The new head of RIO’s Australian operations, Kellie Parker, has...

The new head of RIO’s Australian operations, Kellie Parker, has had her feather ruffled, along with the RIO board.

Uranium miner, ERA is 86% owned by RIO. Back in November, 2019, at RIOs request, ERA made a contributing issue of shares (6.31:1 @ 15c). It was at the request of RIO who were seeking funding of the Ranger mine rehabilitation, and, also hoping to increase their holding of 68% passed 90%, so they could get compulsory acquisition @ 15c/share. However, they only got an increase to 86%.

There are currently some minor shareholders (e.g. Willy Packer & Co. and Zentree Investments) that would like to see Jabiluka mined. As the costs to rehabilitate the Ranger mine have blown out RIO has asked ERA to make yet another contributing share issue, hoping to get them past 90%. They have suggested to ERA that this issue should be around 2c/share as ERA doesn’t have any operating assets.

So, at the request of their independent chairman, PeterMansell, ERA commissioned an independent expert’s report, to determine whatshould be fair value for the current number of shares on issue. Grant Thorntoncame up with a value of between $0.159 and $0.243 per share.

Under ERA announcements, see” Independent Expert's Report Released”dated 26 September 2022.

What has riled our Kellie Parker and the RIO board is that the report puts a value on the uranium assets at Jabiluka (137,100 tonnes of relatively rich uranium ore) and states that the Mirarr people could possibly allow mining there in the future. Like Ranger, the Jabiluka lease is adjacent to, but not in, Kakadu national park. The Jabiluka mininglease is due to expire on 1 July 2024. If ERA doesn’t renew the lease then someone else could bid for same. The existing agreement to not mine Jabiluka is between ERA and the Mirarr people. RIO is in a catch 22 situation.

1. Kellie Parker was put in her position by RIO to develop better relations with the aboriginal communities following the Juukan gorge debacle.

2. RIO (through ERA) will be forced to renew the Jabiluka lease by July 2024 if it doesn’t want someone else to get their hands on same. How will they explain their application to renew to the Mirarr people?

RIO has been hoping to getfull ownership of ERA, and sitting on the assets indefinitely, without havingto pay much of a price.

ERA is doing a very good job with the Ranger site rehabilitation. The current plan is to incorporate the site into Kakadu national park in 2028.

In hindsight RIO should have invested more money earlier to get the job done before 2024.

Funny thing is that it has been reported that the the area was once referred to as “sickness country”. One might be forgiven in thinking, that with proper rehabilitation, removal of uranium may have been a good thing for the Mirarr people, let alone the economic benefits for them. Jabiru is now a pretty and important tourist town for the Northern Territory.

One could be forgiven for thinking that the RIO board are thinking “that if the Mirarr people like the Ranger rehabilitation, down the track, they might let RIO mine Jabiluka underground”.

The ERA, Grant Thornton report couldn’t have come at a worse time for RIO.

RIO should have bought ERA out years ago so they had full control. They greedily wanted the minority shareholders to contribute.

However, there’s a bit more to this story than meets the eye!

Up until the contributing issue of November 2019, RIO owned 68% of ERA. ERA top management have always been direct RIO employees, rather than ERA employees. Some minority shareholders have historically claimed that RIO had been monopolising the profits of ERA, over many years. The claim was that ERA had used RIO as their consultants, and that their fees were very exorbitant.

ERA stopped paying a dividend to shareholders after March, 2010, even though they continued to make good revenue from the sale of uranium until the closure of Ranger.

From around 2004 to 2008, RIO’s Chris Salisbury was Chief Executive of ERA. He also served as Non-Executive Director of ERA from 2011 to 2013

Under theobligation of a new loan facility to ERA, due to mature around March 2023, RIOhas asked ERA to pay for another independent expert’s report that values the Jabiluka resource at no value. Then RIO has asked ERA to make another contributing issue at the mid range of that report’s valuation!

Under ERA announcements, see “ERA interim funding update andresignation of the independent directors of ERA” dated 6 October 2022.

RIO, seemingly,has or takes no ethical responsibility!