BY JIM GREEN
Rio Tinto chief executive Leigh Clifford said on March 22 that the company was unlikely to proceed with development of the Jabiluka uranium mine on ground excised from the Kakadu National Park without a significant shift in community opinion and uranium markets.
"Development (of Jabiluka) is a matter for the ERA board ... but given (public and indigenous) opposition, and current market circumstances ... it would be hard for us to support a development in the short term", Clifford said in a March 22 address to the Securities Institute in Sydney.
Rio Tinto is a 68% stakeholder in Energy Resources of Australia (ERA), owner of the Jabiluka mining lease and partly constructed mine. ERA responded to Clifford's statements by asserting that the project would proceed.
On March 14, Clifford said that in addition to Rio Tinto's efforts to on-sell ERA, acquired last year during Rio Tinto's $3.5 billion takeover of ERA's parent company North Ltd, Rio Tinto was considering developing the mine itself.
Rio has received at least two offers for its stake in ERA, understood to be from fellow ERA shareholders Cogema of France and the Canadian-French group Cameco. Clifford said there were differences between Rio Tinto and potential buyers over an appropriate sale price, but that negotiations are continuing.
How seriously should Clifford's contradictory statements be taken? Some anti-nuclear campaigners believe that his March 14 assertion that Rio Tinto may itself develop and operate the mine was designed to encourage potential buyers to raise their bids. If so, the manoeuvre appears to have failed.
The March 22 statement that Rio Tinto is unlikely to pursue the project unless the political and commercial environment becomes more favourable is more difficult to interpret. Nevertheless, the sale of Rio Tinto would have to be the most likely outcome. Corporations such as Cogema would not be overly concerned about the low-market prices for uranium; they want long-term, secure uranium supplies because of their interests in nuclear power plants.
The unknown variable in the equation is public opposition. A campaign such as that which grew in 1998 — involving mass protests across the country as well as a blockade at the mine site which attracted several thousand protesters — would deter even the most bloody-minded corporation.