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Futures dropped for a fourth day in Singapore, to trade about 3% lower for the week.
Rio Tinto (ASX, LON, NYSE: RIO) will carry out the rehabilitation of the closed Ranger uranium mine in Australia’s Northern Territory amid major delays and spiralling costs weighing on the project.
The company’s majority owned uranium producer Energy Resources of Australia (ASX: ERA) halted activities at Ranger in 2021, after 40 years of operation. The initial goal was to finish the clean-up and restoration of the site by 2026, with an estimated cost of around A$800 million ($520m at today’s rates).
Following several delays and cost overruns, ERA warned investors in September that total expenses were now projected to “significantly surpass” A$2.2 billion ($1.43bn). It also said the program’s completion date would be postponed until after 2028.
The world’s second largest miner said the agreement reached with ERA will see it take over management of the rehabilitation program immediately, but noted that full transition was expected to take about three months.
“The ERA team has worked incredibly hard and made good progress rehabilitating Ranger,” CEO Brad Welsh said in the statement. “However, as the project moves into a new phase it will benefit from Rio Tinto’s global expertise in mine closure.”
Rio’s Australia head Kellie Parker noted that taking over Ranger’s management meant the company could “directly provide more closure and project delivery experience and know-how to this critical task.”
The mining giant said it would now focus on finalizing required studies and executing the necessary rehabilitation activities.
ERA, in which Rio Tinto holds an 86.3% stake, said that an updated timeline for the project will be disclosed when finalized at a later time.
