Shares in Energy Resources of Australia (ASX:ERA) dived almost 21% Thursday after a local indigenous community rejected the miner’s plans to extend the company’s Ranger uranium mine permit.
ERA’s lease, which is set to expire in 2021, is located on the traditional lands of the Mirarr people, and their support (or rather lack of) is considered a significant part of the company’s licence to operate within the Kakadu National Park.
The miner, which spent most of last week fighting a fire at the mine lease, had hoped to extend the dates so it could develop the Ranger 3 Deeps underground deposit. But ERA unveiled Thursday that the Gundjeihmi Aboriginal Corporation, which acts for the Mirarr traditional owners, has formally told the company its planned extension is not welcome by the community.
In June, parent company Rio Tinto (LON:RIO) said t would not support further mining in the area and made an offer of a conditional credit facility of $300 million to make up an expected shortfall in ERA’s funds for rehabilitation and managed exit from Kakadu. The move reflected growing concerns that the operator’s significant financial losses would compromise clean-up efforts.
The company said it would undertake a review of its business in light of the decision, and was assessing whether it will have to write down the value of its assets.