Australia: Ranger Uranium Mine rehabilitation costs increasePublished by MAC on 2018-12-14
... amid fears over long-term monitoring
For those who have been following the issue of the rehabilitation of ERA's Ranger uranium mine (owned ultimately by parent company Rio Tinto), the story below will come as no surprise.
With the end of commercial mining in sight, assisted by the resistance of land owners to further expansion, the key issue for some time has been around rehabilitation.
The local land owners and evironmentalists have been sceptical about the level of rehabilitation that will be done, given the area should be reincorporated into the Kakadu National Park, from which it had been excluded. It now appears that costs are rising, and more importantly it seems there is little responsibilty being taken by the company for even medium term monitoring, let alone into perpetuity that such dangerous mining should surely demand.
Ranger Uranium Mine rehabilitation costs blow out by $296m amid fears over long-term monitoring
By Felicity James
11 December 2018
The cost of rehabilitating a uranium mine surrounded by a World-Heritage-listed national park will be almost $300 million higher than previous estimates, uranium producer Energy Resources of Australia (ERA) has conceded.
- Revised figures show it will now cost $808m to rehabilitate the Ranger Uranium Mine
- Mining giant Rio Tinto has vowed to work with ERA to meet its clean-up obligations
- There is no current plan for monitoring rehabilitation of the site beyond 2026
ERA operates the Ranger Uranium Mine, about 250 kilometres east of Darwin, which is excluded from the Kakadu National Park's boundaries.
The clean-up is now predicted to cost $808 million — $296 million more than ERA's initial $512-million estimate — according to an update released to the Australian Securities Exchange.
The increase is "largely due to" tailings transfer to Pit 3 of the mine, additional water treatment and infrastructure, revegetation, higher site services and owners' costs, and a "contingency" increase, the statement said.
ERA's rehabilitation costs have always been underestimated, according to associate professor Gavin Mudd, an environmental engineering researcher at RMIT University.
"It's a bigger, more-complex project than they've estimated in the past," he said. "It's probably getting closer to the true value."
Dr Mudd is also on a committee assisting the Federal Government with oversight of uranium mining in the Kakadu region.
One of the major concerns for ERA is negotiating the Top End wet season and any extra water treatment needed to properly rehabilitate the site.
"If we get to a situation where they get a big wet season and there's a lot more water on site than they have currently planned to treat, then there's a risk they might not be able to treat all of that water in time," Dr Mudd said.
So far, most of the rehabilitation money has been spent on a treatment plant for heavily contaminated water used in uranium ore processing, he said.
"The brine concentrator alone was something like $300 million to build and it's obviously very energy intensive and therefore expensive to operate."
According to the ASX statement, ERA's total cash resources are $413 million, including $75 million held in a Federal Government trust fund for the rehabilitation.
Mining giant Rio Tinto owns about 68 per cent of ERA and advised it would work with the company to ensure ERA's rehabilitation obligations were met "in full", according to the statement.
"ERA is reviewing all funding options," it said.
"ERA and Rio Tinto are engaged in active discussions on various options to manage this process, including possible funding solutions."
'No price is too high' to rehabilitate World Heritage area
Although mining has ceased at the site, ERA is still processing an existing limited stockpile of ore.
It would be an "absolute disaster scenario" if Rio Tinto walked away from its commitment to assist ERA, Dr Mudd said.
"There's real concern about [ERA's] ability to produce enough uranium between now and when they finish in two years' time and therefore fund rehab," he said.
"That's been a significant concern for a long time."
The Mirrar traditional owners of the region withdrew support for the mine's operation beyond ERA's January 2021 lease expiry and the company has an obligation to rehabilitate the site by 2026.
Gundjeihmi Aboriginal Corporation, which represents the Mirrar traditional owners, said the revised "practical and more fulsome" rehabilitation costing was welcome.
"No price is too high for this precious World Heritage area," Gundjeihmi's chief executive Justin O'Brien said.
"The reputational risk of not meeting their obligations at Kakadu is so great, so international, that we are confident that they will fully discharge their obligations.
"We wait with interest to see what those arrangements will be."
There is still uncertainty about how the site will be monitored beyond 2026, which Dr Mudd said should continue for decades beyond rehabilitation.
"At least 25 years, if not 50 years or more," he said.
"We need to be monitoring for a mighty long time — at the moment we're still not clear exactly how that monitoring is going to be funded."