Bloomberg: Rio’s ERA Drops After Australia Uranium Mine Spill: Sydney Mover

Publish Date:
9th December 2013

By James Paton

read on Bloomberg website

Rio Tinto Group’s Energy Resources of Australia Ltd. tumbled the most in almost two years in Sydney trading after an acid and ore spill at its Ranger uranium mine near world heritage-listed Kakadu National Park.

ERA (ERA), 68.4 percent owned by London-based Rio, dropped 13 percent to A$1.135, the most since Feb. 1, 2012, while the benchmark S&P/ASX 200 Index fell 0.8 percent.

ERA halted processing after a hole developed in a leaching tank, causing it to split and release acid ore slurry, the Darwin-based company said Dec. 7. Containment systems prevented any impact on Kakadu, it said. More than half of Kakadu, the nation’s largest national park, is Aboriginal land.

“This may have an impact on some of their important relationships” with governments and the Aboriginal landowners in the region, the Mirarr, as the company seeks approval for underground exploration plans, Chris Drew, a Sydney-based analyst at RBC Capital Markets, said today by phone.

The plant can’t resume processing until ERA satisfies regulators the operation is safe and demonstrates the national park is protected, Ian Macfarlane, Australia’s industry minister, said today in a statement.

A clean-up is under way, ERA said. The company reiterated its 2013 forecast for production of between 2,800 metric tons and 3,200 tons and is evaluating the impact on 2014 output, it said in a statement yesterday.

The site produced 2,457 tons of uranium oxide in the first nine months of this year. Output is sold to power utilities in Asia, Europe and North America, according to Rio’s website.

Underground Switch

ERA shifted to the proposed Ranger 3 Deeps underground project after the completion of open pit mining last year at Ranger, one of only three mines in the world to produce more than 110,000 tons of uranium oxide, according to its website. Australia, the world’s third-largest uranium producer, behind Kazakhstan and Canada, has four mines including BHP Billiton Ltd.’s Olympic Dam, according to the World Nuclear Association.

The Gundjeihmi Aboriginal Corp., which represents traditional owners of the land, called for an independent investigation, while the Australian Greens Party wants an indefinite suspension of operations at Ranger.

ERA is cooperating with regulators and will start an investigation, it said Dec. 8. Water monitoring points around the mine have reported normal readings, it said yesterday.

Initial reports show there’s no threat to the surrounding environment or human health, according to the Australian government, which has begun its own probe.