By Ed Ballard
LONDON-Rio Tinto PLC said on Thursday it could take a $300
million charge after Energy Resources of Australia Ltd., a uranium
producer majority-owned by the Anglo-Australian mining giant,
shelved a plan to dig a new underground mine.
ERA, which is 68% owned by Rio Tinto, decided it would not
proceed with a final feasibility study for the Ranger 3 Deeps
project in Australia's Northern Territory because of "the current
operating environment," Rio Tinto said. It cited the need for
"rehabilitation work" at the Ranger mine site, which is surrounded
by a national park.
"After careful consideration, Rio Tinto has determined that it
does not support any further study or the future development of
Ranger 3 Deeps due to the project's economic challenges," it said
in a statement.
"Rio Tinto is assessing a potential noncash impairment charge of
approximately $300 million...relating to its shareholding in ERA,"
the company added.
ERA's production of uranium oxide took a hit in 2014 after a
radioactive leak disrupted work at the Ranger operation.
Rio Tinto also said it is working towards arranging a credit
facility to help ERA pay for clean-up work at the Ranger site if
the subsidiary's own cash reserves don't cover it.
Write to Ed Ballard at ed.Ballard@wsj.com
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