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The Australian government has intervened to block a renewed attempt to mine under Kakadu National Park in the country’s Northern Territory, all but ending a decades-long dispute over one of the world’s largest untapped deposits of high-grade uranium.
Energy Resources of Australia, a company majority-owned by Rio Tinto, had applied to renew a licence permitting uranium mining at a site called Jabiluka, triggering an outcry from the local Mirarr indigenous community. Members virulently opposed any prospect of mining there since an original development plan was stopped in the 1990s after a huge public protest.
But a booming uranium price and a public debate about whether Australia should adopt nuclear power for the first time has refocused attention on Jabiluka. Minority investors in ERA, frustrated at Rio Tinto’s failure to push for development of the site, have in recent weeks called for the licence to be extended and for mining to start.
However, the Northern Territory government said on Friday it would not renew the lease for an additional 10 years and would deem the site to be “reserved land”, preventing other mining companies from trying to develop it. It said it made the decision on the advice of Canberra.
ERA was put into a trading halt and now faces an uncertain future. Its value has collapsed since Ranger, another uranium mine close to Jabiluka, stopped producing. The cost of repairing that site has ballooned to more than A$2bn ($1.3bn) in the past year. ERA is due to run out of funds by the end of the year and needs to raise capital, but has no other significant assets with the Jabiluka licence set to expire.
That raises the prospect of the Australian government having to foot the bill for a rehabilitation of Ranger if ERA collapses. One person with direct knowledge of the situation said the government has been monitoring the situation closely.
ERA said it was disappointed with the licence decision and would consider its next steps, which could include an appeal. In contrast, Rio Tinto said it was “pleased” that the wishes of the Mirarr people had been respected.
Minority investors had stepped up pressure in recent weeks, arguing that Jabiluka could be mined with minimal impact to the environment. Jock Packer, an investment manager at Packer & Co, which has a 9.3 per cent stake in ERA, told the Financial Times: “Jabiluka could be Australia’s biggest contributor to the decarbonisation of the planet and help the US and other western countries diversify from their reliance on Kazakhstan and Russia.”
Yet those arguments were dismissed as “madness” by the Mirarr, who said Kakadu remained one of Australia’s most important World Heritage Sites and that the traditional owners would never consent to it being mined.
Speaking after the licence was not renewed, Packer said the decision was “devastating for all stakeholders”, despite Rio’s statement, as a huge opportunity for the region had been passed up.
Minority investors, who have invested tens of millions of dollars into ERA on the basis that the licence would be renewed, have also accused Rio Tinto — which owns 86 per cent of ERA — of working against their interests, and of hypocrisy, for mining iron ore out of Western Australian sites located near national parks but not at Kakadu.
In 2020 Rio Tinto destroyed indigenous rock shelters in the Juukan Gorge in the Pilbara in Western Australia, which cost the then-chief executive his job. It has since refused to entertain any notion that it would ever mine Jabiluka without the support of the traditional owners.
Uranium mining has been a particular bright spot on the Australian markets with developers Boss Energy, Deep Yellow and Bannerman Energy all booming in value over the past year. Paladin Energy, an Australia-listed miner, proposed a takeover of Canadian rival Fission Uranium last month that would value the business at more than A$5bn.
In contrast, ERA’s value has collapsed from more than A$3 a share — in 2010 when Ranger was still producing — to 3.7c this year, much to the fury of the minority investors.
The Mirarr’s right of veto that was attached to the ERA licence will disappear, meaning there remains a risk that a future government could revive plans to mine the site given the value of the uranium.
Dave Sweeney, a campaigner with the Australian Conservation Foundation, said the rejection of the licence renewal would finally end a multi-decade struggle to rule out uranium mining in Kakadu after the deep scars left by Ranger.
Sweeney argued that the domestic and international outrage to any future move to develop Jabiluka would dwarf that seen in the 1990s. “We would see a powerful response that would pull strings to trip over any Gulliver trying to mine Jabiluka,” he said.
