Energy Resources of Australia (ERA) is seeking “urgent” funds to meet the increased rehabilitation cost of its ceased Ranger uranium mine in the Northern Territory.
In February, ERA announced an additional $600 million had been added to the bill, forecasting the revised total cost of rehabilitating Ranger, including incurred spend from January 1 2019, to be between approximately $1.6 billion and $2.2 billion.
The price outlined in the 2019 Ranger closure feasibility study was $973 million.
In a statement, ERA said its current cash-on-hand position required an “urgent interim funding solution” and that it was “reviewing all available options” to solve the shortfall.
“ERA is engaging with its substantial shareholders in relation to a potential interim entitlement offer to raise ongoing funding for the rehabilitation of the Ranger project,” the company said. “The size, price and structure of the interim entitlement offer are still to be determined.”
ERA expects to announce details of an entitlement offer in the coming weeks.
It comes after the Australian Financial Review (AFR) published an article implying ERA’s economic quandary. The AFR said the former uranium miner was working with its bankers at Flagstaff Partners to establish support for a potential $300 million equity raise.
The article suggested that Rio Tinto, which owns an 86 per cent stake in ERA, would contribute $250 million, with ERA’s minority shareholders to cover the rest.
The AFR found ERA had $144 million on hand as of May 31, with the Australian Government holding $535 million as part of the Ranger Rehabilitation Trust Fund.
ERA expects to complete its Ranger rehabilitation project between the fourth quarter of 2027 and the fourth quarter of 2028. The company had previously outlined its goal to complete rehabilitation by January 2026.
The Ranger re-forecast exercise has highlighted the many processes involved in closing a uranium mine, including additional costs and scheduled impacts in converting the project’s tailings storage facility into a water storage facility.
ERA ceased activities at Ranger in January 2021 after four decades of operation.