and maintenance.