Rehabilitating Mirarr land: Uranium mining to end at Ranger?

Lauren Mellor

Ranger uranium mine operates within the bounds of the dual World Heritage listed Kakadu National Park in the Northern Territory. The mine was established through a no-consent lease on the traditional lands of the Mirarr people in the late 1970s. Ranger is the only operating asset of Energy Resources of Australia (ERA), a subsidiary 68% owned by multinational mining giant Rio Tinto.

The Ranger Uranium Environmental Inquiry was set up in 1973 to consider the prospect of uranium mining in the Alligator Rivers region and canvassed environmental and social impacts as well as the national interest and commercial considerations. The extensive evidence collected made it clear that the Mirarr did not wish to allow any uranium mining on their estates.

Regardless of the Mirarr's opposition, the Commonwealth accepted the Inquiry's advice that: "In the end, we form the conclusion that their opposition shall not be allowed to prevail."

The Aboriginal Land Rights Act (ALRA) excluded Ranger from the veto on mining that is a statutory option for all other ALRA landholders, and uranium mining at Ranger was given final legal approvals in January 1979 with production beginning in 1981.

Thirty years on no other mine in Australia today holds the status and notorious operating record of Ranger mine, surrounded by our largest and World Heritage listed national park. Kakadu is a site of significance for its rich cultural history. It is home to over 60,000 years of living Aboriginal culture and is host to a unique ecosystem sustaining species of flora and fauna found nowhere else.

Since the mine was imposed against their express opposition in the 1970s, Mirarr and the community at large have been given to understand that ERA is obligated to protect the environment according to Balanda (non-Aboriginal) law. Repeated assurances have been given by the Commonwealth's Supervising Scientist that environmental and health interests are protected by the Environmental Requirements of the Ranger Authorisation.

In reality the mine's record speaks for itself: 30 years of mining and over 200 recorded leaks, contamination incidents, industrial accidents and security breaches with the potential to adversely affect the environment demonstrate that ERA has failed to take care of country or to manage the health and safety of its workforce and local communities.

A series of recent developments could mean the nightmare may soon be over for this site of incredible cultural and environmental significance as ERA's plans for underground expansion have come to a grinding halt.

Ranger: operating on the edge

Mining at Ranger's open pit ceased over two years ago and production is currently sustained by processing stockpiles. All mining and mineral processing at the site must end in January 2021, to be followed by a mandated five-year rehabilitation whereby the Ranger Project Area must be repaired to a standard acceptable for inclusion into the surrounding Kakadu National Park.

In 2013 ERA announced its intention to seek approval to construct a new underground mine to access a uranium resource known as Ranger 3 Deeps within the footprint of the existing mine. ERA then began construction of an exploratory tunnel that would allow underground access to the deposit.

Mining the estimated 34,000 tonne Ranger 3 Deeps resource would delay and complicate current plans and timelines for rehabilitation of the original site by creating 10 million tonnes of long lived low-level radioactive tailings waste. (Use of the uranium in power reactors would produce 21,990 tonnes of depleted uranium waste and 3850 tonnes of high-level nuclear waste.)

The Ranger 3 Deeps underground mine proposal was ERA's only viable plan for continued mining at the site after Ranger's reserves had been exhausted, but on June 11 ERA shocked the ASX by announcing it would not proceed to the project's final feasibility stage due to 'uncertainty over the project's economics.'

Costs and corporate responsibility for rehabilitation

Critical to this decision was Rio Tinto's withdrawal of support for the proposed underground mine, saying in a statement it would not support any future mining at the site.

ERA's capacity − and Rio Tinto's commitment − to meet the site's rehabilitation requirements has been under a cloud since 2010 when ERA began posting successive pre-tax losses which now total $981 million. Following the decision to abandon further work on the Ranger 3 Deeps proposal, ERA has lost 73% of its share value.

A combination of depressed uranium prices in the wake of the Fukushima nuclear accident, global market oversupply and two forced temporary shut downs at Ranger due to mismanagement, including a major radioactive spill in December 2013, have left the company with less than $300 million operating cashflow. At present the Commonwealth holds just 10% of the rehabilitation bond or approximately $60 million in security and an undisclosed sum of cash bonds.

Combined, ERA's cash reserves and market value represent less than the cost of its unfunded rehabilitation liability, making any expansion project a significant financial risk.

In 2013 ERA's Chief Executive warned that the company may request a public bailout to secure rehabilitation funds if the mine was unable to return to profitability through the Ranger 3 Deeps project.

ERA's 2013 Annual Report said that "if the Ranger 3 Deeps mine is not developed, in the absence of any other successful development, ERA may require an additional source of funding to fund rehabilitation of the Ranger Project Area."

Until recent developments Rio Tinto, worth an estimated $100 billion, had attempted to publicly distance itself from responsibility for rehabilitation, deflecting criticism by downplaying corporate ties.

At its 2014 Annual Meeting, in response to questions by concerned shareholders, Rio Chief Executive Sam Walsh claimed: "ERA is a separate public company, and the board of directors will be responsible for the affairs of that company". Walsh then further distanced himself and tried to limit Rio Tinto's responsibility to address any financial liability by saying: "If Ranger 3 Deeps didn't proceed, there is an issue for the ERA board."

In the following 12 months Mirarr Traditional Owners and environmentalists maintained the pressure on Rio, calling for assurances that the costly and complex task of rehabilitation would not be compromised and the parent company would not walk away from its responsibilities in Kakadu.

Rio Tinto and ERA are firmly linked on Ranger through more than Rio's shareholding. A majority of ERA's Board members are directly linked with Rio Tinto and the parent company has final say over key investment and operational decisions at Ranger mine.

Rio sells ERA's product to world markets under its combined marketing authority and Rio directly appoints the ERA Chief Executive, with ERA reporting directly to Rio Tinto's Diamonds and Minerals Division.

While ERA remains a separate legal entity, it is Rio that holds the reins at Ranger. Kakadu is a threatened place of global cultural significance and unique biodiversity and Rio will be closely watched and judged on the adequacy of its commitment to the final rehabilitation of the Ranger Project Area.

With costs, time pressure and stakeholder concerns mounting, at Rio's 2015 London Annual Meeting Chair Jan du Plessis appeared to change tack, suggesting the multinational miner was concerned its reputation may be at stake over lack of commitment to rehabilitation at Ranger, saying:

"We absolutely appreciate the need to take care of that site and to make sure it is properly rehabilitated and that it is restored in the way that people would expect from this company. I can assure you today however that should the board of ERA should at any point call a rights issue to get further capital into the company, we will follow our rights as shareholders to put further capital into the company so that they can meet their obligations."

In June this year Rio also confirmed an offer to ERA of a "conditional credit facility" should existing or future cash reserves fail to cover the required rehabilitation effort. That condition is believed to be that no future options for mining at Ranger are considered, including abandoning the Ranger 3 Deeps proposal and negotiations with the Commonwealth over a potential mining lease extension.

At the time of writing it is not clear that ERA has accepted this condition, although the shock defection of half of ERA's Board members on June 11, including Chairman Peter McMahon and independent non-executive directors Helen Garnett and David Smith, believed to have been in support of a continuation of mining, appears to have made progress towards resolving any lingering internal tension over which option ERA would pursue.

The Mirarr have made clear that they would not support any continuation of mining at Ranger past the 2021 lease expiry. A statement released in June by the Gundjeihmi Aboriginal Corporation, representing the Mirarr, reads:

"As things stand today we will not support any extended term of mining at Ranger beyond 2021. We take this position because of our experience of 30 years of environmental and cultural impacts at Ranger and because in our talks with Rio Tinto and the Australian Government we have been given no guarantee that Ranger will be the last uranium mine in Kakadu. The Mirarr remain fundamentally opposed to Jabiluka's development. That opposition is intergenerational. We are concerned about the lack of adequate planning for Jabiluka's final rehabilitation and its incorporation into Kakadu."

So after 30 years of uncertainty the question is whether ERA will accept Rio Tinto's life-line in the form of a conditional credit facility, or will it be forced into bankruptcy and risk creating a long-term radioactive legacy to be managed by public funds in the heart of Australia's most recognised national park?

Ranger's mining legacy

As the sun sets on Australia's third mining boom, the uranium industry sinks into irrelevance against the backdrop of a rising renewable trade. As analysts weigh up the social, economic and environmental cost benefit of this latest resource rush, the closure and clean up of Ranger will be a test of our national ability to hold the extractives industry to account.

Without a publicly tested and fully costed rehabilitation plan and timeframe for closure, regional stakeholders are unable to meaningfully engage with the sometimes polarised cultural, scientific, regulatory and corporate views for the post-mining future of the Alligator Rivers region.

It is difficult to see how a best practice rehabilitation exercise could occur in a mere five and a half years between cessation of operations and relinquishment of the lease in 2026. The poor history of the Northern Territory's experimentation with uranium mining at both Rum Jungle and Nabarlek, where rehabilitation and containment efforts are still underway decades after mining ceased, does nothing for public confidence in a comprehensive clean up at Ranger.

The original Ranger Uranium Environmental Inquiry ruled that uranium mining at Ranger was in the national interest, yet few would argue today that the experience of imposed mining at Ranger has had a broad public benefit.

The experience of uranium mining at Ranger and the ongoing struggle to guarantee rehabilitation at the site raises many pointed questions about resource extraction in Australia and on recognised Aboriginal lands.

How can we ensure that rehabilitation is a legally binding, fully costed and planned phase of mining and not the inevitable public cost collateral?

How can resource development be effectively managed to alleviate poverty and not entrench the wealth disparity that leaves a handful with obscene profits and mining sacrifice zones and local communities with sickness?

But it is not just Ranger mine that urgently requires rehabilitation. The impacts and imposition of this hazardous form of mining on the entire Alligator Rivers region and particularly its Aboriginal population requires remediation by both the company and governments who have worked systemically over decades to ensure its exploitation.

Yvonne Margarula, Senior Mirarr Traditional Owner, summarised the experience of mining on Mirarr Country saying, "None of the promises last, but the problems always do."

As Australia's oldest and most contested uranium mine approaches its closure date there is an opportunity for forward-looking Territory and federal governments to act rationally, to accept the uranium industry's proven unviability and to firmly close the door on this, our most controversial contribution to what remains the world's most contaminating resource trade.

Before that, there is a mine-site and a region to be cleaned up and rehabilitated, land including Jabiluka returned to its rightful owners and included in the Kakadu National Park.

Lauren Mellor is the Nuclear Free Campaigner with the Environment Centre NT.

Published in Chain Reaction, national magazine of Friends of the Earth, Australia, edition #124, September 2015, www.foe.org.au/chain-reaction