Environmental groups say Energy Resources Australia’s financial losses, and uncertainty about its new mine, means full clean-up in national park not assured

This article is more than 5 years old

This article is more than 5 years old

Australian environmental groups have “major concerns” the company behind a uranium mine in Kakadu national park will not be able to afford the clean-up costs when it stops production.

After holding its annual general meeting in Darwin on Tuesday, Energy Resources Australia (ERA) confirmed funds earmarked for the clean-up were contingent on a proposed second mine going ahead.

The company is required to stop all mining production at the Jabiru site by 2021 and rehabilitate the area by 2026. It must also clean up the nearby Ranger 3 Deeps site, if its proposed mine there goes ahead.

The current Ranger mine, surrounded by the world heritage national park, was forced to stop production in late 2013 after a leach tank failed, spilling about 1m litres of radioactive and acidic slurry.

At Tuesday’s meeting ERA reported having spent $378m on rehabilitation and water management projects on the Ranger project area since 2012.

Shareholders at the meeting also heard the company had a net loss of $188m in the year to 2014, compared with a loss of $136m in 2013.

Environmental groups expressed concern that the successive financial losses, as well as a decreasing likelihood that the 3 Deeps mine will go ahead amid falling uranium prices since the Fukushima disaster, mean the company will not be able to pay for the full clean-up.

Lauren Mellor, spokeswoman for the environment centre, said “the writing was on the wall” for the 3 Deeps mine, pointing to the company delaying the commencement date earlier this year.

She called for ERA’s majority shareholder, Rio Tinto, to commit to rehabilitation costs should ERA be unable to pay.

“As Ranger approaches its end of mine life the stark question of which company bears responsibility for the costly, complex and technically challenging rehabilitation effort is increasingly being asked,” she said in a statement.

“Rio Tinto and ERA are playing a game of corporate convenience and the stakes are very high as the miners are required by law to bring the former mineral lease to a standard whereby it can be incorporated into the surrounding Kakadu national park.”

Dave Sweeney, spokesman for the Australian Conservation Foundation, told Guardian Australia ERA “shouldn’t be going deeper at R3D when they’ve made no commitment to clean up their mess, and the window for mineral mining approval expires in 2021”.

“We believe there is no market reason or social licence to advance R3D at this time,” he said.

ERA’s chief executive, Andrea Sutton, told Guardian Australia the company had already done “quite extensive rehabilitation work over the last couple of years” and has approximately $512m in provisional funds for the clean-up.

“That provision is obviously an accounting requirement to ensure we can account for the work that needs to be done,” she said, adding the figure was based on estimates of the cost in “current dollars”.

However, Sutton confirmed the cost of rehabilitation relies on the “current business plan”, which includes the proposed 3 Deeps mine.

Sutton said that should the new mine not go into production, the company “may require an additional source of funding, but we would need to consider that at the time”.

Any suggestion that Rio Tinto would be the additional source were a matter for Rio Tinto and currently hypothetical.

ERA is preparing a supplementary environmental impact statement (EIS) on the 3 Deeps mine. A draft EIS was criticised by environmental advocates for not containing sufficient information for the public to reasonably comment on it as several details were unknown ahead of a feasibility study’s completion. ERA rejected the criticism.

Media were not allowed to attend Tuesday’s meeting, despite earlier indications to the contrary. In speeches later released online Sutton and the chair of ERA spoke of improvements in safety at the site. The company was “confident” such an event as the leach tank spill would not happen again.