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Rio Tinto to fund uranium mine clean-up

The giant miner vowed to subscribe to US$221mln rights shares of subsidiary Energy Resources of Australia and will fully underwrite its US$326mln equity fundraising if no other entity does so

Rio Tinto plc - Rio Tinto to fund uranium mine clean-up
The mine is located within the huge Kakadu National Park in Australia

Rio Tinto plc’s (LON:RIO) shares ticked higher after the giant miner vowed to subscribe to US$221mln rights shares of subsidiary Energy Resources of Australia (ERA) to clean up a uranium mine.

The FTSE 100-listed firm also agreed to fully underwrite ERA’s US$326mln equity fundraising if no other entity does so.

READ: Rio Tinto to review future of world’s purest aluminium smelter amid “challenging” market

ERA, in which Rio owns a 68% stake, has been looking to raise funds for years in order to close and rehabilitate the uranium mine in the Ranger Project Area, in Australia's Northern Territory.

Last February, ERA completed a feasibility study which showed a “material” rise in costs to clean up the mine, scheduled to halt all operations by 2021 and finalise rehab works by 2026.

The project, located within the huge Kakadu National Park, has been the stage of over 200 environmental incidents between 1979 and 2003, according to Reuters reports.

“We have committed to supporting this offer with the objective of ensuring ERA is in a position to rehabilitate Ranger to a standard that will establish an environment similar to the adjacent Kakadu National Park,” said Bold Baatar, Rio Tinto’s group executive for energy & minerals.

Shares in Rio Tinto were up 2% in London to 4,178p on Friday morning.

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