(Alliance News) - Rio Tinto PLC on Tuesday said it will support Energy Resources of Australia Ltd's recently disclosed plans for an interim entitlement offer, which seeks to raise up to AUD369 million.
The Anglo-Australian mining and metals company said this is to address funding requirements for the Ranger rehabilitation project in Northern Territory, Australia to the end of the second quarter of 2024.
Rio Tinto said it will subscribe for its full entitlement under the IEO, which is a type of rights issue, for AUD319 million. It owns 86% of ERA's shares.
Funds raised will be used partly to repay a AUD100 million credit facility provided by Rio Tinto to assist ERA with its management of immediate liquidity issues.
Rio Tinto added funds from the IEO are not expected to generate any financial return and will be dedicated strictly to the Ranger project and repayment of the credit facility.
"We are committed to ensuring the critical rehabilitation of Ranger is completed to a standard that will establish an environment similar to the adjacent Kakadu National Park," said Kellie Parker, chief executive for Australia at Rio Tinto.
Rio Tinto also noted the Mirarr people's opposition to further uranium mining on their land. It said this was a relevant factor in Rio Tinto's recent decision to no longer report the Jabiluka deposit as a mineral resource.
It also recognises that the Mirarr people's continued involvement in and support of the Ranger project as "critical for its timely completion and success".
On Friday last week, Rio Tinto said it had entered into a deal with First Quantum Minerals Ltd to form a joint venture at the La Granja copper project in Peru, which it believes has the potential to be a "large, long-life operation". La Granja has a published indicated and inferred Mineral Resource of 4.32 billion tonnes at 0.5% copper, Rio Tinto said.
Shares in Rio Tinto were up 0.7% to 5,442.00 pence each in London on Tuesday morning.
By Greg Rosenvinge, Alliance News reporter
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