11th Jun 2015 17:22
LONDON (Alliance News) - Mining giant Rio Tinto PLC Thursday said it is assessing a potential non-cash impairment charge of about USD300 million after tax on its 68.4% stake in uranium producer Energy Resources of Australia Ltd, which has said it won't proceed with a final feasibility study of the Ranger 3 Deeps project for the time being.
Energy Resources of Australia said it arrived at its decision because the uranium market has not improved as the company had expected, with uncertainty about its direction in the immediate future. Citing a prefeasibility study, the uraniun producer said the economics of the project
require operations beyond the current Ranger Authority, which expires in 2021.
ERA's Ranger mine is eight kilometres east of Jabiru and 260 kilometres east of Darwin, located in Australia's Northern Territory. The uranium producer said it has already begun talks with representatives of the Mirarr people, the traditional owners of the land on which its operates, and the Australian Commonwealth Government over a possible extension to the Ranger Authority, with cash to be conserved until there is more certainty on the matter.
In a statement, Rio Tinto said it agreed with Energy Resources of Australia's decision.
"After careful consideration, Rio Tinto has determined that it does not support any further study or the future development of Ranger 3 Deeps due to the project's economic challenges," Rio Tinto said in a statement.
"Rio Tinto recognises the importance of ongoing rehabilitation work at the Ranger mine site, which is surrounded by the World Heritage-listed Kakadu National Park. Rio Tinto is engaged with ERA on a conditional credit facility to assist ERA to fund its rehabilitation program, should additional funding be required beyond ERA's existing cash reserves and the future earnings from processing ore stockpiles," Rio Tinto added.
Rio Tinto shares closed down 0.1% at 2,839.00 pence in London on Thursday.
By Samuel Agini; [email protected]; @samuelagini
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