2012
Annual
Report
www.energyres.com.au
2012 Review
Strong safety
performance –
AIFR 0.52
Surrounding
environment
remains
protected
103
Indigenous
employees
Refer to page 19 for further detail
Refer to page 32 for further detail
Refer to page 37 for further detail
Finished
mining in
Pit 3 ahead
of schedule
$75 Million
in cumulative cost
savings as part
of ERA’s ongoing
Business Review
Brine Concentrator
and Ranger 3 Deeps
exploration decline
projects on schedule
and on budget
Refer to page 12 for further detail
Refer to page 11 for further detail
Refer to pages 17 & 18 for further detail
Record plant
performance
Produced 3,710 and
sold 3,223 tonnes of
uranium oxide
Successfully
completed 2.3 metre
lift to Tailings
Storage Facility
Refer to page 12 for further detail
Refer to pages 10 & 11 for further detail
Refer to page 13 for further detail
Executed
Ranger
Mining
Agreement
Won Australian
Road Safety
Award
Net loss after tax –
$219 million
Refer to page 40 for further detail
Refer to page 20 for further detail
Refer to page 10 for further detail
Energy Resources of Australia Ltd | Annual Report 2012
Front cover: Scott Miller, a local West Arnhem College student,
who undertook his school based apprenticeship with ERA, was
awarded the Northern Territory Board of Studies School-Based
Trainee High Commendation award in December 2012 (read
more about Scott’s story on page 39).
SALES REVENUE ($000)
2008 – 2012
768,297
651,381
572,283
496,359
DRUMMED PRODUCTION – TONNES (t)
2008 – 2012
5,339
5,240
3,973
3,710
369,629
2,641
08
09
10
11
12
08
09
10
11
12
NET PROFIT AFTER TAX ($m)
2008 – 2012
272.6
221.8
INDIGENOUS EMPLOYEES
2008 – 2012
PER CENT OF
WORKFORCE
98
83
81
103
99
47.0
08
09
10
11
12
-153.6
-218.8
17%
08
19%
09
15%
10
17%
11
17%
12
OPERATING CASH FLOW ($000)
2008 – 2012
ALL INJURY FREQUENCY RATE (per 200,000 hrs worked)
2008 – 2012
405,736
248,798
1.01
0.68
0.73
0.57
0.52
42,123
54,916
08
09
10
11
12
-3,324
08
09
10
11
12
Energy Resources of Australia Ltd | Annual Report 2012
1
Contents
Annual Report
2012 Review
Company Profile
Vision
2012 in Review
2013 Objectives
Chairman & Chief Executive’s Report
Financial Performance
Operations
Future Supply
Major Projects
Health and Safety
Regulatory Framework
Markets and Customers
Directors’ Outlook
Sustainable Development Report
Sustainable Development
2012 in Review
Environment
Employment
Community
Financial Report
Inside Cover
3
3
4
7
8
10
12
14
17
19
23
24
25
28
29
32
37
40
42
2
Energy Resources of Australia Ltd | Annual Report 2012
Company Profile
As Australia’s longest continually operating
uranium mine and one of the nation’s largest
uranium producers, Energy Resources of
Australia Ltd (ERA) has an excellent track record
of reliably supplying customers. Uranium has
been mined at Ranger for more than three
decades and it is one of only three mines in the
world to produce in excess of 100,000 tonnes
Conditions for operating at Ranger and Jabiluka are
set out in agreements entered into by the Northern
Land Council on behalf of the Traditional Owners under
the Commonwealth Aboriginal Land Rights (Northern
Territory) Act 1976.
Rio Tinto, a diversified resources group, owns 68.4 per
cent of ERA shares. The balance of the Company’s
shares are publicly held and traded on the Australian
Securities Exchange.
of uranium oxide (U3O8 ). Ranger commenced
Vision
commercial production of drummed uranium
oxide in 1981. Following completion of mining
in the operating Pit 3 in November 2012, ERA
has begun the transition from open cut mining
to underground exploration of the Ranger
3 Deeps mineral resource and potential
underground mining.
ERA sells its product to power utilities in Asia, Europe
and North America under strict international and
Australian Government safeguards and non-proliferation
conditions to ensure that Australian uranium is only
used for peaceful purposes. It maintains long term
relationships with customers and meets their energy
needs by providing consistent and reliable supply of
uranium oxide.
Located eight kilometres east of Jabiru and 260
kilometres east of Darwin, in Australia’s Northern
Territory, ERA’s Ranger mine lies within the 79 square
kilometre Ranger Project Area. The Jabiluka deposit also
held by ERA is 22 kilometres north of Ranger. This world-
class deposit is under long term care and maintenance
and, in accordance with the Jabiluka Long Term Care and
Maintenance Agreement, will not be developed by ERA
without the approval of the Mirarr Traditional Owners. The
Ranger Project Area and the Jabiluka lease are located
on Aboriginal land, and surrounded by, but separate from,
the World Heritage listed Kakadu National Park.
To maintain its position as a world-class uranium supplier
that contributes to environmental sustainability and is
trusted by the Traditional Owners, the community and
our people.
Code of Business Conduct
ERA strives to uphold the guiding principles set out in our
Code of Business Conduct, namely:
• the paramount importance of the safety and wellbeing
of our employees, contractors and the community;
• respecting the culture and aspirations of Indigenous
people in our community, particularly the Mirarr
Traditional Owners of the land on which ERA operates;
• caring for our surrounding environment through
exemplary management systems and commitment to
the principles of sustainable development;
• creation of value for our shareholders;
• building partnerships with our customers and aiming to
exceed their expectations; and
• strengthening the culture of compliance within the
regulatory framework in which ERA operates.
Acknowledgement
ERA acknowledges the Mirarr people, Traditional Owners
of the land on which ERA operates.
Energy Resources of Australia Ltd | Annual Report 2012
3
2012 in Review
Health and Safety
objective:
• Continue to work towards the goal of zero harm through
strong safety leadership with extensive employee and
contractor engagement.
HigHligHtS :
• Continued strong safety performance, with an All Injury
Frequency Rate (AIFR) of 0.52 and a low severity rate.
• Nominated for the Rio Tinto Chief Executive’s
Safety Awards.
• Won national recognition for outstanding achievement
in driver safety initiatives at the Australian Road
Safety Awards.
• Introduced a new Critical Control Monitoring Plan
Luke Masterson, Health and Safety Advisor, undertaking a safety audit on
scaffolding as part of ERA’s Critical Control Monitoring Plan.
(CCMP) designed to proactively manage significant risks.
Please refer to page 19 for more details.
cHallenge:
• Ensuring that contractors working at Ranger achieved
the high level of performance set and achieved by
ERA employees.
Environment
objectiveS:
• Ensure that ERA’s operations do not adversely impact on
the surrounding environment.
• Progress implementation of water management strategy.
• Progress the rehabilitation of Pit 1 and land application
areas.
HigHligHtS:
• The Supervising Scientist Division 2011-12 Annual Report
confirmed “that the environment has remained protected
through the period”.
• Safely completed a 2.3 metre lift of Tailings Storage
Facility and installation of a contingency pumping system
providing additional contingency storage in case of
heavy rainfall.
• Constructed a new one gigalitre (one billion litres) pond
water retention pond.
• Commenced rehabilitation of Pit 1 with the installation of
7,554 prefabricated vertical drains or ‘wicks’ to assist with
dewatering ahead of capping.
• Successfully implemented land application area
rehabilitation trials.
• Continued to progress key actions relating to a detailed
independent review of the ground water systems around
the Tailings Storage Facility, as commissioned by ERA
and the Gundjeihmi Aboriginal Corporation.
Cherie Gellert, Environmental Scientist standing by a Corymbia disjuncta
tree in the trial landform, which was planted in March 2009 and is now
8.1 metres high.
• Completed an independent review of surface water
monitoring and reporting systems in conjunction with the
Gundjeihmi Aboriginal Corporation.
• ERA and the Gundjeihmi Aboriginal Corporation
commenced discussions on plans for the progressive
rehabilitation of the water pond on the Jabiluka lease.
• Achieved significant progress on the Integrated Tailings,
Water and Closure Prefeasibility Study.
• $220 million Brine Concentrator project progressing well
and due for commissioning in Q3 2013.
cHallenge:
• Large inventory of pond water resulting from rainfall in the
2010-2011 and 2011-2012 wet seasons.
Please refer to page 32 for more details.
4
Energy Resources of Australia Ltd | Annual Report 2012
Operations
objectiveS:
• Ensure completion of mining in Pit 3 by end of 2012.
• Continue to progress initiatives to improve efficiency
in the operation resulting in lower unit costs per tonne
mined and per tonne milled.
• Completed mining in Pit 3 in late November – one month
ahead of schedule and commenced backfill.
• Excellent plant utilisation rates helped to offset the lower
production associated with processing lower grade
stockpiles in the first half of the year, and contributed to a
31 year record for mill throughput.
• Progress the Integrated Tailings, Water and Closure
• Refurbished and upgraded 60 ERA owned Jabiru houses.
Prefeasibility Study.
HigHligHtS:
• Achieved significant progress on the Integrated Tailings,
Water and Closure Prefeasibility Study.
• Produced a total of 3,710 tonnes of uranium oxide.
cHallenge:
• Pit 3 dewatered ahead of schedule allowing early
• Continue to drive unit costs down and safely progressing
commencement of mining operations after heavy rainfall.
backfill of Pit 3.
Please refer to page 12 for more details.
Communities and Government
objectiveS:
• Finalise and implement the Ranger Mining Agreement
with Mirarr Traditional Owners and set up the resulting
Relationship Committee.
• Ensure appropriate consultation with the Mirarr Traditional
Owners and stakeholders in regard to development of
ERA’s major projects.
HigHligHtS:
• Key terms of Ranger Mining Agreement finalised in 2012,
with the agreement executed in January 2013.
• Continued developing areas of agreement and mutual
interest with the Gundjeihmi Aboriginal Corporation on
regional development and the future of Jabiru.
• The Gundjeihmi Aboriginal Corporation became a formal
member of the Minesite Technical Committee.
• Collaborated with the Gundjeihmi Aboriginal Corporation
and Mirarr Traditional Owners around surface water,
closure criteria, housing and other areas of mutual
interest.
• Kept local stakeholders and community members
updated on ERA’s business activities through quarterly
community briefings in and around Jabiru.
People
objectiveS:
• Utilise innovative recruitment strategies to continue to
attract high calibre candidates.
• Better utilise the skills of our existing people.
• Provide competitive workplace benefits for all our
employees.
• Increase participation in development opportunities.
• Build our leadership capabilities through our leadership
coaching and mentoring programme.
• Expand upon Indigenous employment, training and
development opportunities and enhanced education
programmes.
Above: Leona Katzer, Communities Advisor, ERA, Sampson Henry, Alcohol
and Drug Officer, Jabiru Health Clinic, Andy Ralph, Homeland Officer,
West Arnhem College (Jabiru Campus), Brendan O’Brien, Health Lifestyle
Coordinator, Jabiru Health Clinic, and Kathy Bannister, Project Manager,
Children’s Ground meeting to discuss future plans.
• Commissioned an Economic Impact Assessment of
ERA’s operations in the region.
• The Administrator of the Northern Territory hosted
an event at Government House to recognise ERA’s
contribution to Indigenous employment, education and
community engagement.
cHallenge:
• Multi-party negotiations surrounding the finalisation of the
Mining Agreement and associated approval processes.
Please refer to page 40 for more details.
• 133 leaders participated in Indigenous Awareness
Training.
• Indigenous employment averaged 17 per cent of total
workforce in 2012.
• Sponsored five participants in the Indigenous Mine
Training Programme and currently have five Indigenous
trainees within the business.
• Co-winner of best Training Initiatives Programme
recognised at the Australia National Training Awards.
cHallenge:
• National skills shortage in the resources industry and the
high cost of living in the Northern Territory.
HigHligHtS:
Please refer to page 37 for more details.
• Implemented a new in-house recruitment model, which
addresses ERA’s specific business needs.
Energy Resources of Australia Ltd | Annual Report 2012
5
2012 in Review
Major Projects
objectiveS:
• Complete portal access and commence development of
Ranger 3 Deeps exploration decline.
• Initiate a Prefeasibility Study into the development of the
potential Ranger 3 Deeps underground mine and initiate
approval processes.
• Progress Brine Concentrator project to ensure major
items manufactured and delivered to site by the end of
the year.
HigHligHtS:
• Major projects are on schedule and on budget.
One of the large convoys of major components of the Brine Concentrator
arriving at Ranger mine in November.
• Strong safety performance achieving an AIFR of 0.46.
• Ranger 3 Deeps underground mine study:
• Brine Concentrator:
• Completed Brine Concentrator study and moved to
execution phase.
• Civil works completed and all major items for the
Brine Concentrator safely delivered to Ranger mine in
December 2012.
• Commissioning expected in Q3 2013.
• Ranger 3 Deeps exploration decline:
• Ground breaking occurred on 1 May 2012.
• Box cut successfully excavated and portal access
tunnel completed in October 2012.
• Backfill of the box cut completed by December 2012.
• As at 31 December 2012, development of the
exploration decline had progressed to approximately
57 metres.
Financial
objective:
• Achieve Business Review ongoing cost reduction targets
of $40 million in 2012, targeting $150 million by the end
of 2014.
HigHligHtS:
• Achieved a total of $55 million of cash savings in 2012,
compared to a target of $40 million set by the 2011
Business Review Programme.
• At the end of 2012, the total cumulative savings were
$75 million.
Exploration
objective:
• Progress an expanded exploration programme on Ranger
Project Area.
HigHligHtS:
• Conducted surface exploration drilling on the Ranger
Project Area.
• Significant intersection at Ranger 19.
• $57 million underground mine Prefeasibility Study
approved by the ERA Board.
• Prefeasibility Study progressing on schedule and
within budget.
• Referral for underground mine submitted to regulators
in January 2013.
cHallenge:
• Completion of backfill of the box cut for the Ranger 3
Deeps exploration decline project prior to commencement
of the 2012/2013 wet season.
• Delivery of major components of the Brine Concentrator
unit to Ranger mine prior to commencement of the
2012/2013 wet season.
Please refer to page 17 for more details.
cHallenge:
• Continued upward cost pressures in the resources
industry and the Northern Territory.
• Continuing to develop a cost efficiency culture without
compromising safety or operational success.
Please refer to page 10 for more details.
cHallenge:
• Due to the current market conditions, surface exploration
will be undertaken over a longer period of time than
initially communicated.
Please refer to page 14 for more details.
6
Energy Resources of Australia Ltd | Annual Report 2012
2013 Objectives
Area
Objective
Health and
Safety
• Continue to work towards the goal of zero harm through strong safety leadership with extensive
employee and contractor engagement.
• Implement Critical Control Management Plans to proactively manage ERA’s biggest safety risks.
environment
• Ensure ERA’s operations do not adversely impact the surrounding environment.
• Commence rehabilitation of the Jabiluka water management pond.
• Continue the progressive rehabilitation on the Ranger Project Area.
operations
• Backfill 20 million tonnes of rock from stockpiles into Pit 3.
• Produce 2,700 – 3,300 tonnes of uranium oxide.
• Complete Integrated Tailings, Water and Closure Prefeasibility Study in Q2 2013.
• Complete feasibility studies into the transfer of tailings from the Tailing Storage Facility to Pit 3 and
injection of brines (from the Brine Concentrator) into the base of Pit 3.
communities
and
government
• Establish a Relationship Committee in Q1 2013 with the Mirarr Traditional Owners and the
Gundjeihmi Aboriginal Corporation to ensure effective information sharing and dialogue.
• Develop a long term vision for Jabiru with Traditional Owners, governments and stakeholders in
Q4 2013.
• Continue stakeholder engagement in relation to the proposed Ranger 3 Deeps underground mine.
People
• Continue to grow Indigenous employment with a target of 20 per cent of ERA’s workforce.
• Continue to use innovative recruitment strategies to attract high calibre candidates.
• Manage the impacts and opportunities for employees as the operation changes from open cut
mining to potentially an underground mining operation.
Major Projects
• Safely construct and successfully commission the Brine Concentrator in Q3 2013.
• Progress the Ranger 3 Deeps exploration decline to approximately 1,400 metres.
• Commence underground close spaced drilling of Ranger 3 Deeps resource in Q2 2013.
• Progress the Ranger 3 Deeps mine Prefeasibility Study and prepare environmental assessments.
Financial
• Continue to progress the Business Review Programme towards a target of $150 million in
cumulative cash savings by the end of 2014.
• Work with suppliers to improve delivery of goods and services in a cost effective way.
• Continue to restructure the business to adapt to lower production levels and market conditions.
exploration
• Progress surface exploration programme on known prospective areas on the Ranger Project Area.
Energy Resources of Australia Ltd | Annual Report 2012
7
Chairman &
Chief Executive’s Report
Dr David Klingner,
Chairman
Mr Rob Atkinson,
Chief Executive
After more than 31 years
of operations and the
production of more than
100,000 tonnes of uranium
oxide, open pit mining at
Ranger mine ceased.
2013 will mark a new
beginning for the Company
with future production being
sourced from the existing
stockpiled material and a
potential Ranger 3 Deeps
underground mine.
Detailed investigation of the exciting
Ranger 3 Deeps deposit has
commenced. This deposit contains
a mineral resource of 34,000 tonnes
of uranium oxide (10 million tonnes
at an average grade of 0.34 per cent
U308). The Ranger 3 Deeps resource
is one of the world’s best undeveloped
uranium deposits, so significant that
ERA was awarded the Australian
Explorer of the Year in 2009.
The Ranger 3 Deeps exploration decline
project progressed on schedule, with the
box cut and access portal successfully
completed, and the excavation of the
decline tunnel reaching approximately 57
metres by 31 December 2012.
The results of the closed space
diamond drilling programme,
scheduled to commence in Q2
2013, will provide more details of
the potential of the Ranger 3 Deeps
mineralised zone.
ERA is currently conducting a
rigorous $57 million Prefeasibility
Study to evaluate and confirm the
scope of a possible Ranger 3 Deeps
underground mine.
Should the study indicate that an
underground mine is viable, ERA
will consult closely with the Gundjeihmi
Aboriginal Corporation and our other
major stakeholders and seek approval
through appropriate regulatory
channels.
ERA is in a strong position to make
the transition from open cut mining to
an underground operation, pending
the outcome of further studies and
obtaining all necessary stakeholder
and regulatory approvals.
Future potential underground
operations will have a lower impact
and smaller footprint on the landscape,
while maintaining a similar commercial
contribution to the local region.
Surface exploration continued on
the remainder of the Ranger Project
Area. This work has already led to a
significant intersection at Ranger 19.
The Jabiluka deposit is one of the
largest undeveloped uranium deposits
in the world. It remains under long
term care and maintenance and will not
be developed without the agreement of
the Mirarr Traditional Owners.
With the cessation of open pit mining
ERA can commence rehabilitation
of the Ranger Project Area with the
backfilling of the Ranger Pit 3. This
started in late 2012. This work will
eventually see the removal of the
Tailings Storage Facility and placement
of tailings in Pit 3. It will finally result
in a surface landform similar to the
surrounding environment.
This coming year will also see
ERA complete construction
and commissioning of the Brine
Concentrator. Water management
is the most significant operational
challenge faced by our Company and
the Brine Concentrator will provide
ERA with significant process water
treatment capacity, which will aid ERA’s
ability to manage impacts of future
heavy rainfall events.
While ERA focuses on bringing the
Ranger 3 Deeps project to fruition, the
ongoing operations will be based on
the efficient recovery and treatment
of the low grade ore stockpiles. The
production will be lower than previous
years and considerable effort has
been made to reduce costs. Since the
Business Review conducted in 2011,
cumulative savings of $75 million have
been achieved and ERA is targetting
cumulative savings of $150 million
by the end of 2014. This needs to
be an area of strong, continued and
sustained effort.
The completion of mining operations in
Pit 3 was an achievement that did not
come easily. The year started with a
very large inventory of water due to
the effect of the successive high
annual rainfalls experienced in recent
8
Energy Resources of Australia Ltd | Annual Report 2012
and accurate costing supporting a clear
pathway for progressive rehabilitation.
At the same time, ERA has optimised
production performance as we
switch to stockpile processing, and
simultaneously embarked on exciting
exploration of underground resources
and development opportunities.
Finally, we would like to sincerely thank
and congratulate all of the ERA team
and the contractors and suppliers who
support us, for their professionalism
and commitment throughout the year,
particularly in regards to working
safely. We look forward to meeting the
exciting challenges and opportunities
of 2013 and the years ahead.
Dr D Klingner
Chairman
Mr R Atkinson
Chief Executive
years. Particularly heavy rainfall
experienced in December 2011
forced the early termination of mining
operations in 2012.
surrounding environment as confirmed
by the Australian Government’s
Supervising Scientist Division, in its
2011/12 Annual Report.
Due to the strong performance of the
Water Management and Mining teams,
ERA achieved access to Pit 3 in May,
which resulted in the extraction of
final ore by the end of November, one
month earlier than planned.
Ore processing operations in 2012
were also notable with tonnage
throughput the highest ever achieved
in the history of ERA’s operations.
ERA made great strides in water
management, with the completion of a
final lift on the Tailings Storage Facility
and the construction of a pond water
retention storage facility, providing
ERA with further capability to manage
high rainfall.
We are pleased to say that ERA faced
these challenges safely, efficiently,
and successfully.
Of particular satisfaction in 2012
was the continuation of the very
good safety performance. ERA’s
Light Vehicle Safety initiative, which
seeks to reduce risks of driving
between Ranger and Darwin, won
the Australian Road Safety Founder’s
Award for Outstanding Achievement in
November. ERA was also a finalist in
the 2012 Rio Tinto Chief Executive’s
Safety Awards.
This year ERA introduced Critical
Control Management Plans to
systematically address the major
critical risks at ERA – process safety
and classified plant, crane and
electrical competency of contractors,
high voltage switching, road travel
between Darwin and Jabiru, working at
height and slope failure/rock fall.
Over its 31 year history, ERA has
maintained the protection of the
ERA also maintained high levels of
Indigenous employment, at 17 per
cent, and remains a significant
employer of Indigenous people at both
regional and Territory levels.
We are pleased with the constructive
progress made this year in building
stronger relations with the
Gundjeihmi Aboriginal Corporation
and would like to acknowledge the role
played by the Corporation as we jointly
pursue matters of common interest
and concern.
The Gundjeihmi Aboriginal
Corporation, Northern Land Council,
ERA and the Commonwealth
Government finalised the suite of
agreements governing operations at
the Ranger Project Area, including
a new Mining Agreement. These
agreements entitle the Mirarr to greater
participation in the benefits from mining
on their land, including an increased
share of royalties, and establish a
regional socio-economic trust and a
Relationship Committee with ERA
to promote information sharing
and collaboration.
ERA will continue to engage in
productive and meaningful discussions
with the Gundjeihmi Aboriginal
Corporation on behalf of the Mirarr
Traditional Owners, local communities
and governments to maintain Jabiru
as an important regional centre,
and to create cultural, social and
economic development opportunities
for Traditional Owners, our neighbours
and future generations.
In conclusion, ERA begins 2013
in a strong position, preparing to
commence large-scale treatment of
process water, with significant research
Energy Resources of Australia Ltd | Annual Report 2012
9
Financial Performance
Earnings
For the year ended 31 December 2012,
ERA’s net loss after tax was $219
million, compared with a net loss of
$154 million in 2011. The main impacts
on 2012 earnings were a non-cash
impairment charge of $68 million, lower
sales volumes and higher non-cash
costs (primarily depreciation). In 2011,
earnings were adversely affected by
a $99 million inventory adjustment
resulting from low grade stockpiled
material being reclassified from Ore
Reserves to Mineral Resources.
Revenue
During 2012, sales of uranium oxide
were 3,223 tonnes, down from
5,167 tonnes achieved in 2011.
Revenue from the sale of uranium
oxide in 2012 was $395 million (2011:
$649 million).
The average realised sale price of
uranium oxide achieved by ERA in
2012 was US$58.33 per pound (2011:
US$59.32). ERA’s sales strategy is to
ensure a reliable supply of uranium
oxide to customers, with a focus on
the long term price rather than the
spot price. Despite a weakening spot
market, the long term prices remained
relatively high.
Sales of uranium oxide are denominated
in US dollars. In 2012, the continued
strength of the Australian dollar had
a negative impact on ERA’s financial
results. ERA does not presently conduct
hedging activities to mitigate the impact
of movements in the Australian currency
relative to the US dollar.
Costs
Total costs were adversely impacted
by the requirement to purchase a total
of 501 tonnes of uranium oxide early in
the year to meet ERA’s sales schedule.
A further contribution was the significant
increase in depreciation and expenditure
on construction of the Ranger 3 Deeps
exploration decline. Savings were
realised in consumable costs as a result
of the plant continuing to be optimised
for lower mill head grades.
Depreciation increased significantly
during the year. The majority
of depreciation is calculated by
reference to Ranger Ore Reserves. A
reclassification of low grade stockpiles
from Ore Reserves to Mineral
Resources in August 2011 accelerated
the depreciation of a significant portion
of the company’s assets.
Employee benefit and contractor costs
remained in line with 2011. The increase
in costs associated with the construction
of the Ranger 3 Deeps exploration
decline was largely offset by reduced
use of consultants on studies and a
continued focus on minimising the use
of contractors.
Royalties increased despite lower sales
volumes as a result of the repayment of
uranium loans using Ranger material.
Repayment of uranium loans with
Ranger material attracts the payment of
royalties at the time of repayment.
Capital expenditure increased in 2012
to $161 million (2011: $97 million). The
majority of expenditure related to water
management initiatives, including a
Tailings Storage Facility wall lift and
construction of the Brine Concentrator.
Non-cash impairment
In light of the decline in the spot
and long term uranium price during
the second half of 2012 and its
consequential impact on the uranium
price outlook, coupled with the
continuing strength of the Australian
dollar and the increase in the asset base
(primarily related to water management
initiatives and rehabilitation) over the
last two years, the ERA Board has
recognised a non-cash impairment
charge of $68 million.
Dividends
ERA Directors have determined that
a dividend for 2012 will not be paid.
No dividend was paid in 2011.
Rehabilitation provision
In 2012, ERA commenced the
Integrated Tailings, Water and Closure
Prefeasibility Study to develop the
optimal rehabilitation plan for the
Ranger Project Area. This study has
confirmed the timing and technology
necessary to deliver a best practice
rehabilitation plan in line with the
current Ranger Authority. The provision
for rehabilitation represents the net
present cost at 31 December, based
on current disturbance, of the preferred
rehabilitation plan.
As a result of the work undertaken to
date as part of the Prefeasibility Study,
the rehabilitation cost estimate for the
Ranger Project Area has been revised
which has led to an increase of
$22 million in the rehabilitation provision.
ERA has reviewed the discount rate
used in determining the rehabilitation
provision and reduced the real discount
rate by 0.5 per cent to 2.5 per cent.
This is a result of reduced yields being
achieved on risk free investments. This
has resulted in the rehabilitation provision
being increased by a further $19 million.
Other recurring adjustments such as
the unwinding of discount, additional
disturbance due to operational activities
and rehabilitation work undertaken has
resulted in a net increase of $33 million
in the rehabilitation provision.
At 31 December 2012, the total
rehabilitation provision has been
increased to $640 million (2011:
$565 million).
10
Energy Resources of Australia Ltd | Annual Report 2012
Business Review
In 2011, ERA conducted a
comprehensive Business Review of
operations and strategy to ensure
that the Company is focused on value
enhancing activities. The Business
Review identified opportunities to
operate more efficiently and reduce
costs in line with expected future
production levels, as well as
anticipating and responding to
dynamic business conditions.
The initiative targets cumulative cost
savings of $150 million in operating costs
by end of 2014.
During 2012, the Business Review
achieved cost savings of $55 million,
$15 million higher than planned, taking
the total cumulative cost savings to
$75 million to date.
Savings were achieved through
introduction of an organisation wide
restructure, which included merging
management roles, reduction in the
use of contractors, reduction in support
and service roles, improvement
in procurement and maintenance
practices, optimisation of reagents and
consumables in the processing plant,
standardisation of rosters and greater
utilisation of existing accommodation.
Financial HigHligHtS
YeAR enD 31 DeceMbeR
Revenue from continuing operations ($ million)
Net profit/(loss) after tax ($ million)
2012
422.8
2011
667.8
(218.8)
(153.6)
Earnings before interest, tax, depreciation and amortisation ($ million)
(34.6)
Underlying earnings ($ million)
Total dividends (cents per share)
Uranium oxide production (tonnes drummed)
Uranium oxide sold (tonnes)
(150.7)
-
3,710
3,223
(94.8)
(54.2)
-
2,641
5,167
The financial statements have been prepared under the International Financial Reporting Standards. All figures are Australian dollars
unless otherwise noted.
Reconciliation oF PRoFit to undeRlying eaRningS
All AfteR tAx figuRes in $ Million
Profit (loss) for the year
Low grade inventory adjustment
Non-cash impairment charge
Underlying earnings
2012
(219)
-
68
(151)
2011
(154)
99
-
(54)
Final blast at Ranger mine’s Pit 3 in November 2012.
ERA will be a stockpile miner in 2013 and expects to
produce between 2,700 – 3,300 tonnes of uranium oxide.
Energy Resources of Australia Ltd | Annual Report 2012
11
Operations
2012 saw a return to more
average rainfall and an
early finish to the wet
season. ERA’s successful
dewatering strategy enabled
early mining access to
higher grade ore at the
bottom of Pit 3 from May.
ERA produced 3,710 tonnes
of uranium oxide in 2012.
ERA installed a third pumping system
in Pit 3 and expanded pond water
treatment capacity. This resulted in
four gigalitres of water being pumped
from Pit 3 and treated by the reverse
osmosis water treatment systems.
During the first half of the year, feed
for the mill was sourced from lower
grade stockpiled ore. Once Pit 3 was
dewatered and access to the high
grade ore restored, milling operations
shifted to processing the higher
grade ore.
High plant utilisation rates helped to
offset the lower production associated
with processing lower grade stockpiles
in the first half of the year, and
contributed to ERA achieving a 31 year
record for mill throughput.
In addition, overall plant efficiency and
optimised mine sequencing delivered
a 20 per cent reduction in the cost per
milled tonne of material. This pleasing
result was achieved in the face of tight
operating conditions at the bottom of
Pit 3, including additional constraints
due to restrictions on blast sizes and
long haul distances.
Pit 3 completed
Due to a very strong operational
performance, Pit 3 reached the end
of its operational life in late November
ahead of schedule. Pit 3 is now
being backfilled with waste rock in
preparation for transfer of tailings from
the Tailings Storage Facility and the
storage of the brines from the Brine
Concentrator.
ERA purchased three new Caterpillar
D11 bulldozers to manage the
placement of 30 million tonnes of
rock backfill within Pit 3. Backfilling
operations are expected to take
between 18 to 24 months to complete.
At this juncture tailings will be
transferred to Pit 3 ahead of rock
capping and final rehabilitation by
2026. The final stage in rehabilitation
of Pit 3 will draw on the learnings from
ERA’s trial landform project and other
progressive rehabilitation projects
(see page 34).
Plant performance
The high levels of plant performance
achieved in 2011 following the
recommencement of processing
operations were exceeded in 2012.
Ore treated from the main mills and
the laterite plant for the year was
2.6 million tonnes (2011: 1.6 million
tonnes). The 2.6 million tonnes
comprised 2.4 million tonnes treated
by the main mill and 243,000 tonnes
treated by the laterite plant. This
excellent combined result exceeds the
previous highest throughput record
of 2.4 million tonnes set in 2010. In
addition, the individual 2012 results for
the main mill and the laterite plant are
also all-time records.
The mill throughput performance was
primarily due to high plant utilisation
Open cut mining concluded after 31 years of operation. Backfilling of Pit 3 has now commenced as part of
Ranger mine’s progressive rehabilitation programme.
12
Energy Resources of Australia Ltd | Annual Report 2012
rates, which also set a new 31 year
record at 90 per cent, exceeding the
previous best of 87 per cent set
in 2010.
Retention Pond 2 via a two-way pumping
transfer system. This provides ERA
with flexibility and greater pond water
management options.
Recovery and extraction rates (87 per
cent and 91 per cent respectively)
were lower than planned due principally
to higher soluble loss, while mill rates
of 295 tonnes per hour exceeded
planned performance.
Average mill head grade was 0.17 per
cent (2011: 0.18). The requirement to
process lower grade stockpiles in the first
half of the year as Pit 3 was dewatered
was partially offset by access to higher
grade material in the second half of
the year.
Tailings Storage Facility
wall lift
Increasing the capacity of the Tailings
Storage Facility (TSF) until Pit 3 is
ready to receive tailings in 2015, was
a critical component of ERA’s Water
Management Strategy.
During 2012, ERA completed a
$25 million project to raise the
embankment of the TSF by 2.3 metres.
The project was completed on schedule
and budget and without injury.
Construction of the contingency
pumping system from the TSF to Pit 3
was completed in December with final
commissioning in Q1 2013. Coupled
to existing infrastructure this system
will provide ERA with a total capacity
to transfer 200 megalitres per day of
process water from the TSF to Pit 3.
The completion of the 2.3 metre wall
lift allowed ERA to fulfil regulatory
and stakeholder requirements for the
establishment of a new wet season
maximum operating level (MOL). The
new MOL has now been approved by all
stakeholders and regulators.
Retention Pond 6
Additional water storage and
management capacity has been
delivered through the completion of a
new retention pond. Retention Pond 6
has a capacity of one gigalitre, is double-
lined with a high density polyethylene
liner, and connects to the existing
Pond water is surface run-off water that
has come into contact with mineralised
materials such as low grade ore
stockpiles and Pit 3 and is managed
according to quality. Pond water is
treated to high standards by ERA’s micro
filtration reverse osmosis treatment
system prior to controlled release via
constructed wetland or irrigation.
The Jabiru Airport is used by ERA for fly-
in, fly-out operations and by third parties.
The airport is of critical importance to
the local region and Kakadu National
Park, particularly for medical emergency
evacuation flights. Upgraded lighting
supports medical evacuations occurring
during night time.
In 2012, a simulated emergency training
exercise was staged at the upgraded
airport involving ERA and local fire,
police, ambulance and other emergency
service organisations.
Jabiru Airport
Jabiru housing
The Jabiru Airport provides a critical
regional air transport service for
mining operations, tourism, agricultural
business, emergency services and local
communities. The airport is located on
the Ranger Project Area.
Following a significant upgrade work
programme, the Jabiru Airport achieved
Civil Aviation Safety Authority registration
in February 2012. The work programme
involved upgrading security, access,
fencing, parking, lighting, airstrip
markings, buffer zone, and passenger
facilities.
ERA completed refurbishment and
upgrades to 60 houses owned by
ERA in Jabiru during 2012. The
refurbishment and upgrades included
painting, installation of new kitchens and
bathrooms, replacement and repair of
insect screens, use of standard fittings
and energy efficient lighting.
Of the 275 ERA houses in Jabiru, 211
are used to provide accommodation for
234 ERA workers. This compares with
the 486 workers and contractors who
are housed in ERA’s temporary and
permanent camp accommodation.
Trevor Beckman and Damien Reeves, part of the Infrastructure team who undertook upgrades to 60 ERA houses
in Jabiru
Energy Resources of Australia Ltd | Annual Report 2012
13
Future Supply
Evaluation and
exploration
In August 2011, ERA approved the
construction of an exploration decline
to conduct close spaced underground
drilling of the Ranger 3 Deeps
mineral resource which is estimated
to contain 34,000 tonnes of uranium
oxide. In 2012, ERA also approved a
Prefeasibility Study into a proposed
Ranger 3 Deeps underground mine.
These projects include up to 54,000
metres of close space diamond drilling
to further delineate and determine
the extent of the Ranger 3 Deeps
mineralised zone.
During 2012, ERA conducted surface
exploration drilling on the Ranger
Project Area. This exploration
targeted deep structurally complex
areas generated by analysis
and interpretations of geology,
geochemistry and geophysics to define
and determine potential additional
resources on the Ranger Project Area.
Due to the current market conditions,
surface exploration on the Ranger
Project Area will be undertaken over
a longer period of time than initially
communicated.
Jabiluka Reserves and
Resources
The Jabiluka project remains under
long term care and maintenance and,
in accordance with the Long Term
Care and Maintenance Agreement,
development by ERA will not proceed
without the approval of the Mirarr
Traditional Owners. The reserves
and resources at Jabiluka remained
unchanged during the year at
67,700 tonnes (reserves) and
73,940 tonnes (resources) of contained
uranium oxide.
Now that mining in Pit 3 is complete, ERA will mine low grade ore from stockpiles.
Ranger Project Area
Reserves and Resources
During 2012, Ore Reserves for the
Ranger Project Area decreased
from 13,484 tonnes of contained
uranium oxide to 9,675 tonnes as
a consequence of depletion by
processing and a minor pit re-design to
mitigate potential geotechnical risks.
There was also a favourable uranium
oxide variance of 1,107 tonnes due to
the actual ore mined exceeding the
geological model.
With the commencement of the backfill
of Pit 3 there was a decrease in
Ranger Mineral Resources (from
117,240 tonnes to 63,377 tonnes),
following the write down of in-situ low
grade mineralisation underlying and to
the east of Pit 3.
The table below sets out the
reconciliation of Ore Reserves:
tHe table below SetS out tHe Reconciliation oF RangeR oRe ReSeRveS:
RAngeR ReconciliAtion
contAineD u3o8 – tonnes
Ore Reserves as at 1 January 2012
Ore Reserves depleted by processing
Other adjustments
See Explanatory Notes
ore Reserves as at 31 December 2012
exPlanatoRy noteS
Pit redesign to mitigate geotechnical risks
Favourable reconciliation to actual ore mined
net other Adjustments
13,484
(4,369)
560
9,675
(547)
1,107
560
14
Energy Resources of Australia Ltd | Annual Report 2012
Energy Resources of Australia Ltd | Annual Report 2012
15
ERA 2012 Ore Reserves & Mineral ResourcesCUT-OFF GRADE –IN SITU ORE 0.08% U3O8STOCKPILE ORE 0.08% U3O8CUT-OFF GRADE –IN SITU ORE 0.08% U3O8STOCKPILE ORE 0.06% U3O8 AS AT 31 DECEmbER 2012AS AT 31 DECEmbER 2011 ORE (mt)% U3O8t U3O8ORE (mt)% U3O8t U3O8RANGER ORE RESERvESCurrent Stockpiles7.340.1329,6755.780.126,955Ranger No. 3 Pit In situ Proved---2.690.225,973Probable---0.670.08557Sub-total Proved and Probable Reserves7.340.1329,6753.360.196,530Total Ranger No. 3 Stockpiles, Proved and Probable Reserves7.340.1329,6759.140.1513,484 CUT-OFF GRADE –UNDERGROUND IN SITU RESOURCE 0.15% U3O8STOCKPILE ORE 0.02% U3O8CUT-OFF GRADE –OPEN PIT IN SITU RESOURCE 0.02% U3O8UNDERGROUND IN SITU RESOURCE 0.15% U3O8STOCKPILE ORE 0.02% U3O8 AS AT 31 DECEmbER 2012AS AT 31 DECEmbER 2011RANGER mINERAL RESOURCESIn Addition To The Above Ore ReserveCurrent Mineralised Stockpiles69.490.0430,08064.110.0427,710In situ resource Measured---21.020.1019,990 Indicated9.490.3330,82052.880.1261,830Sub-total Measured and Indicated Resources78.980.0660,900138.010.08109,530Inferred Resources0.650.382,4776.180.127,710Total Resources79.620.0863,377 144.190.08117,240 Future Supply
16
Energy Resources of Australia Ltd | Annual Report 2012
As At 31 December 2012As At 31 December 2011cUt-OFF GrADe0.20% U3O8cUt-OFF GrADe0.20% U3O8 Ore (mt)% U3O8t U3O8Ore (mt)% U3O8t U3O8JAbilUkA Ore reserves Proved - - - - - - Probable13.800.4967,70013.800.4967,700Total Proved and Probable Reserves13.800.4967,70013.800.4967,700JAbilUkA minerAl resOUrces In Addition To The Above Ore ReserveMeasured0.240.481,1400.240.481,140Indicated4.300.3615,3304.300.3615,300Sub-total Measured and Indicated4.540.3616,4404.540.3616,440Inferred Resources10.900.5357,50010.900.5357,500total resources15.44 0.48 73,940 15.44 0.48 73,940 Note: Rounding differences may occur. As required by the Australian Securities Exchange, the above tables contain details of other mineralisation that has a reasonable prospect of being economically extracted in the future but which is not yet classified as Proven or Probable Reserves. This material is defined as Mineral Resources under the JORC Code. Estimates of such material are based largely on geological information with only preliminary consideration of mining, economic and other factors. While in the judgment of the Competent Person there are realistic expectations that all or part of the Mineral Resources will eventually become Proven or Probable Reserves, there is no guarantee that this will occur as the result depends on further technical and economic studies and prevailing economic conditions in the future.The information in this announcement that relates to Ranger and Jabiluka Mineral Resources or Ore Reserves is based on information compiled by Geologists Greg Rogers and Stephen Pevely (full time employees of Energy Resources of Australia Ltd) and Mining Engineers Reid Miller and John Murphy (full time employees of Energy Resources of Australia Ltd) who are all members of the Australasian Institute of Mining & Metallurgy. Greg Rogers, Stephen Pevely, Reid Miller and John Murphy have sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration, and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Greg Rogers, Stephen Pevely, Reid Miller and John Murphy consent to the inclusion in this announcement of the matters based on their information in the form and context in which it appears. Major Projects
As ERA makes the transition
from open cut mining to
underground exploration,
two major projects are
transforming ERA’s
operations.
Ranger 3 Deeps
exploration decline
ERA’s $120 million project to construct
an exploration decline to conduct
close spaced underground exploration
drilling and explore areas adjacent to
the Ranger 3 Deeps resource made
significant progress during 2012.
The Ranger 3 Deeps mineralised zone
contains an estimated 34,000 tonnes
of uranium oxide, and represents one
of the most significant recent uranium
discoveries world-wide.
ERA has engaged Macmahon
Underground Pty Ltd to construct
the 2,200 metre decline to a depth of
approximately 370 metres.
Construction of the decline began on
schedule in May 2012. The box cut and
portal access tunnel were successfully
completed in October 2012.
In November, excavation of the
decline tunnel commenced, while
backfilling of the box cut to cover the
portal access tunnel was completed
in early December. The completion of
backfilling of the box cut allowed decline
excavation works to proceed regardless
of surface weather conditions.
The six metre high and 5.5 metre wide
tunnel is continuously ventilated with
fresh air pumped to the tunnel face.
At 31 December 2012, approximately
57 metres of the decline had been
completed.
The project is on schedule with close
space exploration drilling expected
to commence in Q2 2013 and will be
completed in mid-2014.
Ranger 3 Deeps
underground mine
Prefeasibility Study
In parallel with the construction of
the exploration decline, ERA began
a $57 million project to prepare a
Prefeasibility Study into the potential
development of a Ranger 3 Deeps
underground mine.
This Study will determine the
economic viability of the project,
optimise mining methods, and
confirm metallurgical performance
and production rates. Environmental
studies will also be conducted.
Regulatory approval for the
underground mine will be pursued in
accordance with the Northern Territory
Environmental Assessment Act and
the Commonwealth Environment
Protection and Biodiversity
Conservation Act 1999. The first step in
the environmental assessment process
was the submission of a “Notice of
Intent” and “Referral”, respectively
under these Acts, to the Northern
Territory Environmental Protection
Agency and the Commonwealth
Department of Sustainability,
Environment, Water, Population and
Communities in January 2013. These
assessment agencies will jointly
determine what level of environmental
assessment the proposed underground
mine requires.
ERA will conduct scientific studies
across a range of environmental
aspects such as air quality, radiation,
water management, visual amenity
and closure and others as part of the
Prefeasibility Study. ERA will also
consult further with the Gundjeihmi
Aboriginal Corporation as a component
of a broader social impact assessment.
The Ranger 3 Deeps exploration decline project is on schedule with close space exploration drilling
expected to commence in Q2 2013.
Energy Resources of Australia Ltd | Annual Report 2012
17
Brine Concentrator
The ERA Board approved the
$220 million project in February 2012
after completion of a detailed
Feasibility Study.
Water Solutions and Technologies.
Components for the Brine Concentrator
were constructed in the USA,
Germany, China and Thailand, with
the major components delivered to the
Ranger site in December 2012.
Brine concentrators use thermal
energy to evaporate water, which
is subsequently condensed and
discharged as clean distilled water.
Assembly of the components began in
November and the Brine Concentrator
is expected to be commissioned and
fully operational in Q3 2013.
The Brine Concentrator units were
manufactured and supplied by
HPD, LLC, a subsidiary of Veolia
The Brine Concentrator has the
capacity to produce 1.83 gigalitres
of clean water per year through the
treatment of process water. Once
commissioned, it will treat process
water from the Tailings Storage Facility.
This proven technology is scientifically
and environmentally sound and will
provide ERA with effective treatment
means to reduce the process water
inventory and to manage the impacts
of future heavy rainfall events.
The Brine Concentrator project is on
budget and schedule.
The Brine Concentrator project is on schedule and on budget and is due for commissioning in Q3 2013.
18
Energy Resources of Australia Ltd | Annual Report 2012
Health and Safety
In 2012, ERA maintained
its excellent safety
performance established
in previous years that has
helped make the company
one of the safest mining
operations within the Rio
Tinto group.
ERA was nominated for the Rio Tinto
Chief Executive’s Safety Awards,
and won national recognition for
outstanding achievement in driver
safety initiatives at the Australian Road
Safety Awards.
In pursuit of ERA’s stated goal of
zero harm, the company adopts
a combination of clear goals,
accountabilities and support
mechanisms.
This includes encouraging a workplace
culture of shared and personal
responsibility and accountability
for safe behaviour, supported by
comprehensive systems, training and
support materials.
Safety leadership is integral to
the success of ERA’s approach
to safety and involves constant
engagement with leaders, employees
and contractors on safety issues,
awareness and training.
This safety leadership was a key for
planning and execution of major labour
intensive projects in 2012, including the
construction of the Brine Concentrator,
a 2.3 metre lift of the Tailings Storage
Facility, construction of a new retention
pond, construction of the Ranger 3
Deeps exploration decline box cut
and access portal, commencement
of the decline tunnel and successful
completion of Pit 3.
Injury Rates
ERA’s All Injury Frequency Rate (AIFR)
measures all reportable injuries – lost
time injuries, restricted work injuries
and medical treatment cases – per
200,000 hours worked. During 2012,
ERA bettered the excellent safety
performance of 2011, with an AIFR of
0.52 (2011: 0.57).
ERA’s Lost Time Injury Frequency Rate
(LTIFR) per 200,000 hours was 0.31
compared with 0.1 in 2011.
ALL INJURY FREQUENCY RATE (per 200,000 hrs worked)
2008 - 2012
1.01
0.68
0.73
0.57
0.52
08
09
10
11
12
There were five recordable medical
treatment injuries. There were three
Lost Time Injuries – a sprained wrist
from an employee slipping in a shower,
a strained shoulder from an employee
slipping on a step, and a broken wrist
from a drilling contractor using a break
out tool – and two Medical Treatment
Cases – a laceration to the shin
while stepping onto a drill rig and a
laceration to the hand. All employees
have made a full recovery and returned
to full duties.
The Major Projects team also delivered
a strong safety performance achieving
an AIFR of 0.46.
Audits
ERA completed the Rio Tinto
Performance Standards Audit, which
focused on safety, health, environment
and radiation monitoring performance.
This included assessment and
maintenance of certification of its
environmental management systems
to ISO 14001, and safety and health
management system to Australian
Standard AS4801.
ERA’s environmental management
systems includes the Company’s
water management, safety and
health management and radiation
management systems.
Critical Control Monitoring
Plan
ERA introduced a new Critical Control
Monitoring Plan (CCMP) designed to
address significant risks which could
result in serious injury or a fatality.
Building on the Rio Tinto Semi
Quantitative Risk Assessment
conducted in 2011, which identified
activities and processes which
present ERA’s biggest risks, the new
CCMP systematically documents
and addresses control measures to
manage these risks.
Energy Resources of Australia Ltd | Annual Report 2012
19
The CCMP focuses on the following
high risk areas:
• process safety and classified plant;
•
crane and electrical competency of
contractors;
• high voltage switching;
•
•
road travel between Darwin and
Jabiru;
scaffolding (working at heights);
and
• slope failure/rock fall.
For each risk, the CCMP defines
control measures to manage the risk
and sets out performance criteria for
assessing effectiveness of control
measures.
Part of the process of developing the
CCMP required senior leaders to be
directly involved in the field assessing
implementation and compliance with
the CCMP control measures.
Major projects and
specialist maintenance
tasks
Major projects and specialist
maintenance tasks undertaken during
2012 required additional contractors to
be brought on to site for specific short
term tasks, as well as ongoing activity.
To help ensure all contractors meet
ERA requirements for safety, training
and achieving compliance with
the CCMP controls, ERA uses the
FieldGlass contractor management
system.
FieldGlass provides rapid and accurate
monitoring of relevant skills and safety
training held by contractors brought
in for specific tasks. This ensures that
tickets for work and relevant safety
training are up to date and appropriate
for the work being performed.
ERA was awarded the Australian
Road Safety Founder’s Award for
Outstanding Achievement at the
Australian Road Safety Awards, in
Sydney in November. ERA was
chosen from more than 50 finalists
across categories recognising
innovation, programmes and results-
driven initiatives of companies, Local,
State and Territory government
departments and community
organisations from around the nation.
ERA also won the Corporate Fleet
Safety Award and was recognised for
its Light Vehicle Committee initiative,
which focuses on raising safe driving
behaviour among staff and contractors,
and promotes safe driving in the
broader Northern Territory community.
ERA identified the 260 kilometre drive
between the Ranger mine in Jabiru
and Darwin as one of the biggest risks
to its workers and contractors – larger
than any other task performed during
work operations.
ERA’s road safety initiatives include:
Shannon McRae, Communications Specialist,
who is a member of ERA’s Road Safety
Committee accepting the Corporate and
Australian Road Safety Awards from Russell
White, Australian Road Safety Foundation and
Michael Ridley Smith, National Manager, Product
Marketing & Pricing for Caltex Australia.
• A maximum speed limit of 110 kmph
for all vehicles travelling on ERA
business on the Arnhem Highway
(130kmph is the legal speed limit);
• Public safety interaction events on
the Arnhem Highway to promote
strategies to combat fatigue and
dehydration, sharing the road safely
with heavy vehicles and reinforcing
other positive driver behaviours;
• Strong links with transporters,
suppliers, contractors and the
community to help promote road
safety in the region; and
• Stringent safety standards in all
• The production and public
ERA driver safety –
outstanding achievement
ERA’s efforts to protect its people,
contractors, their families and other
road users through practical initiatives
to promote safer driving and road
use has been recognised by a peak
national road safety body.
vehicles used for company business;
• Positive communication with manager
and colleagues prior to travelling;
• Mandatory pre-start vehicle checks;
• Enforcing a mandatory rest
break at the half way point of the
260 kilometre commute between
Ranger mine and Darwin;
distribution of a road safety DVD
specific to the Arnhem highway,
available on ERA’s website
www.energyres.com.au.
20
Energy Resources of Australia Ltd | Annual Report 2012
Health and Safety
Radiation monitoring
ERA’s safety and health management
systems are certified to AS 4801 and
include a comprehensive radiation
management system.
The aim of the Ranger mine radiation
monitoring programme is to ensure
that ERA’s employees, members of
the public and the environment are
not exposed to unacceptable levels of
ionising radiation.
Radiation levels are monitored using
a variety of fixed location and mobile
personal systems.
Monitoring results are compared
to limits recommended by the
International Commission on
Radiological Protection (ICRP) for
uranium industry workers as adopted
into Australian legislation.
The ICRP sets two levels of radiation
exposure, other than from natural and
medical sources to distinguish between
two types of people: members of the
public and radiation workers.
Those radiation exposure limits (above
natural background and medical
exposures) are:
• Members of the public: 1 millisievert
(mSv) per year
• Radiation workers: 20 mSv per year
over five years with a maximum of
50 mSv in any one year.
ERA employees and contractors
whose occupational exposure to
radiation may exceed 5 mSv per
year are declared ‘designated’
workers and their exposure is more
stringently monitored.
Radiation results are subject to review
prior to being finalised.
Preliminary analysis of the doses
for 2012 has been performed and
it confirms that all occupational and
public radiation doses remain well
below the national and international
dose limits.
Average doses are in line with those
measured in previous years. The
maximum individual dose recorded
remains around a quarter of the annual
dose limit. The doses are in line with
the ICRP principles of Justification,
Optimisation and Limitation. The doses
to workers remain at the lower end of
the spectrum for uranium workers.
Doses are calculated using the
methodology required by the Code
of Practice on Radiation Protection
and Radioactive Waste Management
in Mining and Mineral Processing
and approved in ERA’s Authorisation
to Operate.
The total effective dose is the sum
of the dose from three exposure
pathways: external gamma
radiation, inhalation of radon decay
products, and inhalation of long lived
alpha activity.
Other potential pathways have been
assessed and were found to be
very low in comparison and do not
significantly affect the overall dose.
All radiation doses to workers at
Ranger are available for review
by the regulatory authorities in the
Northern Territory.
Andrew Calcott, Radiation Safety Advisor, undertaking a radiation check prior to the vehicle leaving Ranger mine.
Energy Resources of Australia Ltd | Annual Report 2012
21
Australian National
Radiation Dose Register
Following the amendment to the
Northern Territory Radiation Protection
Act on 2 July 2012, ERA was permitted
to provide occupational radiation dose
data for workers at Ranger mine to the
Australian Government’s Australian
National Radiation Dose Register
(ANRDR).
Dose data for 2010 has been uploaded
to the ANRDR and is available to all
workers. ERA also provides a copy of
personal dose records to all designated
workers in addition to the ability to
obtain them from the ANRDR.
The ANRDR was a commitment by the
Australian Government to strengthen
occupational health and safety
requirements for individuals working at
uranium mining and milling sites.
It was established to collect, store,
manage and distribute the radiation
doses records received by workers in
the course of their employment.
Results
ERA assures the highest possible
quality control on radiation doses and
does not finalise the doses until they
have been presented and reviewed by
the appropriate regulatory authorities.
The maximum and mean annual
radiation doses received by designated
workers and the maximum radiation
doses received by non-designated
workers during 2012 will be reported in
the 2012 Annual Radiation Protection
and Atmospheric Monitoring Report
that will be submitted to stakeholders
in March 2013 in accordance with the
Ranger Authorisation.
Accordingly, only preliminary data for
2012 is presented in this report.
The maximum and mean annual
radiation doses received by designated
and non-designated workers are
summarised in the table below.
The potential exposures of Jabiru
residents and surrounding communities
are also monitored. The contribution
from the Ranger mine remains very
low in comparison with both the
public dose limit and the natural
background radiation.
The natural background in Australia
is 2 – 3 mSv, but varies according
to location.
MaxiMuM and Mean Radiation doSeS FoR woRkeRS in 2012
Dose
Limit (mSv)
Maximum Dose (mSv)
Mean dose (mSv)
DesignAteD
non-DesignAteD
20
3.92
1.2
20
0.84
Not applicable
DESIGNATED WORKER MEAN ANNUAL RADIATION DOSE
40
30
20
10
5
0
AVERAGE RECOMMENDED ANNUAL LIMIT
2003
2004
2005
2006
2007
2008
2009
2010
2011
*
2012
ERA DESIGNATED WORKER MEAN ANNUAL DOSE
ANNUAL RADIATION DOSE (mSv)
2003 – 2012 *At the time of printing, data for Q4 2012 not finalised.
22
Energy Resources of Australia Ltd | Annual Report 2012
Regulatory Framework
Uranium mining in Australia
is extensively regulated by
Commonwealth and State or
Territory Governments.
The areas of uranium mining that
are regulated include exploration,
development, production, transport,
export, taxes and royalties, labour
standards, occupational health, waste
disposal, protection and rehabilitation
of the environment, mine reclamation,
mine safety, toxic and radioactive
substances and native title.
The mining and export of uranium
is currently permitted under strict
international agreements designed to
prevent nuclear proliferation.
Exports are subject to strict safeguards
and non-proliferation conditions to
ensure that Australian uranium is only
used for peaceful purposes.
Regulators, stakeholders
and committees
ERA’s uranium mining activities are
regulated through Commonwealth and
Northern Territory legislation. ERA’s
operations are closely supervised and
monitored by key statutory bodies
including:
• Northern Territory Department of
Mines and Energy;
• Australian Government’s
Supervising Scientist Division;
• Northern Land Council;
• Commonwealth Department of
Resources, Energy and Tourism;
• Alligator Rivers Region
Advisory Committee (including
non-government organisation
representatives); and
• Alligator Rivers Region
Technical Committee (including
non-government organisation
representatives).
The Ranger and Jabiluka Minesite
Technical Committees (MTCs) are
the key forums for consideration of
environmental matters relating to
Ranger and Jabiluka. In 2012, the
Gundjeihmi Aboriginal Corporation
gained formal membership of
the MTC.
The Alligator Rivers Region Advisory
Committee (ARRAC) provides a
formal forum for consultation on
matters relating to the effects of
uranium mining on the environment
in the region.
Committee members include
representatives of the Northern
Territory Government, the
Commonwealth Government, the
Northern Land Council, Aboriginal
associations, mining companies
(including ERA), West Arnhem Shire,
the Northern Territory Environment
Centre and other members who may
be appointed by the Commonwealth
Minister for the Environment.
Further information on ARRAC can be
obtained at http://www.environment.
gov.au/ssd/communication/committees/
arrac/index.html
The Alligator Rivers Region Technical
Committee (ARRTC) oversees the
nature and extent of research being
undertaken to protect and restore
the environment in the Alligator
Rivers region from any effects of
uranium mining.
The 14 ARRTC members include
seven independent scientists
nominated by the Federation
of Australian Scientists and
Technological Societies with the
remaining representatives being from
the Supervising Scientist Division,
Northern Territory Government, ERA,
Uranium Equities Ltd, Northern Land
Council, Parks Australia, and a non-
government environment organisation.
Further information on ARRTC can be
contained at: http://www.environment.
gov.au/ssd/communication/committees/
arrtc/index.html
Technical Officer Richard Lindner takes a sample from a Ranger Retention Pond as part of quality
testing. Jabiru raised, Richard progressed through ERA’s Indigenous traineeship programme to secure a
permanent position during 2012 in the Water Quality team.
Energy Resources of Australia Ltd | Annual Report 2012
23
Markets and Customers
price. The long term price declined in
the second half of 2012, and ended the
year at US$56.50.
ERA’s average delivered price in 2012
was significantly higher than the spot
price over the course of the year.
ERA’s strategy is to focus on long term
contracting using a variety of pricing
mechanisms so that the Company is
not overly dependent on the spot price.
In 2012, ERA successfully concluded
its first sale and test shipment to
Russia under the Australia-Russia
bilateral agreement signed in 2007.
ERA sells its product to
electric utilities in Asia,
Europe and North America
through an arrangement
with Rio Tinto Uranium,
which provides expertise
in global uranium sales
and marketing activities.
Australian exports of
uranium oxide are subject
to strict safeguards and
non-proliferation conditions
to ensure that Australian
uranium is only used for
peaceful purposes.
ERA produced 3,710 tonnes of
uranium oxide in 2012. ERA met
all sales commitments through
production and inventory management,
with approximately 501 tonnes of
material purchased on the spot
market (2,126 tonnes purchased in
2011). ERA has repaid the majority of
uranium loans taken out in 2010 and
2011 due to lower production levels of
that period.
As production from Ranger declines,
the Company’s long production history,
reputation and strong relationships with
a diverse global customer base create
a platform for continuity of supply if the
Ranger 3 Deeps underground mine
is developed.
After holding at US$50 or above for
the first half of the year, the spot price
fell dramatically in September-October,
losing 20 per cent of its value. This
fall-off in prices was mainly driven by
the presence of excess inventories
in the market since the accident at
Fukushima. By year-end the spot price
was $43.38 per pound U3O8. Demand
weakness also affected the long term
24
Energy Resources of Australia Ltd | Annual Report 2012
Directors’ Outlook
ERA’s future holds many
challenges and great
opportunities. Nuclear
power is the only low
carbon emitting generation
technology that delivers
large volumes of base
load power.
ERA believes that nuclear
power will still be an
important part of the
global energy mix for
decades to come.
Looking globally, nuclear power
remains a key element of world-wide
global energy supplies, with 436
reactors operable worldwide in 2012,
62 under construction and 167 planned
for operation by 2030.
However, the short term outlook for
the uranium market is challenging.
The slow return to service of Japan’s
nuclear plants – at present only two of
the country’s 54 units are operating –
has reduced near-term demand.
The general consensus is that while
public support for nuclear power in
Japan has waned in the wake of
Fukushima, ultimately the country has
little choice but to rely on nuclear for a
significant portion of its energy needs.
A temporary halt in new build
construction projects in China, as
Chinese nuclear safety regulators re-
examined safety standards, contributed
to the market weakness.
Ranger 3 Deeps exploration decline portal backfill underway in November 2012. The backfill of the box cut
was completed in December 2012.
By 2020, China is expected to have
approximately 60 GWe of installed
nuclear capacity, about the same as
France and not far behind the USA.
Once Japanese reactors re-start and
inventory is cleared from the market, it
is expected that a supply side shortage
will drive prices higher.
On the supply side, continued strong
production from Kazakhstan added
to the inventories as the largest-
producing country increased output
eight per cent year-on-year, despite
a $15 drop in spot prices. Outside of
Kazakhstan, production mainly held
steady, and it is clear that at current
price levels, some of the new mining
projects that were projected to enter
production in the coming years will
struggle to do so.
The longer term picture for uranium
prices is much brighter. Demand
will continue to increase as China
constructs an estimated 40 to 50 new
nuclear power plants this decade, and
new reactor construction continues in
South Korea, the USA, the United Arab
Emirates, France, Finland, Russia,
India and other countries.
With ERA analysing the significant
potential of the Ranger 3 Deeps
mineral resource, and investigating the
potential of an underground mine, the
timing of access to a new world-class,
high grade mineral resource is likely to
coincide with strengthening demand
and higher market prices.
Given the long lead times required to
plan and gain approvals for new mines,
ERA is likely to be in a strong position
to return to a lead role in providing
a reliable and competitive uranium
supply to the world’s nuclear utilities
should Ranger 3 Deeps become an
operating underground mine.
The significant long term value that
ERA can bring to the town of Jabiru,
the Northern Territory and ERA
shareholders is based on ERA’s
proven ability to manage safety,
environment and social risks, and to
sustainably develop Ranger’s world-
class resources in the years ahead.
By late 2012, approvals had resumed
for new generation three designs in
coastal areas. This should serve to
improve progress in 2013, as China is
expected to continue its rapid rate of
new nuclear build.
At the same time, new uranium
mines are for the most part located
in geological regions with higher
extraction and processing costs, thus
requiring higher market prices to
be economical.
Energy Resources of Australia Ltd | Annual Report 2012
25
26
Energy Resources of Australia Ltd | Sustainable Development Report 2012
Sustainable Development Report
Energy Resources of Australia Ltd | Sustainable Development Report 2012
27
Sustainable Development
Overview
ERA’s operations are located
in a highly sensitive area,
recognised internationally
for unique ecosystems and
biodiversity, significant
environmental and cultural
heritage values, and with
a long tradition of human
habitation.
Our product, uranium
oxide, plays a key role in
meeting global energy need
with very low greenhouse
gas emissions.
In meeting future demand for uranium
supply, ERA works towards safety
leadership, environmental protection
and strong and enduring relationships
with all stakeholders.
ERA’s capability and commitment to
protect the environment was confirmed
by the Australian Government’s
Supervising Scientist Division, which
conducts extensive monitoring and
research programmes and concluded
in its 2011-12 Annual Report, “that the
environment has remained protected
through the period”.
ERA will continue to engage with the
Mirarr Traditional Owners, with local
communities and with governments
to maintain Jabiru as an important
regional centre, and to create cultural,
social and economic development
opportunities for local people and
future generations.
The Mirarr
The Mirarr are Traditional Owners of
lands within the Kakadu region. Mirarr
country encompasses the Ranger
Project Area and the Jabiluka lease,
the town of Jabiru and parts of Kakadu
National Park, including the wetlands
of the Jabiluka billabong country
and the sandstone escarpment of
Mount Brockman.
In 1995, the Mirarr established the
Gundjeihmi Aboriginal Corporation,
an incorporated body, to assist
them to manage a balance between
sustainable development and
traditional practice on their land,
and to direct income from mining
royalties towards the establishment
and maintenance of outstation
infrastructure and essential services.
The Mirarr have successfully
claimed traditional country under the
Commonwealth Aboriginal Land Rights
(Northern Territory) Act 1976, and
therefore hold beneficial freehold title
to their country via the Kakadu and
Jabiluka Land Trusts.
ERA recognises that the support
of Traditional Owners is critically
important to future projects and
successful rehabilitation.
28
Energy Resources of Australia Ltd | Sustainable Development Report 2012
2012 in review
Result legend
YES
NO
PROGRESS
2012 tARget
2012 Result
Continue to work towards the
goal of zero harm
YES
• In 2012, five reportable incidents occurred compared to six in 2011.
• All Injury Frequency Rate (AIFR) was 0.52 (2011: 0.57).
Ensure that ERA’s operations
do not adversely impact on the
surrounding environment
Extend process water treatment
and management by completing
a Feasibility Study on the Brine
Concentrator and completing
a 2.3 metre lift of the Tailings
Storage Facility
Progress Brine Concentrator
project to ensure major items
delivered to site by the end of
the year
Progress the rehabilitation
strategies and field work,
with a focus on Pit 1 and land
application areas
Complete portal access and
commence development of
Ranger 3 Deeps exploration
decline
Initiate a Prefeasibility Study
into the development of the
potential Ranger 3 Deeps
underground mine and initiate
approval processes
Demonstrate enhanced
monitoring of surrounding
waterways
• Lost Time Injury Frequency Rate (LTIFR) per 200,000 hours was 0.31 (2011:
0.10). Injury severity rate: low.
• Developed Critical Control Management Plans to manage ERA’s biggest
safety risks.
• ERA awarded Australian Road Safety Awards for road safety initiatives.
YES
• The Supervising Scientist Division 2011-12 Annual Report confirmed “that the
environment has remained protected through the period”.
YES
• Successful dewatering of Pit 3.
• Completed a 2.3 metre lift on the Tailings Storage Facility.
• Constructed a new one gigalitre pond water retention pond.
• Completed the Brine Concentrator study and moved to implementation phase.
YES
• All major items for the Brine Concentrator delivered to Ranger mine
by December.
• Site works progressed significantly.
• Project is on budget and schedule to be constructed and commissioned in
Q3 2013.
YES
• 7,554 prefabricated vertical drains or ‘wicks’ were installed in Pit 1 to assist with
dewatering ahead of capping and rehabilitation.
• Rehabilitation trials successfully completed on the land application areas with
further trials scheduled for 2013.
YES
• Ground breaking occurred on 1 May 2012.
• Box cut successfully excavated and portal completed in October.
• Backfill of the box cut completed in early December.
• As at 31 December 2012 the exploration decline excavation had reached
approximately 57 metres.
YES
• $57 million Prefeasibility Study (PFS) approved by the ERA Board.
• PFS is progressing on schedule and within budget.
• Referral and Notice of Intent submitted to regulators in January 2013
YES
• Water quality data reported to regulators in weekly water quality reports.
• Continue to progress key actions of the ground water monitoring works
associated with Tailings Storage Facility Working Group.
• Commenced independent surface water study in conjunction with the
Gundjeihmi Aboriginal Corporation.
Energy Resources of Australia Ltd | Sustainable Development Report 2012
29
2012 in review
Result legend
YES
NO
PROGRESS
2012 tARget
2012 Result
Advance the ERA Climate
Change Management
programme for energy/
greenhouse gas reduction
Continue progressing initiatives
to improve efficiency in the
operation resulting in lower unit
costs per tonne mined and per
tonne milled
Ensure completion of mining in
Pit 3 by the end of 2012
Engage with land owners and
other stakeholders on regional
development and future of
Jabiru
Finalise and implement the
Mining Agreement with Mirarr
Traditional Owners and set
up the resulting Relationship
Committee
PROGRESS
• ERA completed the first Cycle of the Australian Government Energy Efficiency
Opportunity (EEO) programme.
• Since commencement in December 2008, ERA completed 12 EEO projects with
total annual energy savings of 39,865 GJ.
YES
• Record mill rates were achieved in the plant along with lower cost per tonne
due to improved utilisation, reduced consumable use and optimised use of
contractors.
YES
• Pit 3 was successfully dewatered in May with mining in Pit 3 safely completed
by the end of November.
PROGRESS
• Continued to develop areas of agreement and mutual interest with the
Gundjeihmi Aboriginal Corporation on regional development and the future
of Jabiru.
YES
• The Gundjeihmi Aboriginal Corporation, Northern Land Council, ERA and
the Commonwealth Government finalised the suite of agreements governing
operations at the Ranger Project Area, including a new Mining Agreement in
January 2013.
• The Gundjeihmi Aboriginal Corporation became members of the Minesite
Technical Committee.
• During the year improved collaboration occurred with the Gundjeihmi Aboriginal
Corporation and Mirarr Traditional Owners around surface water, closure
criteria, rehabilitation, housing and other areas of mutual interest.
Consult with land owners and
stakeholders on major projects
YES
• The Gundjeihmi Aboriginal Corporation, government and regulators have all
been fully briefed on the development of the Brine Concentrator project and the
Ranger 3 Deeps exploration decline.
Expand upon Indigenous
employment, training and
development opportunities
and enhanced educational
programmes
• This has involved ongoing consultation, site visits and formal updates provided
throughout the year.
• ERA kept local stakeholders and community members updated on business
activities through quarterly community briefings in and around Jabiru.
YES
• Indigenous employment on average during year was 103 which is 17 per cent of
total workforce. This is an increase of thirteen people compared to 2011 (90).
• Throughout 2012, ERA maintained in excess of 100 Indigenous employees.
• ERA sponsored five participants in the Indigenous Mine Training Programme
and currently has five Indigenous trainees within the business.
• ERA now has a Numeracy and Literacy Officer who works closely with
Indigenous employees most in need of support in the workplace.
• Winner of Best Training Initiatives Programme at the Australia National Training
Awards.
30
30
Energy Resources of Australia Ltd | Sustainable Development Report 2012
Result legend
YES
NO
PROGRESS
2012 tARget
2012 Result
Build our leadership capabilities
through our leadership
Coaching and Mentoring
programme
YES
• The Coaching and Mentoring programme has continued. Six staff have formally
completed their competency training in Mentoring.
• 133 leaders have been provided with training in Indigenous Awareness. This
programme enables leaders to have open discussions where experiences and
development opportunities can be shared.
Utilise innovative recruitment
strategies to attract high calibre
candidates
• ERA employees have participated in a variety of Rio Tinto learning and
development programmes that are offered to all Rio Tinto business units.
YES
• In late October, ERA and West Arnhem College (Education Department)
launched a joint recruitment campaign in Queensland, New South Wales,
Victoria and South Australia targeting “teachers and miners” that were interested
in moving to the Northern Territory for a lifestyle change. This innovative
campaign has attracted a large number of interested applicants and is an
example of what can be achieved with innovative and collaborative recruitment
campaigns.
Build upon educational
initiatives with West Arnhem
College
YES
• ERA facilitated eight separate school student and teacher tours of the Ranger
mine including all the teachers and teachers’ aides from the Gunbalanya
campus.
• Senior students combined media studies and learned video editing skills to
create short videos about their work experiences with ERA, which has increased
their awareness of employment opportunities at Ranger mine.
• The partnership was formally recognised by the NT Minister for Employment
and Training in September 2012 as a finalist in the NT Training Awards –
“Training Initiative Award”.
• Five school based apprentices completed their Certificate II qualification while
still enrolled in school at the West Arnhem College
Energy Resources of Australia Ltd | Sustainable Development Report 2012
31
Environment
During 2012, ERA continued
to protect of the surrounding
environment as indicated
from the outcome of its
statutory monitoring
programmes.
The Australian
Government’s Supervising
Scientist Division monitors
the impact of uranium
mining on the environment
and people in the Alligator
Rivers region.
The Supervising Scientist Division’s
2011-2012 Annual Report states
that its extensive monitoring and
research programmes “confirm that the
environment has remained protected
through the period.”
Water
Water management is a critical
component of ERA’s business. ERA
is committed to ensuring that Ranger
mine operations can safely and
successfully store and treat large
volumes of process water.
Between 2009 and 2012, ERA
completed water management projects
for a total cost of $82 million, including
surface water interception trenches
around stockpiles to protect local
waterways, installation of continuous
real-time monitoring stations, and
additional ground water monitoring
bores to augment the extensive ground
water monitoring programme.
In addition to the above, during 2012,
ERA completed a 2.3 metre lift of
the Tailings Storage Facility (see
Operations page 13), constructed a
new pond water retention pond to store
up to one gigalitre of pond water (see
Operations page 13), and installed a
contingency water pumping system
between the Tailings Storage Facility
and Pit 3.
From 2012 to 2014, ERA expects
to expend a total of $316 million in
various water management projects,
including the $220 million Brine
Concentrator (see Major Projects
page 18).
Management of water
Water monitoring
ERA’s water monitoring system tracks
changes in composition and flow rates
in surface water, ground water and
waterways. This data is shared with the
Minesite Technical Committee and the
Supervising Scientist Division.
This extensive and comprehensive
system includes 200 ground water
monitoring bores and 13 continuous
real-time monitoring stations, located
upstream and downstream of the
Ranger mine, within Magela Creek and
Gulungul Creek.
All aspects of water capture, storage,
supply, distribution, sampling, use,
treatment and disposal at the Ranger
mine site are governed by ERA’s
Environment, Safety and Health
Management System.
There is also an extensive network
of continuous real-time monitoring
stations throughout the operational
area to ensure water is managed
in accordance with regulatory and
corporate requirements.
From an operations perspective, the
different classes of water encountered
on site are managed in accordance
with ERA’s Water Management
Plan which is updated annually and
submitted to the regulatory authorities
for approval.
The different classes of water are
process water, pond water, release
water, potable water and water
treatment plant permeate, with each
class of water requiring a different
management approach.
Currently ERA only treats pond water,
producing a high quality permeate
stream which is released to wetlands
or irrigated in designated approved
land application areas.
The planned completion of the Brine
Concentrator in 2013 will produce up to
1.83 gigalitres of clean water per year
through the treatment of process water.
Elizabeth Mitchell, Environmental Officer, a
member of the water quality team, who monitors
200 groundwater bores and 13 continuous real-
time monitoring stations at Ranger mine.
32
Energy Resources of Australia Ltd | Sustainable Development Report 2012
ERA continues to progress key actions
relating to a detailed independent
review of the ground water systems
around the Tailings Storage Facility,
commissioned by ERA and the
Gundjeihmi Aboriginal Corporation.
Independent Surface
Water Study Group
In March, ERA and the Gundjeihmi
Aboriginal Corporation agreed to
establish a new, Independent Surface
Water Working Group, following on
from the success of the independent
review of groundwater systems.
Over a six month period, the
working group examined the
impacts, monitoring and reporting
of surface waters flowing from the
Ranger mine. Committee members
included representatives from the
Gundjeihmi Aboriginal Corporation,
the Supervising Scientist Division and
ERA, an independent water expert
as the Chair, a highly regarded,
independent science advisor/reviewer
and several external subject matter
experts. Recommendations from
the review were presented to the
Gundjeihmi Aboriginal Corporation,
Supervising Scientist Division and ERA
in November. A plan to implement the
review findings will be developed in
early 2013.
Jabiluka Water
Management Pond
ERA and the Gundjeihmi Aboriginal
Corporation commenced discussions
on plans for the progressive
rehabilitation of the water storage pond
on the Jabiluka lease. The involvement
of the Mirarr Traditional Owners is vital
to ensure that the land is rehabilitated
in a culturally appropriate manner.
The pond, which currently stores
rainwater, will be drained and
rehabilitated to create a landform
profile that recreates as closely as
possible the land contours that existed
before mining.
The area will be replanted with
culturally and environmentally
appropriate tube stock plants from
the Kakadu Native Plants Nursery in
Jabiru, drawing on ERA’s experience
with revegetation strategies developed
from the eight hectare trial landform
project at Ranger.
the Brine Concentrator into a secure
repository at the base of Pit 3;
• backfill and rehabilitation of Pit 1, Pit
3 and the Tailings Storage Facility;
Land
ERA’s land management
responsibilities include operational
works such as controlled burning,
weed management, rehabilitation
and closure research and capability
demonstrations such as the trial
landform, Pit 1 closure and Land
Application Area rehabilitation trials,
and planning activities.
Integrated Tailings, Water
and Closure Study
ERA’s overall mine closure plan
outlines the strategy and action needed
to successfully close and rehabilitate
the Ranger Project Area within the
allocated timeframe once ERA’s mining
and processing operations come to
an end.
The closure strategy is based on
current scientific and operational
knowledge of rehabilitation techniques
and is aligned with ERA’s current plans
for Ranger operations through to 2021.
ERA significantly progressed a
complex Integrated Tailings, Water and
Closure Prefeasibility Study. The study
provided greater certainty on the work
required, the schedule of the works
and the costs to complete the closure
and rehabilitation of the Ranger site,
in accordance with the Environmental
Requirements and within the time
frame specified under the Ranger
Section 41 Authority.
The Prefeasibility Study has
developed, engineered and costed
various closure strategies and has
made a recommendation on ERA’s
preferred strategy.
The recommended strategy involves:
• transfer of tailings from the Tailings
Storage Facility to Pit 3;
• creation of the final landform;
• all associated water treatment/
management, environmental
studies, revegetation and
rehabilitation works; and
• demolition and disposal of all site
infrastructure.
As a result of the Prefeasibility Study
and other adjustments, ERA has
adjusted the provision for rehabilitation
works in the financial statements to
$640 million on a net present cost
basis ($565 million at 31 December
2011).
Based on the outcomes of the
Prefeasibility Study, the ERA Board
approved in November further funding
to complete a Feasibility Study to
advance the tailings transfer and
brine management aspects of the
closure strategy.
Pit 1 closure
A key element of ERA’s land
rehabilitation and closure strategy is
the early closure and rehabilitation of
the mined out Pit 1.
Pit 1 was the Ranger mine’s first
operational pit and was exhausted
in 1994. It is currently used for
storage of tailings and process
water in accordance with current
regulatory approvals.
ERA completed phase 1 of the
Pit 1 closure programme which
encompassed the installation of 7,554
prefabricated vertical drains (i.e. wicks)
in the top 40 metres of the tailings
mass within Pit 1.
This was completed by a purpose-built
amphibious barge operating throughout
the 2012 dry season.
The wicks are intended to dewater the
upper level of the tailings, promote
tailings consolidation and create
a stable surface to support heavy
machinery in order to commence
backfill operations.
• disposal of salts through the
injection of brine waste stream from
Water expressed via the wicks will
be transferred to the Tailings Storage
Energy Resources of Australia Ltd | Sustainable Development Report 2012
33
Environment
Facility so as to maintain a relatively
dry tailings surface in Pit 1.
Once the surface is ready, a fit-for-
purpose geotextile layer will be placed
over the tailings surface, followed by
layers of crushed and run-of-mine
waste rock until the final landform
is achieved.
The new landform will then be
revegetated using knowledge gained
from ERA’s trial landform project and
other targeted research.
Magela Land Application
Area rehabilitation trial
ERA is developing a comprehensive
rehabilitation strategy for land
application areas through the
Magela Land Application Area
rehabilitation trial.
The trial is designed to demonstrate
ERA’s soil remediation capability. The
Magela Land Application Area, located
on the Ranger Project Area, was
identified as the area most impacted
by contaminants as a result of irrigation
between 1985 and 2008.
Trial rehabilitation work carried out
confirmed the effectiveness of soil
remediation methods involving surface
scraping, soil mixing or a combination
of both.
The trial also tested revegetation
techniques required to restore the
site to a similar condition to nearby
undisturbed sites, and hosts the same
plant species.
Land application areas at Ranger were
previously used for disposing of excess
pond water in accordance with ERA’s
regulator approved Water
Management Plan.
Trial landform
ERA’s large-scale trial landform
is providing significant practical
experience about the most effective
ways to revegetate and rehabilitate
disturbed areas of the Ranger
Project Area.
The eight hectare trial landform was
constructed in 2009 and comprises
waste rock and laterite planted with
local native plants.
The landform provides the opportunity
to assess the performance of various
revegetation strategies, erosion
characteristics and rainfall run-
off patterns.
Results from the trial landform studies
are assisting in longer term modelling
of the performance of the final landform
created during rehabilitation of the
entire mine site.
Some tree species planted as tube
stock in 2009 and 2010 have reached
a height of eight metres, and local
native trees such as the Darwin
Woollybut (Eucalyptus miniata)
are flowering for the second
consecutive year.
A PhD student from Charles Darwin
University, funded by ERA and
Australian Postgraduate Awards
(APA) is studying the role that water
retention plays within Kakadu and the
reconstructed waste rock landform.
Weed management
and May 2012. This year there were
33 introduced plant species recorded
on the Ranger Project Area and
34 species recorded on the Jabiluka
Mineral Lease.
Three species (Antigonon leptopus,
Quisqualis indica and Stachytarpheta
sp.) appear to have been eradicated
from the Ranger Project Area, and
there were no new weed species
recorded on the Ranger Project Area
or Jabiluka Mineral Lease.
Twelve weed management areas on
the Ranger Project Area were surveyed
in 2012. Four of these areas had an
increase in weeds, whist the survey
recorded a decrease in eight areas.
On the Jabiluka Mineral Lease, 2.7 ha
of weeds were recorded in 2012,
compared to 4.4 ha recorded in 2011,
with a decrease in weeds in all areas.
In the 2011-2012 weed control season,
ERA made progress towards meeting
five of the seven targets from the 5-Year
Weed Management Plan. The plan
describes ERA’s weed management
aims and targets, and is designed to
enable ERA to meet overall objectives
for weed management.
The annual weed survey of the
Ranger Project Area and Jabiluka
Mineral Lease was conducted in April
The results of this survey will be used
to inform planning for the 2012-13
control season.
Aerial view of the trial landform in November 2012.
34
Energy Resources of Australia Ltd | Sustainable Development Report 2012
the Gundjeihmi Aboriginal Corporation,
with zero safety incidents or injuries.
Product stewardship
Helping the public and other key
stakeholders understand the benefits,
safeguards and impacts of developing
and using uranium for peaceful
nuclear power is a key part of product
stewardship in the uranium industry.
All of Australia’s uranium is exported
for exclusively peaceful purposes,
and only to countries and parties with
which Australia has a bilateral nuclear
cooperation (safeguards) Agreement.
These Agreements ensure that
Australia’s nuclear exports remain for
exclusively peaceful use.
Product stewardship includes
identifying and documenting the
impacts of mining uranium.
As part of Rio Tinto’s Product
Stewardship initiatives, ERA
completed in June 2012, a Life Cycle
Assessment (LCA) of its product,
uranium oxide concentrate.
The LCA forms part of an
Environmental Product Declaration
which advises customers and other
stakeholders of the environmental
performance of our operation.
The LCA examines the impacts of
one kilogram of our product in terms
of standard reporting measures,
and calculates total greenhouse gas
emission for our product, including
all contributions from our mining,
processing and use of materials.
The LCA calculates that on 2011
data, the greenhouse gas emissions
associated with producing one
kilogram of uranium oxide was 50.5
kilograms of CO2 equivalent. To put
this in perspective, 1 kilogram of
uranium oxide has the same electrical
generation energy as over 16 tonnes
of black coal or a release of over
38,000 kilograms of CO2 from the
burning of this much coal. Even taking
into account all the emissions from
the entire nuclear fuel cycle the CO2
emission signature of uranium is far
smaller than that from conventional
coal fuelled power stations. Similar
calculations can be performed for
Michele Bush, Environmental Advisor, undertaking a vehicle check for seeds and weeds prior to departing
Ranger mine.
In 2011, 11 weed management
areas were mapped on the Ranger
Project Area, rather than the whole
area, as part of strategic use of
survey resources.
Energy and greenhouse
gas emissions
Diesel fuel is the principal source of
energy at Ranger mine. Electricity
produced by the diesel power station
is used for lighting, heating, cooling,
processing operations, milling ore,
and water management (pumping,
filtration). The power station also
provides electricity for the town
of Jabiru and Parks Australia’s
headquarters.
The measured total energy
consumption for the Ranger operation
in 2012 was 1,627,834 GJ (gigajoules),
compared with 1,481,775 GJ in 2011.
Combined greenhouse gas emissions
for 2012 from all diesel, LPG, petrol
use and process emissions,
calculated as CO2 equivalent
(CO2-e), was 128,725 tonnes (2011:
109,087 tonnes).
The 2012 increase is due to a return to
normal production levels and additional
energy use for major projects,
compared to 2011, which was less due
to the 4.5 months suspension of plant
processing operations.
Biodiversity
ERA has conducted a traditional
burning programme on the non-
operational areas of the Ranger Project
Area and Jabiluka Mineral Lease
programme since 2007.
The programme involves the Mirarr
Traditional Owners in fire management
activities which reduce fire risk,
increase biodiversity, and protect areas
of cultural heritage significance.
The programme’s objectives include
providing employment to the Mirarr
and other local Indigenous people and
enabling re-connection with country on
the Ranger Project Area and Jabiluka
Mineral Lease.
Small groups travel on foot across
the country early in the dry season
(April–June), lighting small fires to
produce a mosaic of small burnt and
unburnt patches.
Examples of positive environmental
and cultural heritage outcomes
include burning in the Djarr Djarr
area to reduce fuel loads and protect
revegetation, and around the Jabiluka
sandstone outlier to create a barrier
against late dry season fires to protect
cultural heritage sites and sensitive
vegetation communities.
Over the four years, 15 Mirarr and
local Indigenous people have been
employed by the programme through
Energy Resources of Australia Ltd | Sustainable Development Report 2012
35
(AUA). The AUA promotes and
builds understanding of the uranium
industry’s role in contributing to the
global energy mix.
Further information on the AUA can be
obtained at http://www.aua.org.au/
Waste management
ERA continues to investigate
options for managing contaminated
hydrocarbon wastes on site.
Contaminated waste hydrocarbons
include used engine oils and other
lubricants associated with operation
and maintenance of machinery in
contact with uranium ore, such as mine
haul trucks and open gear boxes in the
processing plant.
Contaminated plant waste
hydrocarbons cannot be moved off
site and are stored in steel drums in a
secure facility on site.
ERA is working with the Australian
Nuclear Science and Technology
Organisation to investigate options for
managing hydrocarbon wastes.
Risk management
ERA’s environmental protection
measures, health and safety systems,
radiation detection procedures and
production activities are monitored,
audited and reviewed on a
regular basis.
ERA strives for best practice in all
these areas. The Company’s Code of
Business Conduct defines expected
behaviours for Company decisions
and actions.
ERA’s environment policy recognises
that exemplary environmental
management is crucial to long
term success, requires compliance
with all applicable legislation and
other commitments, and aims to
continuously improve environmental
management performance.
The Company maintains international
certification (ISO 14001) of its
Environmental Management
System, which includes ERA’s Water
Management System.
A review and consolidation of storage
drums carried out in 2012 reduced the
number of hydrocarbon waste drums
by 50 per cent.
ERA also maintains Australian
certification (AS 4801) of its Safety and
Health Management System, including
ERA’s Radiation Management System.
Environment
natural gas with over 21,000 kilograms
of CO2 being produced by a natural
gas power plant with equivalent energy
to 1 kilogram of uranium.
(source: www.world-nuclear.org)
Given the electricity which will be
produced from this product, this assists
in confirming that uranium is one of the
lowest greenhouse gas emitters of any
source of energy, taking into account
all components of the fuel cycle.
ERA also plays a key role in
developing product stewardship and
supporting research for the wider
industry through its work with key
industry associations, including the
World Nuclear Association (WNA),
the United Nations International
Atomic Energy Agency (IAEA), and
the International Commission on
Radiological Protection (ICRP).
This included working with scientific
organisations at the cutting edge of
radiation protection, development
of a standard global approach
to evaluating health, safety and
environment performance, and seeking
global adoption of best practice in
sustainability.
ERA’s work with the WNA included
contributing to the development
of an international uranium mining
standardised environmental
checklist, which can be used by
uranium purchasers to assess the
environmental performance of
uranium producers.
ERA’s engagement with the ICRP
focussed on support for cutting edge
research into the latest assessment of
dosimetry values for indoor exposure
to radon and radon decay products.
This enables ERA to adopt the latest
ICRP results, findings or exposure
limit variations.
ERA worked with the IAEA to establish
a programme which will investigate
ways to consolidate occupational
exposures in the uranium industry
worldwide, similar to the register
established this year in Australia.
ERA is also an active member of
the Australian Uranium Association
36
Energy Resources of Australia Ltd | Sustainable Development Report 2012
Employment
In 2012, ERA’s workforce
increased in line with
expanded activity relating
to major projects and
additional studies.
The growth was partially
offset by reductions in
staff numbers in line with
cost saving measures
identified through the
Business Review.
As at 31 December, ERA’s total
workforce was 639 people comprising
594 staff and 45 contractor positions
across a range of full time, job-sharing,
part-time and secondment
arrangements.
ERA also directly employed 18
apprentices, four school based
apprentices, and five Indigenous
trainees.
ERA’s female employment participation
rate was 20 per cent, with 16 females
across the business fulfilling leadership
roles from supervisor level to
manager level.
ERA also provides flexible work
arrangements for both male
and female employees to help
them balance their work and life
commitments.
Alexander Spiers, Senior Electrical Engineer, and Richard Mitchell, Electrical Maintenance Technician, part
of the electrical maintenance team at Ranger.
Indigenous employment rates at 17 per
cent have remained relatively steady
despite cost saving measures required
by the Business Review.
The average rolling staff turnover
in 2012 was 25 per cent, which is a
result of both standard industry labour
movement and a transient population
in the Northern Territory.
Indigenous employment
ERA is a leading employer of
Indigenous people in the Northern
Territory and a principal employer
in the West Arnhem region. ERA’s
Indigenous employees are employed
in positions at many levels within the
company, from operations to human
resources to leadership roles.
At 31 December 2012, ERA’s
workforce included 103 Indigenous
employees, representing 17 per cent of
all ERA full-time equivalent employees.
In December there were 16 Indigenous
contractors working at ERA.
Throughout 2012, ERA maintained in
excess of 100 Indigenous employees.
This has never been achieved before
at ERA.
Energy Resources of Australia Ltd | Sustainable Development Report 2012
37
Employment
ERA employed five Indigenous
trainees across a range of operation
departments. Trainees are matched
with mentors who work with trainees
on addressing their needs in the
workplace and providing both personal
and operational support to trainees in
the workplace.
The Mentoring Programme is part
of ERA’s Indigenous Employment
Strategy, which also includes flexible
work arrangements, continued
involvement in the Northern Territory
Mine Training Programme, workplace
literacy and numeracy training,
and supporting students from local
communities in work experience and
school-based apprenticeships.
Late in 2012, ERA employed a
Numeracy and Literacy Officer to
support learning opportunities for
Indigenous employees. In addition
to designing an overall programme
tailored to the workplace the focus has
been on intensive training with a small
group of employees. Early indications
of progress are very positive.
ERA has required leaders at all
levels of the business to attend the
“Indigenous Employment for Leaders”
course. This interactive course enables
leaders to share, discuss and learn
about the opportunities and challenges
of managing Indigenous employees.
The 133 leaders and specialists who
attended this training gained
valuable experience and provided
positive feedback.
Darryl Tambling junior was part of the 2012 school based apprenticeship programme which forms part of
the ERA and West Arnhem College Education partnership, which creates pathways for students into work
at Ranger mine.
and helps people from local Indigenous
communities acquire the necessary
work ready job skills.
ERA’s support for the programme
involves providing opportunities for
programme participants from local
Indigenous communities to learn on
the job at Ranger.
The four female participants all
completed the programme successfully
and accepted offers of employment
with ERA.
This programme was recently
recognised at the Australia National
Training Awards where it won the
category of best Training
Initiatives Programme.
The even time roster has delivered
significant improvements in
occupancy rates for company-owned
accommodation, up from 50 per cent
in 2011 to over 95 per cent in the
latter half of 2012. Annualised savings
exceed $5 million and the new roster
has improved recruitment and retention
of new and existing staff.
A market review of the Monday to
Friday (non-shift) roster arrangements
highlighted opportunities to improve
working arrangements for FIFO and
residential staff based at Ranger.
As such, from June 2012 ERA
introduced a new policy to allow FIFO
staff to enter into a Compressed
Working Arrangement (CWA).
Employees on the CWA have one
day off every two weeks as a result of
compressing their usual ten days into
nine days over the fortnight.
This allows a regular day off every
two weeks to allow people to attend
to personal matters and activities on
a week day. The change has been
positively received by FIFO and
Jabiru employees.
Cultural Awareness
New employees and contractors
are introduced to the cultural,
environmental and historical values
Northern Territory Mine
Training Programme
New rosters and work
arrangements
Four Indigenous women have found
ongoing employment with ERA
after gaining job ready skills through
the Northern Territory Mine
Training Programme.
The pre-employment programme
is run by the Minerals Council of
Australia (Northern Territory Division)
and Batchelor Institute of Indigenous
Tertiary Education. The programme is
tailored towards the mining industry
The continuation of the even time
(seven on seven off) roster was
successfully sustained during 2012.
The even time roster was identified
as enabling the business to most
efficiently maximise the utilisation of its
fly-in, fly-out (FIFO) accommodation
as well as providing a market leading
condition of employment for ERA’s
employees, and improves attraction
and retention of employees.
38
Energy Resources of Australia Ltd | Sustainable Development Report 2012
of the Kakadu region and the Mirarr
Traditional Owners through the Cultural
Awareness Programme course.
This training forms part of ERA’s
induction programmes and is delivered
in partnership with the Gundjeihmi
Aboriginal Corporation representing
the Mirarr Traditional Owners.
During the year, 125 new employees and
long term contractors attended Cultural
Awareness training programmes.
Education Partnership
The Education Partnership between
ERA and the West Arnhem College
(WAC) provides quality education
and training opportunities leading to
real employment and career options
for students and families in the West
Arnhem region.
The partnership forms the basis
for an integrated programme of
activities to build capacity in the local
economy, support sustainable regional
development, and improve education
and employment outcomes for local
community members.
In 2012, ERA employed five school
based apprentices. This programme
allowed them to obtain a Certificate
II qualification while still enrolled in
school at the West Arnhem College.
During 2012, ERA facilitated eight
separate school student and teacher
tours of the Ranger mine including all
the teachers and teachers’ aides from
the Gunbalanya campus in Arnhem
land. These visits are designed to
raise awareness about employment
opportunities at the Ranger mine and
to answer questions that teachers or
students have about the Ranger mine.
Two students (one male and one
female) completed structured work
placements in automotive mechanics
at ERA during 2012. WAC senior
students combined media studies and
learned video editing skills through
the creation of short videos about
their work experiences with ERA. The
students devised, scripted and directed
the videos as part of integrated
learning programmes supported by
the WAC and ERA. The videos will
be used as part of an online social
media campaign promoting work and
education opportunities with ERA
in 2013.
The partnership was formally
recognised by the NT Minister
for Employment and Training in
September 2012, as finalist in the
NT Training Awards – “Training
Initiative Award”.
The Purdue family featured in a joint recruitment advertisement to recruit miners and teachers to the
Ranger Mine and West Arnhem College. Des works at ERA in the Health, Safety and Environment team
and Gayle is a teacher at the West Arnhem College. For more information visit:
http://www.energyres.com.au/careers/561_miner_teacher_jobs.asp
Case Study: Scott Miller
ERA’s Education Partnership with
the West Arnhem College allows
students at West Arnhem College
to begin their qualifications
while still at school as part of the
School Based Apprenticeship
Programme.
Scott Miller, 18, grew up in Jabiru
and completed his school based
boiler maker apprenticeship
in 2012, at Ranger mine. In
October 2012 Scott was awarded
a Certificate II in Engineering
Fabrication at a graduation
ceremony through Charles
Darwin University.
He successfully completed his
Northern Territory Certificate of
Education (NTCE).
Scott commenced a full time
boiler maker apprenticeship with
ERA in December, 2012.
Scott said “he would encourage
other young Indigenous people to
take advantage of opportunities
in their local areas such as
the career path he is pursuing
through ERA”.
“I hope to finish my
apprenticeship and stay there
for a bit, and then one day go to
Perth hopefully and see what the
mines in Western Australia are
like. I see a bright future for me in
the mining industry”, Scott said.
Scott’s mother Elizabeth said
she felt extremely proud that her
son had been able to complete
his Certificate II and NTCE
qualifications and gain full time
employment at Ranger mine.
Scott was also awarded the
Northern Territory Board of
Studies School-Based Trainee
High Commendation award in
December.
Energy Resources of Australia Ltd | Sustainable Development Report 2012
39
Community
ERA is an important and
active part of the local
community, and makes
significant contribution to
the regional and Northern
Territory economies. ERA
participates in the local
Jabiru community and the
wider Northern Territory
community through a range
of engagement activities,
support for education, and
funding opportunities.
A key part of ERA’s focus is
building awareness of and
supporting the important
cultural heritage of the
Alligator Rivers region.
Relationship with Mirarr
Traditional Owners
The Gundjeihmi Aboriginal
Corporation, representing the
Mirarr Traditional Owners and ERA
collaborate on a range of matters of
mutual interest. These ranged from
environmental protection and cultural
heritage on ERA’s mining tenements to
housing and town planning in Jabiru.
In 2012, the Gundjeihmi Aboriginal
Corporation was formally appointed
as a member of the Ranger Minesite
Technical Committee. The Gundjeihmi
Aboriginal Corporation and ERA
also jointly launched an independent
surface water study for Ranger
Project Area.
Mirarr Traditional Owners are
represented on the Closure Criteria
Committee Working Group and are
actively participating in rehabilitation
planning, including decommissioning
and rehabilitation of the Jabiluka pond.
Both the Gundjeihmi Aboriginal
Corporation and ERA are integral to
the future of Jabiru and the region,
and are collaborating around town
governance, housing, infrastructure
and local business development.
In 2012, the equivalent of 4.25 per
cent of Ranger sales revenue was
disbursed to Northern Territory based
Aboriginal organisations, including the
Gundjeihmi Aboriginal Corporation.
A further 1.25 per cent of Ranger
sales revenue paid to the
Commonwealth is distributed to the
Northern Territory Government.
The Mirarr Traditional Owners are
investing mining royalty benefits into
the future of Jabiru, with the completion
and opening of the Djidbidjidbi
Residential College as well as running
small businesses, a youth centre,
social health and cultural programmes.
In 2012, ERA’s royalties totalled
$21 million (2011: $16 million). As
ERA transitions from open cut mining
to processing stockpiles from 2013
onward, royalty payments are likely to
continue to decline in line with forecast
production rates.
The Mirarr Traditional Owners have
expressed an openness to consider
future development on the Ranger
Project Area.
Ranger Mining Agreement
The Gundjeihmi Aboriginal
Corporation, the Northern Land
Council, ERA and the Commonwealth
Government finalised the suite of
agreements governing operations at
the Ranger Project Area, including
a new Mining Agreement.
These agreements entitle the Mirarr
to greater participation in the benefits
from mining on their land, including
an increased share of royalties, and
establish a regional socio-economic
trust and a Relationship Committee
with ERA to promote information
sharing and collaboration.
Royalty payments
ERA makes royalty payments to the
Commonwealth Government of 5.5
per cent of net sales revenue from
Ranger mine production. Royalties are
not payable on material purchased
by ERA from another operation and
subsequently sold to meet customer
commitments.
Over the past five years, ERA has
made royalty payments of $129 million
with $100 million distributed to
Territory based Indigenous
organisations and $29 million to the
Northern Territory Government.
ACIL Tasman Report:
economic contribution
During 2012, ERA commissioned
ACIL Tasman to complete an
Economic Impact Assessment of
ERA’s operations in the region. The
report highlighted ERA’s significant
contributions to the town of Jabiru and
the East Alligator Rivers region, as
well as contributions to the Northern
Territory and Australia.
The report assessed ERA’s local and
regional contributions in terms of direct
contributions (such as employment,
wages and salaries, purchase of
supplies, royalty payments) and
indirect contributions (flow-on effects
from salaries being spent locally, the
support for regional suppliers and
local business).
40
Energy Resources of Australia Ltd | Sustainable Development Report 2012
Awards. ERA supported the Mahbilil
Festival in Jabiru and the Stone
Country Festival in Gunbalanya. The
Mahbilil Festival showcases art, culture
and the community spirit of Jabiru
and the West Arnhem region. ERA
was proud to be a major sponsor of
the festival and staged an information
stand along with many other
stallholders. The festival also included
a variety of music, dance, art and
entertainment to celebrate the diversity
of the region.
The Stone Country Festival is held in
Gunbalanya and celebrates the culture
and talents of the community. ERA
was once again a part of the event
with many employees spending time
interacting with festival attendees and
staffing the ERA information stand.
ERA was proud to sponsor
the Kunborrl Traditional dance and
song, which was performed by
Indigenous dancers.
ERA sponsors the George Chaloupka
Fellowship programme run by the
Museum and Art Gallery of the
Northern Territory Foundation. The
2012 Fellowship was awarded to
Monash University PhD research
student Daniel James. Daniel will
use the $28,000 scholarship funds to
examine and document the rock art
of the Jawoyn site known as Little
Barra, a rock shelter on the Arnhem
Land plateau.
Daniel’s research tells the
archaeological story how Jawoyn
ancestors engaged with a particular
place over thousands of years through
rock art at the Little Barra site.
The research combines detailed
systematic inventory of the rock art
of the Little Barra rock shelter with
a systematic digital enhancement
programme of all decorated rock
surfaces. Daniel’s research will
continue until October 2013.
Rob Atkinson, ERA’s Chief Executive, Justin O’Brien, Executive Officer, Gundjeihmi Aboriginal Corporation
and Yvonne Margarula, Mirarr Senior Traditional Owner at the signing of the Ranger Mining Agreement in
January 2013.
The dollar value of ERA’s combined
direct and indirect contributions in 2011
was assessed as being $265 million for
Jabiru (87 per cent of Jabiru’s regional
gross value added), $273 million (58
per cent) in the East Alligator River
Region, and $580 million (3.6 per cent)
for the Northern Territory.
In addition, ERA holds the subleases
on approximately 66 per cent of private
dwellings in Jabiru and a number of
key commercial buildings. ERA also
operates an airport to serve the mine,
the Jabiru township and surrounding
regions and the tourist industry (82 per
cent of the airport’s traffic is unrelated
to the mine). In addition, Ranger
employees’ children account for 36 per
cent of the student population at the
Jabiru Area School.
ERA is directly and indirectly
responsible for generating 71 per cent
of jobs in Jabiru and 2.6 per cent of the
Northern Territory’s total employment.
ERA’s royalty payments are a major
source of income for the Indigenous
community as well as the Northern
Territory Government.
Community engagement
ERA is very aware of the significant
role it plays in the region. ERA
continues to engage with the
local Jabiru community and keep
stakeholders up to date on its
operations and major projects. During
2012 ERA held formal quarterly
business updates with all of the main
stakeholders and community groups in
Jabiru, as well as providing information
via ERA’s presence at the Community
Office in Jabiru.
Community partnerships
In 2012, ERA supported a wide range
of community activities, including
over $110,000 in partnerships and
sponsorships providing support to local
schools and students, sport, the arts
and regional festivals.
Support was provided for a range of
local community-based events, ranging
from the ERA Golf Open and Gurrung
Community Sports Carnival through
to larger-scale events such as the
Northern Territory Indigenous Music
Energy Resources of Australia Ltd | Sustainable Development Report 2012
41
Pit 3 with the Ranger mine processing plant in the background. The Ranger 3 Deeps exploration
decline portal is located between the processing plant and Pit 3.
Financial Report 2012
42
Energy Resources of Australia Ltd | Financial Report 2012
Financial Report 2012
Financial Report
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
2012 ASX Announcements
Ten Year Performance
Index
Glossary
Corporate Directory
44-69
70
71-75
76
77
78
79
80-115
116
117-118
119-120
121
122
123
124
125
Energy Resources of Australia Ltd | Financial Report 2012
43
Directors’ Report
Directors
dR david klingneR
BSc(Hons), PhD, FAusIMM
CHAIRMAN AND INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed as a Director in July 2004 and as Chairman in January 2005. Member of the Audit
and Risk Committee and Remuneration Committee. Dr Klingner retired from Rio Tinto in
2004 after 38 years of service. During his time with Rio Tinto he worked in roles involving
exploration, project development and production including a period as Group Executive in
charge of coal and gold. He was head of exploration when he retired and a member of Rio
Tinto’s Executive Committee. Dr Klingner is also a non-executive Director and the Chairman
of Codan Limited and Turquoise Hill Resources Ltd (formerly Ivanhoe Mines Ltd).
MR Rob atkinSon
BE(Hons) Mining & Petroleum Engineering
CHIEF EXECUTIVE
Appointed as a Director in September 2008 and Chief Executive in September 2008. Mr
Atkinson has served with the Rio Tinto Group since 1993, holding management, operational
and corporate roles in Australia, the US and the UK, in the Energy, Iron Ore and Aluminium
Product Groups. Mr Atkinson is the Chairman of the Australian Uranium Association. Mr
Atkinson has been appointed as a Vincent Fairfax Fellow and a member of the Advisory
Board of the Melbourne Business School, Centre for Ethical Leadership.
dR Helen gaRnett
BSc(Hons), PhD, PSM, FTSE, FAICD
INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed as a Director in January 2005. Chair of the Audit and Risk Committee and
member of Remuneration Committee. From October 2003 to 31 December 2008, Dr Garnett
was Vice Chancellor of Charles Darwin University in the Northern Territory. Between 1994
and 2003, Dr Garnett served as the Executive Director of the Australian Nuclear Science &
Technology Organisation (ANSTO) and as an Australian representative to the United Nations
International Atomic Energy Agency. Dr Garnett is an Emeritus Professor of the University
of Wollongong and of Charles Darwin University, a Fellow of the Academy of Technological
Sciences and Engineering and a Fellow of the Australian Institute of Company Directors.
Dr Garnett is currently the Chair of Delta Electricity, a non-executive Director of Carbon
Energy Limited, Director of the Australian Centre for Plant Functional Genomics, Director of
the Grape and Wine Research and Development Corporation and Director of the Museum
and Art Gallery, NT Foundation.
MR PeteR tayloR
BA, BSc, LLB, LLM, FAICD
NON-EXECUTIVE DIRECTOR
Appointed as a Director in February 2007. A lawyer in private practice before joining
Rio Tinto, Mr Taylor has held a number of executive and management positions in the
exploration, project development, commercial and legal operations of the Rio Tinto
Group. Mr Taylor has served as Managing Director and Chairman of Bougainville
Copper Limited since 21 October 2003, having been a Director since April 1997.
Mr Taylor is also a director of a number of unlisted Rio Tinto Group companies.
44
Energy Resources of Australia Ltd | Financial Report 2012
MR joHn PegleR
BE (Mining), MAusIMM
INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed as a Director in July 2009. Member of the Audit and Risk Committee
and Chair of Remuneration Committee. Mr Pegler is also a non-executive Director
and Chairman of Bandanna Energy Limited and non-executive Director of WDS
Ltd and CS Energy Limited. He is the past Chairman and Director of the Australian
Coal Association Ltd and the Past President and a Life Member of the Queensland
Resources Council. Mr Pegler was previously Chief Executive Officer of Ensham
Resources Pty Limited and has previously held operational roles within BP Australia
Limited and the Rio Tinto Group including President Director of PT Kelian Equatorial
Mining and Managing Director Group Procurement Eastern Hemisphere.
MR PeteR McMaHon
BEcon(Hons), MEcon, MSc
INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed as a Director in November 2012. Member of the Audit and Risk Committee
and Remuneration Committee. Mr McMahon has been the principal of an independent
advisory business, McMahon Advisory Pty Ltd, since 2010. Prior to this time, Mr
McMahon spent 30 years with the Rio Tinto Group in senior commercial roles with
emphasis on business and project development in Australia, UK, USA and
Europe. Mr McMahon is also a non-executive Director and Chairman of Ivanhoe
Australia Limited.
MRS Helen newell
BComms, MBA
NON-EXECUTIVE DIRECTOR
Appointed as a Director in November 2012. Mrs Newell is currently Vice President –
Infrastructure, Rio Tinto Energy, responsible for oversight of infrastructure strategy and
development to support the Energy groups businesses globally. Prior to joining the Rio
Tinto Group in May 2011, Mrs Newell spent 20 years in the transport and infrastructure
industry in Australia and North America, with Booz Allen & Hamilton and the Toll Group.
Her roles included divisional general manager of Toll Transitions, and leading major
projects, strategy and external relations for Toll Holdings’ subsidiaries. She also sat on
various industry and subsidiary boards, including the Australian Logistics Association
and the Australasian Railways Association. Mrs Newell is also a Director of Port
Waratah Coal Services Limited and the Ascham School.
MR MattHew coulteR
BE (Chemical), MBA
NON-EXECUTIVE DIRECTOR – RESIGNED 20 NOVEMBER 2012
Appointed as a Director in June 2010 and resigned on 20 November 2012. Mr Coulter
is the Director Energy Business Development for Rio Tinto. Mr Coulter joined Rio Tinto
in 1994, and has held roles in business evaluation, business development, operational
improvement and external relations. He was Chairman of Dalrymple Bay Coal Terminal
Pty Ltd and Half Tide Marine Pty Ltd, and a director of Port Waratah Coal Services Ltd,
Hunter Valley Coal Chain Co-Ordinator Limited, and a number of unlisted Rio Tinto
Group companies.
Energy Resources of Australia Ltd | Financial Report 2012
45
Directors’ Report
Executive Committee
MR Rob atkinSon
BE(Hons) Mining & Petroleum Engineering
CHIEF EXECUTIVE
Appointed as a Director and Chief Executive in September 2008. Mr Atkinson
has been employed with the Rio Tinto Group since 1993, holding management,
operational and corporate roles in Australia, the US and the UK, in the Energy, Iron
Ore and Aluminium Product Groups. Mr Atkinson is the Chairman of the Australian
Uranium Association. Mr Atkinson has been appointed as a Vincent Fairfax Fellow
and a member of the Advisory Board of the Melbourne Business School, Centre for
Ethical Leadership.
MR Steeve tHibeault
BA (Acc)
CHIEF FINANCIAL OFFICER AND COMPANY SECRETARY
Mr Thibeault was appointed as Chief Financial Officer in July 2009 and Company
Secretary in 2009. Mr Thibeault has over 32 years experience in the mining and
manufacturing industries and previously held diverse finance roles with Rio Tinto
Alcan and Alcan Aluminium Limited.
MR tiM eckeRSley
B.Sc. Agric (Hons)
GENERAL MANAGER, OPERATIONS
Mr Eckersley was appointed as General Manager Operations in September 2012.
Over the last 20 years Mr Eckersley has held various leadership roles in the
mining industry including in bauxite, alumina, gold, mineral sands and iron ore.
Prior to joining ERA, Mr Eckersley was General Manager within Rio Tinto Iron Ore
Expansion Projects business unit.
dR gReg SinclaiR
BAppSc (Chemistry), PhD, FAusIMM
GENERAL MANAGER, TECHNICAL AND MAJOR STUDIES
Dr Sinclair was appointed as General Manager Technical and Major Studies in
May 2007. Dr Sinclair has over 27 years experience in the resources sector and
has formerly held roles with the Iron Ore Company of Canada, Rio Tinto Technical
Services & HSE Groups, North Limited and the Australian Nuclear Science &
Technology Organisation.
46
Energy Resources of Australia Ltd | Financial Report 2012
MR alan tietZel
BA BCom Dip Ed MBA
CHIEF ADVISOR AGREEMENTS
Mr Tietzel was appointed as General Manager External Relations in July 2010 and
subsequently Chief Advisor Agreements in September 2012. He has a background
in Aboriginal land agreements, regional development, government relations,
human resources and organisation development. Mr Tietzel joined Rio Tinto in
1990. He has worked in the diamonds, salt, bauxite and alumina sectors, and in
various corporate functions.
MR david StaRk
BE(Hons) Electrical Engineering, MIE Aust
GENERAL MANAGER MAJOR PROJECTS
Mr Stark was appointed as General Manager Major Projects in September 2011.
Mr Stark started with Rio Tinto in 1997 and has held various leadership roles in the
engineering and maintenance fields. Prior to starting with ERA, Mr Stark was the
Engineering Manager for the Rio Tinto Energy Major Projects Group.
MR RobeRt o’toole
LLB, BSc
COMPANY SECRETARY AND LEGAL COUNSEL
Mr O’Toole was appointed as joint Company Secretary and Legal Counsel in July
2010. Mr O’Toole joined Rio Tinto in 2005 and previously served as company
secretary and legal counsel at Coal & Allied Industries Limited. Prior to joining the
Rio Tinto Group, Mr O’Toole was employed in private legal practice since 2000.
Energy Resources of Australia Ltd | Financial Report 2012
47
Directors’ Report
Meetings of Directors
The number of Directors’ and committee meetings held and the number of meetings attended by each of the Directors of the Company
during the financial year is shown below:
DIRECTORS MEETINGS
AUDIT AND RISk
COMMITTEE MEETINGS
REMUNERATION
COMMITTEE MEETINGS
OTHER COMMITTEE
MEETINGS
DIRECTOR
HELD ATTENDED
HELD ATTENDED
HELD ATTENDED
HELD ATTENDED
D Klingner
H Garnett
P Taylor
J Pegler
R Atkinson
P McMahon1
H Newell2
M Coulter3
6
6
6
6
6
1
1
6
6
6
6
6
6
1
1
6
3
3
-
3
-
-
-
-
3
3
-
3
-
-
-
-
2
2
-
2
-
-
-
-
1
2
-
2
-
-
-
-
1
1
-
-
1
-
-
-
1
1
-
-
1
-
-
-
Note 1 Appointed as a Director on 20 November 2012.
Note 2 Appointed as a Director on 20 November 2012.
Note 3 Resigned as a Director on 20 November 2012.
Mr Atkinson was invited to Audit and Risk Committee meetings and attended all such meetings held during the year.
Interests of Directors
The interests of each Director in the share capital of the Company, other companies within the consolidated entity or in a related body
corporate as at 31 January 2013 are shown below:
DIRECTOR
D Klingner
H Garnett
P Taylor
J Pegler
R Atkinson
P McMahon
H Newell
ENERGy RESOURCES
Of AUSTRALIA LTD,
ORDINARy SHARES
RIO TINTO LIMITED,
ORDINARy SHARES
RIO TINTO LIMITED,
OpTIONS IN
ORDINARy SHARES
RIO TINTO LIMITED,
CONDITIONAL
INTERESTS IN
ORDINARy SHARES
-
-
-
-
-
-
161
29,787
-
24,996
6,331
888
18,405
-
-
-
12,987
-
2,699
-
-
-
-
9,666
-
11,971
-
6,296
48
Energy Resources of Australia Ltd | Financial Report 2012
paid in 2012 was $616,000 inclusive of
statutory superannuation.
The non-executive Directors’ fees
were reviewed by the Board in January
2013. The annual fees for non-
executive Directors for 2013 (excluding
superannuation) are as follows:
2013
2012
Chairman
$162,000 $162,000
Non-executive
Director
Audit and Risk
Committee
Chairman*
Audit and Risk
Committee
Member*
Remuneration
Committee
Chair*
$90,000
$90,000
$20,000
$20,000
$13,000
$13,000
$5,000
-
* Fees are payable in addition to Chairman and non-
executive Director fees.
The Board has resolved that no
additional committee fees are payable
to members of the Remuneration
Committee (excluding the Remuneration
Committee Chair, who is entitled to a fee
of $5,000 per year from 1 January 2013).
Remuneration report
The Remuneration Report is set out
under the following main headings:
A. Board oversight of remuneration
B.
C.
Principles used to determine non-
executive Directors’ remuneration
Principles used to determine
executive remuneration
D.
Details of remuneration
E.
Executive service agreements
F.
Share based compensation
G.
Additional information
The information provided in the
Remuneration Report has been audited
by the Company’s independent auditor
as required by section 308(3C) of the
Corporations Act 2001.
A
Board oversight of
remuneration
In 2012, the Board established
a Remuneration Committee with
responsibility to review:
•
•
•
•
remuneration framework and
policies (including key performance
indicators) for the Company’s senior
executives;
remuneration and performance of
the Company’s senior executives;
remuneration of the Company’s non-
executive directors; and
remuneration disclosures made by
the Company.
The Remuneration Committee Charter is
available at the Corporate Governance
section of the website.
At the 2012 Annual General Meeting,
the 2011 Remuneration Report was
approved with 92.14% of shareholders
who cast a vote, voting in favour.
B
Principles used to
determine non-executive
Directors’ remuneration
Fees and payments to non-executive
Directors reflect the demands which are
made on, and the responsibilities of,
the non-executive Directors. Up to and
including 2012, non-executive Directors’
fees and payments were reviewed
annually by the Board. From 2013, the
Remuneration Committee will review
and make recommendations to the
Board regarding non-executive Directors’
remuneration. These fees are comprised
of a base fee and any fees payable
to non-executive Directors for their
membership on established committees
of the Board. ERA does not pay
retirement or post-employment benefits
to non-executive Directors, however,
statutory superannuation contributions
are paid. In addition, from time to time,
the Board may approve that non-
executive Directors receive additional
fees for services provided outside the
established committee processes.
The following principles are applied in
determining the remuneration of non-
executive Directors:
•
•
•
•
the responsibilities of and time spent
by the non-executive Directors
on the affairs of ERA, including
preparation time;
acknowledgement of the personal
risk borne as a Director;
comparison with professional market
rates of remuneration to remain
competitive with the market having
regard to companies of similar size
and complexity; and
the desire to attract Directors of a
high calibre with appropriate levels
of expertise and experience.
At the 2008 Annual General Meeting,
shareholders resolved to amend the
Constitution of the Company to provide
that the aggregate remuneration for
non-executive Directors of ERA would
be not more than $800,000 per annum.
The aggregate amount of non-executive
Directors’ remuneration
Energy Resources of Australia Ltd | Financial Report 2012
49
Directors’ Report
C
Principles used to determine
executive remuneration
Following its establishment in early
2012, the Remuneration Committee is
responsible for the review of, and where
appropriate will make recommendations
to the Board in respect of, executive
remuneration.
As the Company is a member company
of the Rio Tinto Group, the Company
generally implements the remuneration
policies and procedures determined by
the Rio Tinto Remuneration Committee
and applied to senior management
personnel across the wider Rio Tinto
Group, to determine the remuneration
of the Chief Executive and other key
management personnel of the Company
(together, ‘senior executives’).
As a member of the Rio Tinto Group of
companies, ERA’s senior executives
are seconded from Rio Tinto and are
hence drawn from the talented pool of
executives in the wider Rio Tinto Group.
It is the view of the Remuneration
Committee (which has been endorsed
by the Board) that a company of ERA’s
size, scope and remote location would
have significant difficulty in attracting
executives of the calibre neccesary
to ensure superior performance or in
retaining them for significant periods
if this arrangement was not in place.
Under these circumstances, the Board
believes that the general application of
the Rio Tinto remuneration framework to
ERA’s senior executives, with appropriate
review by the Company’s Remuneration
Committee, is of benefit to ERA.
For the purposes of assessing the
appropriate level of remuneration, the
Australian resources sector is considered
the most relevant comparator group.
Additional references are also made to
other relevant supplementary comparator
groups comprising companies primarily
from the ASX 200. Typically, base
salaries are positioned at the median of
these comparator groups, while incentive
plans are designed with the potential
to deliver total remuneration outcomes
across the full market range according to
business and individual performance.
The related costs of these programmes
are recognised in the Company’s
financial statements. For the purpose of
disclosure under the Corporations Act
2001 and relevant Accounting Standards,
the “key management personnel” of the
Company and the consolidated entity,
apart from the Chief Executive and the
non-executive Directors, have been
determined to be the General Managers
of the Company (including the Chief
Advisor Agreements) reporting directly to
the Chief Executive.
Executive remuneration, including
base salary and short and long term
incentive plan awards, and other terms
of employment are reviewed annually
having regard to the evaluation of
individual and business performance
against goals set at the start of the year,
global economic conditions, relevant
comparative information and advice from
the Rio Tinto Remuneration Committee.
As well as base salary, remuneration
packages may include fringe benefits
such as medical insurance, car, rent
and other allowances, superannuation,
retirement and termination entitlements
and short and long term incentives.
The annual performance evaluation and
management process includes formal
consultation between the Chairman
(based on the Remuneration Committee’s
review and recommendations) and
the Chief Executive of the Rio Tinto
Energy Product Group regarding the
Chief Executive of the Company, and
between the Remuneration Committee
and the Chief Executive of the Company
regarding the other senior executives.
The executive pay and reward framework
is designed to provide a total remuneration
package which is competitive in the
market; aligns total remuneration with
delivered individual and short and long
term business performance; strikes an
appropriate balance between fixed and
variable components; links variable
components to the achievement of
challenging individual and business
performance targets, and ensures the
attraction, motivation and retention of the
high calibre senior executives required to
lead the Company.
The Company Secretaries of the
Company are subject to the same
executive remuneration pay and
reward framework.
The executive pay and reward framework
has four components:
•
•
•
•
Base salary and benefits;
Short term incentive plans;
Long term incentive plans through
participation in the Rio Tinto Share
Option Plan (SOP), Performance
Share Plan (PSP) and Rio Tinto
Management Share Plan (MSP); and
Other remuneration such as
superannuation.
performance and non-
performance related
remuneration
Total remuneration is a combination
of the fixed, performance and service
related elements described in this report.
The short and long term incentive plans
(other than the Rio Tinto MSP) are
the variable components of the total
remuneration package and are therefore
“at risk”. They are tied to achievement
of specific business measures, individual
performance and service. The other
components are referred to as “fixed” as
they are not at risk.
The long term incentive plan is designed
to provide a target expected value of
between 22.5 and 55 per cent of base
salary for the senior executives and the
Chief Executive, delivered in any one
year through a blend of SOP, PSP and
MSP awards. In 2012, awards were
made under the PSP and the MSP; no
awards were made under the SOP.
Excluding post employment and non-
monetary benefits, the proportion of total
direct remuneration provided by way of
variable at risk components, assuming
maximum levels of performance, as at
31 December 2012 for the Chief Executive
and other senior executives was between
45 and 69 per cent. The actual proportion
of total direct remuneration provided
by way of variable performance related
components (including proportion of
options) will differ from these percentages
depending on measured Company and
individual performance and the current
blend of share plans.
50
Energy Resources of Australia Ltd | Financial Report 2012
Base salary
Bonus Deferral plan
Base salary is set at a level consistent
with market expectations within the
wider Rio Tinto remuneration framework
and may be delivered as a mix of cash
and prescribed non-financial benefits.
It is targeted broadly at the median of
companies of similar size, global reach
and complexity, including other large
natural resource companies. Base salary is
reviewed annually and adjusted taking into
account the individual and Company
performance, global economic conditions,
role responsibilities, an assessment against
comparator groups, internal relativities
and base salary budgets applying to the
broader Rio Tinto employee population.
Short term incentive plan
The short term incentive plan provides
a bonus opportunity and is designed
to support the overall remuneration
policy by focusing management personnel
on calendar year performance against
challenging individual and business targets.
Short term incentive
performance conditions
Individual performance is reviewed
against relevant targets and objectives
annually. All senior executives of the
Company have between 40 and 70 per
cent of their performance based bonus
based on business measures with the
remainder based on individual measures.
The short term incentive plan bonus
payments disclosed in this report
are amounts paid in 2012 relating to
performance in 2011.
The Company’s business performance
measures for 2011 used in the
determination of short term incentive plan
payments were:
•
Financial – ERA net earnings and
cashflow.
• Health and safety – ERA All Injury
Frequency Rate, Semi Quantitative
Risk Assessments and closure rates
of Significant Potential Incidents.
•
Business – ERA drummed
production, quantity of pond water
treated, completion of four metre
Tailings Storage Facility lift and
quantity of material moved.
In 2011, 10 per cent of the Chief
Executive’s short term incentive plan
bonus paid for service in 2010 was
satisfied through the deferred award of
shares in Rio Tinto Limited under the
terms of the Rio Tinto Bonus Deferral
Plan (BDP).
In 2012, 25 per cent of the Chief
Executive’s short term incentive plan
bonus pay was satisfied through the
deferred award of shares in Rio Tinto
Limited under the terms of the Rio
Tinto BDP.
The same percentage will be satisfied
in 2013 through the deferred award of
shares in Rio Tinto Limited under the
terms of the Rio Tinto BDP.
Long term incentive plans
In 2012, the Company’s Remuneration
Committee considered the application of
the Rio Tinto long term incentive plans
to the Company’s senior executives. As
previously outlined, the Remuneration
Committee believes that the general
application of the Rio Tinto remuneration
framework (including the Rio Tinto long
term incentive plans) to ERA’s senior
executives with appropriate review by
the Remuneration Committee, is of
benefit to the Company. As such the
Remuneration Committee recommended
that the Company’s long term incentive
plans remain unchanged for 2012 and
2013 (subject to any changes that may
be made to the plans by Rio Tinto during
2013). During 2013, the Remuneration
Committee will review the position for
future years.
Share based remuneration
dependent on performance
Rio Tinto Share Option Plan
An annual grant of options to purchase
shares (in Rio Tinto Limited or Rio Tinto
plc, determined by the employee’s
contractual employing entity) in the
future at current market prices may be
made by Rio Tinto to eligible senior
management personnel.
at what level. In arriving at a decision, the
Rio Tinto Remuneration Committee takes
into consideration Group remuneration
approaches, individual performance as
well as local remuneration practice.
Under the SOP, options are granted to
purchase shares at an exercise price
based on the share price at time of grant.
No options are granted at a discount
and no amount is paid or payable by the
recipient upon grant of the options.
No options under the SOP become
exercisable unless Rio Tinto has met
stretching performance conditions. In
addition, before approving any vesting
and regardless of performance against
the respective performance conditions,
the Rio Tinto Remuneration Committee
retains discretion to satisfy itself that Rio
Tinto’s Total Shareholder Return (TSR)
performance is a genuine reflection of
value available to shareholders. Under
the SOP, vesting is subject to Rio Tinto’s
TSR equalling or outperforming the
HSBC Global Mining Index over a three
year performance period.
The HSBC Global Mining Index covers
the mining industry globally. If TSR
performance equals the index (threshold
performance) then awards of up to
20,000 options or one-third of the award
(whichever is greater) will vest. The full
grant may vest if the TSR performance
is equal to or greater than the HSBC
Global Mining Index plus five per cent per
annum. Between these points, options
may vest on a sliding scale, with no
options becoming exercisable for a three
year TSR performance below the index.
Options will lapse if they do not vest
at the conclusion of the three year
performance period. Prior to any
options vesting, the Rio Tinto Group’s
performance against the criteria relevant
to the SOP is calculated independently
by Towers Watson, global financial
services provider. If Rio Tinto was subject
to a change of control or a company
restructuring, options would vest subject
to the satisfaction of the performance
condition measured at the time of the
takeover or restructuring.
Each year, the Rio Tinto Remuneration
Committee considers whether a grant of
options should be made under the Rio
Tinto Share Option Plan (SOP) and, if so,
Depending on the circumstances, the Rio
Tinto Remuneration Committee has the
discretion to adjust the performance condition
to ensure a fair measure of performance.
Energy Resources of Australia Ltd | Financial Report 2012
51
for senior executives employed from the
Rio Tinto plc group. In 2012, the Rio Tinto
Remuneration Committee approved and
implemented a new global employee
share purchase plan. The new plan
has been offered to eligible employees.
Under the plan, employees may acquire
shares up to the value of US$5,000 per
year capped at 10% of their base salary.
Each share purchased will be matched
by the Company providing the participant
holds the shares and remains employed
at the end of the three year vesting
period. Further details are at Note 32 to
the Financial Statements.
Share dealing policy
The participation of senior executives
in the Rio Tinto share plans involving
the awarding of Rio Tinto securities
at a future date, and any grants of
shares and options under these plans,
is subject to and conditional upon
compliance with the terms of the ‘Rules
for dealing in securities of Rio Tinto, its
subsidiary and associated companies’
(“Rules for dealing”). The Rules for
dealing expressly prohibit the limiting of
exposure to economic risk in relation to
such securities, and are available on the
Rio Tinto website at www.riotinto.com.
Directors’ Report
In the case of an acquisition, the Rio
Tinto Remuneration Committee may at
its discretion and with the agreement of
participants determine that options will be
replaced by equivalent new options over
shares in the acquiring company.
If a performance period is deemed to
end during the first 12 months after the
options were granted, the grant will be
reduced pro rata.
Where an option holder dies in service,
subsisting option grants vest immediately,
regardless of whether the performance
conditions have been satisfied. The
estate will have 12 months in which to
exercise the options.
SOP options may be exercised within ten
years of initial grant, and upon exercise
may be satisfied by Rio Tinto through the
transfer of treasury shares, the issue of
new shares or the purchase of shares in
the market.
the conditional awards would only
vest subject to the satisfaction of the
performance condition measured
at the time of the change of control
or restructuring. The Rio Tinto
Remuneration Committee has discretion
to adjust the performance condition to
ensure a fair measure of performance.
Additionally, if a performance period is
deemed to end during the first 12 months
after the conditional award is made, that
award will be reduced pro-rata.
Rio Tinto releases awards to participants
as either Rio Tinto plc or Rio Tinto
Limited shares or as an equivalent
amount in cash. Awards may, upon
vesting, be satisfied by Rio Tinto through
the transfer of treasury shares, the issue
of new shares or the purchase of shares
in the market.
Share based remuneration not
dependent on performance
Performance Share Plan
Rio Tinto Management Share Plan
Rio Tinto’s Performance Share Plan
(PSP) provides a conditional right
to Rio Tinto shares to eligible senior
management personnel within the
Rio Tinto Group, including the senior
executives of the Company.
The conditional awards only vest if
the performance condition set by the
Rio Tinto Remuneration Committee
is satisfied by Rio Tinto, although the
Rio Tinto Remuneration Committee
retains discretion to satisfy itself that
satisfaction of the performance condition
is a genuine reflection of the underlying
performance of the business. Prior
to the vesting of conditional awards,
Rio Tinto’s TSR performance against
the performance condition is calculated
independently by Towers Watson.
Subject to Rio Tinto Remuneration
Committee approval, awards vest
based on the Rio Tinto Group’s TSR
performance against the Morgan Stanley
Capital World Index (50 per cent) and
the HSBC Global Mining Index (50 per
cent), reviewed as at 31 December of
the fourth year of the grant. The level of
vesting depends on performance against
the indices.
If Rio Tinto was subject to a change
of control or a company restructuring,
Under the Rio Tinto Management Share
Plan (MSP), conditional grants of Rio
Tinto shares may be awarded to eligible
senior executives of the Company which
will vest, wholly or partly, upon expiry
of a three year vesting period. Rio
Tinto shares to satisfy the vesting are
purchased by Rio Tinto in the market.
Award levels under the MSP are at the
discretion of Rio Tinto.
In the case of a change of control,
awards vest on the date of the change of
control, but the award may be reduced
pro rata to reflect the acceleration of
vesting. Prior to the change of control,
and with the consent of the acquiring
company, the shares can be converted
to shares in the acquirer. After a change
of control, this can only be achieved with
the consent of the employee.
Other Share Plans
The senior executives of the Company,
together with all employees of the
Company, may participate in Rio Tinto
share savings and share option plans
applicable at particular locations. Up to
and including 2011, these include the
Rio Tinto Limited share savings plan for
senior executives employed from the
Rio Tinto Limited group of companies
and the Rio Tinto plc share savings plan
52
Energy Resources of Australia Ltd | Financial Report 2012
D Details of remuneration
Details of the remuneration of each non-executive and executive Director and each of the other senior executives in respect of their
services to the Company and the consolidated entity are set out in the following tables.
Non-executive directors of Energy Resources of Australia Ltd
SHORT TERM BENEfITS
pOST EMpLOyMENT BENEfITS
DIRECTORS
fEES
($000)
CASH
BONUS
($000)
NON- CASH
BENEfITS
($000)
SUpER-
ANNUATION
($000)
TOTAL
($000)
D Klingner
H Garnett
P Taylor1
J Pegler
P McMahon2
H Newell1,3
M Coulter1,4
Total 2012
Total 2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
175
175
110
110
90
90
103
103
12
-
10
-
80
90
580
568
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16
16
10
10
-
-
9
9
1
-
-
-
-
-
36
35
191
191
120
120
90
90
112
112
13
-
10
-
80
90
616
603
Note 1 Amounts paid directly to Rio Tinto Limited.
Note 2 Appointed as a Director on 20 November 2012
Note 3 Appointed as a Director on 20 November 2012.
Note 4 Resigned as a Director on 20 November 2012.
Energy Resources of Australia Ltd | Financial Report 2012
53
Implement business improvement
programmes to generate sustainable
business value and operating
performance improvement for ERA;
and
individual advisors, was 45 per cent of
base salary. The eventual value of the
award will depend on performance during
the period 2012 to 2015.
Directors’ Report
Executive Director and other
key management personnel of
the consolidated entity
•
Set out below is an overview of the
remuneration paid to the executive
director and other key management
personnel in 2012. This includes details
of the key elements of remuneration
and a summary of total remuneration
for 2012.
Rob Atkinson (Chief Executive)
Base salary
Mr Atkinson’s base salary is reviewed
annually, with reference to the underlying
performance of ERA, the Rio Tinto
Group and Mr Atkinson, global economic
conditions, role responsibility, an
assessment against relevant comparator
groups, internal relativities and base
salary budgets applying to the broader
Rio Tinto employee population.
On 1 March 2012, Mr Atkinson’s base
salary was increased by six percent to
$399,094 (1 March 2011: $376,504).
Having regard to the present economic
conditions and the financial and
operational performance of ERA,
Mr Atkinson recommended to the
Remuneration Committee that there be
no increase in his base salary, and that
of the other key management personnel,
in 2013. The Remuneration Committee
accepted this recommendation.
STIP Objectives
The STIP cash payment made to Mr
Atkinson and other key management
personnel in 2012 was determined
by assessing individual and business
performance against objectives set
for 2011.
The following individual objectives were
set for Mr Atkinson for 2011 were:
Improve employee engagement and
diversity at ERA;
Enhance ERA’s relationships with
stakeholders and improve ERA’s
health and safety performance;
Revise ERA’s strategic plan to
maximise value from the Ranger
Project Area;
•
•
•
54
• Revise ERA’s process and pond
water management strategy.
STIP outcomes
Mr Atkinson’s achievement against his
2011 personal objectives was assessed
as very good. In particular:
•
•
•
•
•
•
•
at the end of 2011, ERA was one of
the leading employers of Indigenous
people in the Northern Territory with
an Indigenous employee rate of 17%
and female employment rate of 22%;
despite the challenging conditions in
2011, ERA achieved a world class
two million hours without a lost
time injury and a record All Injury
Frequency Rate of 0.57;
ERA completed a Feasibility Study
on the construction of a brine
concentrator to treat process water at
the Ranger Project Area, which the
Board approved in February 2012 at
an estimated cost of $220 million;
a four metre lift to the Tailings Storage
Facility was completed in November
2011 safely, on time and on budget;
the construction of the Ranger 3
Deeps exploration decline, to further
explore the Ranger 3 Deeps mineral
resource, was approved in August
2011;
the company successfully raised
approximately $500 million through
an underwritten accelerated
renounceable entitlement offer to fund
its strategic initiatives; and
the company undertook a business
wide review which identified targeted
cumulative cost savings of $150
million by the end of 2014.
LTIP awards granted
Award levels are set so as to incentivise
executives to provide sufficient retention
for the executive team and to contribute
to the competitiveness of the overall
remuneration package. The value of
the awards granted in 2012, based on
the fair value calculations performed by
Energy Resources of Australia Ltd | Financial Report 2012
Total remuneration
The table below provides a summary of the Chief Executive’s total remuneration disclosed for the years of 2010, 2011 and 2012.
The purpose of this table is to enable shareholders to better understand the actual remuneration received and to provide an overview
of the actual outcomes of the Group’s remuneration arrangements. The remuneration details set out on page 58 include theoretical
accounting values relating to various parts of the remuneration packages, most notably long term incentive plan arrangements.
Accordingly, the numbers below are not compatible with those in the table on page 58.
(STATED IN $’000)
Base salary paid1
STIP cash bonus
STIP deferred shares2
LTIP share based payments
Superannuation
Other benefits3
Total remuneration
% change from previous year
% of maximum STIP cash bonus awarded
% of maximum STIP cash bonus forfeited
2012
396
189
63
223
92
84
1,047
5%
67%
33%
2011
375
208
26
221
89
82
1,001
14%
65%
35%
2010
360
153
-
188
86
80
867
N/A
62%
38%
Note 1 Salary paid in financial year to 31 December. Salaries are reviewed with effect from 1 March.
Note 2 Value of deferred share awards granted under Bonus Deferral Plan.
Note 3 Other benefits include relocation, accommodation, travel vehicle and other allowances and other employment related benefits.
key management personnel (other than the Chief Executive)
Base salary
Base salaries are reviewed annually, with reference to the underlying performance of ERA, Rio Tinto Group and the individual; global
economic conditions, role responsibility, an assessment against relevant comparator groups and base salary budgets applying to the
broader Rio Tinto employee population.
At the end of 2011 and 2012, the base salaries of the Company’s key management personnel (other than the Chief Executive) were
as follows:
BASE SALARy A’$000 (UNLESS OTHERWISE SpECIfIED)
Steeve Thibeault
Tim Eckersley1
Greg Sinclair
Alan Tietzel
Dan Janney2
Chris Tziolis3
Peter Eaglen4
20125
312
305
290
341
US238
262
247
2011
300
-
273
324
US211
246
247
% CHANGE
4%
-
6%
5%
13%
7%
-
Note 1 Tim Eckersley’s employment with ERA commenced on 10 September 2012.
Note 2 Dan Janney’s employment with ERA ended on 22 August 2012.
Note 3 Chris Tziolis’ employment with ERA ended on 5 October 2012.
Note 4 Peter Eaglen’s employment with ERA ended on 31 January 2012.
Note 5 Where key management peronnel’s employment with ERA ended during the year, the base salary reflects the amount at the date employment ceased.
As outlined above, having regard to the present economic conditions and the financial and operational performance of ERA, the
Remuneration Committee has accepted management’s recommendation that there be no increase in the base salary for the
Company’s key management personnel in 2013.
Energy Resources of Australia Ltd | Financial Report 2012
55
Directors’ Report
STIP objectives and outcomes
SUMMARy Of INDIVIDUAL OBJECTIVES
Steeve Thibeault
Greg Sinclair
Alan Tietzel
Dan Janney
Chris Tziolis
peter Eaglen
Implementation of initiatives identified in business review.
• Development of ERA long term funding plan.
•
• Enhance ERA’s compliance framework and systems.
•
Identification of cost saving initiatives through ERA’s Leaning on Costs programme.
• Completion of Brine Concentrator pilot plant trials.
• Commencement of closure prefeasibility study.
•
• Optimise extraction and plant throughput for processing of low grade ore.
Identification of cost saving initiatives through ERA’s Leaning on Costs programme.
•
Improve relationship with Traditional Owners.
• Enhance engagement with ERA’s stakeholders.
•
Identification of cost saving initiatives through ERA’s Leaning on Costs programme.
Identification of cost saving initiatives through ERA’s Leaning on Costs programme.
Improve health and safety at Ranger Mine through implementation of various initiatives.
• Completion of four metre Tailings Storage Facility lift by 1 December 2011.
•
•
• Attraction and retention of employees.
• Reduction in waste hydrocarbon inventory at Ranger Mine.
• Revise ERA’s strategic plan to realise maximum value from the Ranger Project Area.
•
Conduct review of the business to ensure focused on most strategically important and value
enhancing activities.
• Establish governance framework for ERA’s major projects.
•
•
•
•
Co-ordinate the preparation and submission of the Environmental Impact Statement for the Ranger
Heap Leach Project.
Provide support for and assist with environmental approvals for various projects including the
Tailings Storage Facility lift; Tailings Storage Facility Working Group and rehabilitation trials for Land
Application Areas.
Identification of cost saving initiatives through ERA’s Leaning on Costs programme.
Integration of EWL Sciences Pty Ltd personnel into ERA’s Environmental Strategy team.
A summary of the individual targets and performance scores for each of the Company’s key management personnel (other than the
Chief Executive) is set out in the table below.
MEASURES
Steeve Thibeault
Financial performance
Business performance
Health and Safety
Individual
Total
Greg Sinclair
Financial performance
Business performance
Health and Safety
Individual
Total
Alan Tietzel
Financial performance
Business performance
Health and Safety
Individual
Total
56
WEIGHT
(%)
SCORE
(OUT Of 200%)
WEIGHTED
SCORE
(%)
12.0
18.0
10.0
60.0
100.0
12.0
18.0
10.0
60.0
100.0
12.0
18.0
10.0
60.0
100.0
100.0
100.0
181.1
145.0
-
100.0
100.0
181.1
138.0
-
100.0
100.0
181.1
135.0
-
12.0
18.0
18.1
87.0
135.1
12.0
18.0
18.1
82.8
130.9
12.0
18.0
18.1
81.0
129.1
Energy Resources of Australia Ltd | Financial Report 2012
Chris Tziolis
Financial performance
Business performance
Health and Safety
Individual
Total
Dan Janney
Financial performance
Business performance
Health and Safety
Individual
Total
peter Eaglen
Financial performance
Business performance
Health and Safety
Individual
Total
LTIP awards
12.0
18.0
10.0
60.0
100.0
12.0
18.0
10.0
60.0
100.0
12.0
18.0
10.0
60.0
100.0
100.0
100.0
181.1
121.8
-
100.0
100.0
181.1
150.6
-
100.0
100.0
181.1
132
-
12.0
18.0
18.1
73.1
121.2
12.0
18.0
18.1
90.4
138.5
12.0
18.0
18.1
79.2
127.3
Award levels are set so as to incentivise executives to provide sufficient retention for the executive team and to contribute to the
competitiveness of the overall remuneration package. The value of the awards granted in 2012, based on the fair value calculations
performed by independent advisors, was between 22.5 per cent and 30 per cent of base salary. The eventual value of the award will
depend on performance during the period 2012 to 2015.
Energy Resources of Australia Ltd | Financial Report 2012
57
Directors’ Report
Executive directors and other key management personnel total remuneration
SHORT TERM BENEfITS
pOST
EMpLOyMENT
BENEfITS
SHARE
BASED
pAyMENTS
CASH
SALARy
($000)
CASH
BONUS
($000)
OTHER9
($000)
TERMINATION
pAyMENTS
($000)
SUpER-
ANNUATION
pENSION
($000)
CASH &
EQUITy
SETTLED
($000)
Executive directors
R Atkinson1
Other senior executives
S Thibeault2
T Eckersley3
G Sinclair4
A Tietzel5
D Janney6
C Tziolis7
P Eaglen8
Total 2012
Total 2011
2012
2011
2012
2011
2012
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
396
375
310
239
92
287
272
338
321
185
256
196
243
21
246
1,825
1,952
189
208
101
75
-
89
74
126
120
113
91
76
78
79
71
773
717
84
82
169
124
61
55
107
119
104
58
71
63
108
6
74
615
670
-
-
-
-
-
-
-
-
-
-
-
583
-
-
-
583
-
92
89
69
50
17
63
57
36
47
32
39
19
24
4
68
332
374
245
232
86
80
-
70
68
111
108
74
114
72
45
6
41
664
688
TOTAL
($000)
1,006
986
735
568
170
564
578
730
700
462
571
1,009
498
116
500
4,792
4,401
Note 1 Maximum performance related cash bonus: 67% awarded in 2012, 33% forfeited. 65% awarded in 2011, 35% forfeited.
Note 2 Maximum performance related cash bonus: 68% awarded in 2012, 32% forfeited. 67% awarded in 2011, 33% forfeited
Note 3 Appointed as General Manager Operations on 10 September 2012. No cash bonus is disclosed for 2012 as payments made were in respect of services rendered to
another Rio Tinto entity in 2011.
Note 4 Maximum performance related cash bonus: 65% awarded in 2012, 35% forfeited. 58% awarded in 2011, 42% forfeited.
Note 5
Maximum performance related cash bonus: 65% awarded in 2012, 35% forfeited. 65% awarded in 2011, 35% forfeited.
Note 6
Note 7
Resigned as General Manager Operations on 22 August 2012. Maximum performance related cash bonus: 69% awarded in 2012, 31% forfeited. 60% awarded in
2011, 40% forfeited.
As a result of a restructure of the company’s executive committee, Mr Tziolis’ role with the company was made redundant on 5 October 2012. The termination
payment described above comprised a payment of six months salary in lieu of notice pursuant to the terms of his employment contract, and payments made in
accordance with the company’s redundancy policy which included a service payment, an ex gratia payment, pro rata payment for short term incentive plan bonus
and pro rata vesting of long term incentive plan. Maximum performance related cash bonus: 62% awarded in 2012, 38% forfeited; 68% awarded in 2011, 32%
forfeited.
Note 8
Resigned as General Manager Environmental Strategy on 31 January 2012. Maximum performance related cash bonus: 64% awarded in 2012, 36% forfeited. 62%
awarded in 2011, 38% forfeited.
Note 9 Other benefits includes relocation, accommodation, travel, vehicle and other allowances and other employment related benefits.
The value of share based awards has been determined in accordance with the recognition and measurement requirements of IFRS2
“Share-based Payment”. The fair value of awards granted under the Rio Tinto Share Option Plan, the Rio Tinto Management Share
Plan, the Rio Tinto Bonus Deferral Plan, the Rio Tinto Performance Share Plan and the Rio Tinto Share Savings Plan have been
calculated at their dates of grant using valuation models provided by external consultants Lane Clark and Peacock LLP, including
an independent lattice-based option valuation model and a Monte Carlo valuation model which takes into account the constraints on
vesting and exercise attached to these awards. Any grants to non-executive Directors under long term incentive share plan schemes
do not relate to remuneration for services provided to the Company.
58
Energy Resources of Australia Ltd | Financial Report 2012
E Executive service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. These
agreements provide for participation in the Rio Tinto short and long term incentive plans upon achieving performance and service
goals. The agreements may also provide for other benefits, including: medical insurance; vehicle and accommodation allowances;
relocation allowances and expenses and travel allowances.
Key management personnel will also be entitled to a range of pre-existing redundancy entitlements, depending on the business and
region from where they were originally employed within the Rio Tinto Group:
• Notice may be worked or fully or partly paid in lieu, at ERA’s discretion;
•
•
•
•
•
Additional capped service related payments may apply;
Pro rata short term incentive plan payments may be paid based on the proportion of the performance period worked;
Long term incentive plan benefits may be paid or vest to the extent provided by the relevant plan;
Share options or conditional share awards held for less than 12 months at date of termination may be reduced pro-rata;
There is no contractual entitlement to payments in the event of a change of control; and
• Other major provisions of the agreements relating to remuneration are set out below.
R Atkinson – Chief Executive
Term of agreement – Open, commenced 8 September 2008
Base salary (excluding superannuation, allowances and other benefits) as at 31 December 2012 of $399,094 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 100 per cent of base salary. Base salary and short term incentive
targets are to be reviewed annually. Termination by the employee is three months notice in writing or by the employer giving six
months notice or equivalent payment in lieu of notice.
S Thibeault – Chief Financial Officer
Term of agreement – 1 December 2012 – 31 March 2015
Base salary (excluding superannuation, allowances and other benefits) as at 31 December 2012 of $311,850 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 50 per cent of base salary. Base salary and short term incentive
targets to be reviewed annually. Termination by the employee is three months notice in writing or by the employer giving six months
notice or equivalent payment in lieu of notice.
T Eckersley – General Manager Operations
Term of agreement – Open, commenced 10 September 2012
Base salary (excluding superannuation, allowances and other benefits) as at 31 December 2012 of $305,000 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 60 per cent of base salary. Base salary and short term incentive
targets to be reviewed annually. Termination by the employee is three months notice in writing or by the employer giving six months
notice or equivalent payment in lieu of notice.
G Sinclair – General Manager Technical projects
Term of agreement – Open, commenced 1 May 2007.
Base salary (excluding superannuation, allowances and other benefits) as at 31 December 2012 of $289,556 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 50 per cent of base salary. Base salary and short term incentive
targets to be reviewed annually. Termination by the employee is one months notice in writing or by the employer giving three months
notice or equivalent payment in lieu of notice.
Energy Resources of Australia Ltd | Financial Report 2012
59
Directors’ Report
A Tietzel – Chief Advisor Agreements
Term of agreement – Open, commenced 1 October 2010
Base salary (excluding superannuation, allowances and other benefits) as at 31 December 2012 of $340,587 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 60 per cent of base salary. Base salary and short term incentive
targets to be reviewed annually. Termination by the employee is three months notice in writing or by the employer giving six months
notice or equivalent payment in lieu of notice.
D Janney – General Manager Operations
Commenced 1 April 2009 and resigned 22 August 2012
Base salary (excluding superannuation, allowances and other benefits) as at 22 August 2012 of US$237,900 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 80 per cent of base salary. Base salary and short term incentive
targets to be reviewed annually. Termination by the employee is one months notice in writing or by the employer giving three months
notice or equivalent payment in lieu of notice.
C Tziolis – Chief Development Officer
Commenced 1 October 2010 and ended 5 October 2012
Base salary (excluding superannuation, allowances and other benefits) as at 5 October 2012 of $261,852 per annum. Maximum short
term incentive bonus upon meeting performance criteria is 50 per cent of base salary. Base salary and short term incentive targets to
be reviewed annually. Termination by the employee is three months notice in writing or by the employer giving six months notice or
equivalent payment in lieu of notice.
p Eaglen – General Manager Environmental Strategy
Commenced 1 June 2010 and resigned 31 January 2012
Base salary (excluding superannuation, allowances and other benefits) as at 31 January 2012 of $247,250 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 50 per cent of base salary. Base salary and short term incentive
targets to be reviewed annually. Termination by the employee is three months notice in writing or by the employer giving six months
notice or equivalent payment in lieu of notice.
60
Energy Resources of Australia Ltd | Financial Report 2012
F Share based compensation
Rio Tinto Share Option plan
Details of the costs of the share based payment plans applied by the Company are provided at Note 32 of the Financial Statements.
Options under the SOP are granted at the discretion of the Rio Tinto Remuneration Committee in line with Rio Tinto guidelines.
The terms and conditions of each grant of options affecting remuneration in this or future reporting periods are as follows:
GRANT DATE
RIO TINTO LIMITED
13/03/2002
7/03/2003
22/04/2004
9/03/2005
7/03/2006
13/03/2007
10/03/2008
17/03/2009
RIO TINTO pLC
13/03/2002
7/03/2003
22/04/2004
9/03/2005
7/03/2006
13/03/2007
10/03/2008
17/03/2009
EXERCISE
pRICE
(pRE RIGHTS
ISSUE)
EXERCISE
pRICE
(pOST RIGHTS
ISSUE)
VALUE pER
OpTION AT
GRANT DATE
EXpIRy
DATE
13/03/2012
7/03/2013
22/04/2014
9/03/2015
7/03/2016
13/03/2017
10/03/2018
17/03/2019
13/03/2012
7/03/2013
22/04/2014
9/03/2015
7/03/2016
13/03/2017
10/03/2018
17/03/2019
$
39.87
33.33
34.41
47.04
71.06
74.59
134.18
49.56
£
14.59
12.63
13.29
18.26
27.11
27.01
57.23
20.01
$
23.76
17.23
18.30
30.93
54.95
58.48
118.07
33.45
£
12.05
10.43
10.98
15.09
22.40
22.32
47.28
16.53
$
13.71
6.68
6.17
8.93
17.09
14.23
44.04
13.36
£
4.99
2.97
2.81
4.09
7.40
6.17
20.63
6.62
VALUE pER
OpTION
pOST RIGHTS
ISSUE
$
EARLIEST
EXERCISE
DATE
13.71
13/03/2005
6.68
6.18
8.93
17.09
14.23
44.04
13.36
£
4.12
2.46
2.33
3.38
6.11
5.10
17.04
8.29
7/03/2006
22/04/2007
9/03/2008
7/03/2009
13/03/2010
10/03/2011
17/03/2012
13/03/2005
7/03/2006
22/04/2007
9/03/2008
7/03/2009
13/03/2010
10/03/2011
17/03/2012
Energy Resources of Australia Ltd | Financial Report 2012
61
Directors’ Report
Rio Tinto performance Share plan
Share awards under the Rio Tinto Performance Share Plan are granted at the discretion of the Rio Tinto Remuneration Committee
in line with Rio Tinto guidelines. The terms and conditions of each right to Rio Tinto Limited or Rio Tinto plc shares affecting
remuneration in this or future reporting periods are as follows:
AWARD DATE
RIO TINTO LIMITED
13 March 2007
22 March 2010
21 March 2011
19 March 2012
RIO TINTO pLC
13 March 2007
22 March 2010
21 March 2011
19 March 2012
MARkET pRICE
AT AWARD
pERfORMANCE
pERIOD ENDS
MARkET pRICE AT
31 DECEMBER 2012
$74.50
$75.03
$81.00
$65.85
£26.81
£37.30
£40.58
£36.14
31 December 2010
31 December 2013
31 December 2014
31 December 2015
31 December 2010
31 December 2013
31 December 2014
31 December 2015
$66.01
$66.01
$66.01
$66.01
£35.12
£35.12
£35.12
£35.12
Note * Vesting dependent upon continued employment with a Rio Tinto Group company.
No conditional awards of either Rio Tinto plc or Rio Tinto Limited shares were made as remuneration for key management personnel
of the consolidated entity under the PSP in 2008 and 2009, although adjustments were made to PSP balances following the
Rio Tinto rights issue. The Rio Tinto Remuneration Committee reviewed the performance condition applicable to the conditional
award and confirmed that vesting will be dependent on Rio Tinto’s TSR relative to the designated comparator mining companies.
Rio Tinto Management Share plan
Share awards under the Rio Tinto Management Share Plan are granted at the discretion of the Rio Tinto Remuneration Committee
in line with Rio Tinto guidelines. The terms and conditions of each right to Rio Tinto Limited or Rio Tinto plc shares affecting
remuneration in this or future reporting periods are as follows:
AWARD DATE
RIO TINTO LIMITED
17 March 2009
22 March 2010
21 March 2011
19 March 2012
RIO TINTO pLC
17 March 2009
22 March 2010
21 March 2011
19 March 2012
MARkET pRICE
AT AWARD
pERfORMANCE
pERIOD ENDS
pRICE AT
31 DECEMBER 2012
$47.60
$75.03
$81.00
$65.85
£19.82
£37.30
£40.58
£36.14
31 December 2011
31 December 2012
31 December 2013
31 December 2014
31 December 2011
31 December 2012
31 December 2013
31 December 2014
$66.01
$66.01
$66.01
$66.01
£35.12
£35.12
£35.12
£35.12
Note * Vesting dependent upon continued employment with a Rio Tinto Group company.
62
Energy Resources of Australia Ltd | Financial Report 2012
Rio Tinto Bonus Deferral plan and Company Contributed Award
Share awards under the Rio Tinto Bonus Deferral Plan and Rio Tinto Company Contributed Award are granted at the discretion of
the Rio Tinto Remuneration Committee in line with Rio Tinto guidelines. The terms and conditions of each right to Rio Tinto Limited
shares affecting remuneration in this or future reporting periods are as follows:
AWARD DATE
RIO TINTO LIMITED
BONUS DEfERRAL pLAN
17 March 2009
21 March 2011
19 March 2012
RIO TINTO LIMITED
COMpANy CONTRIBUTED AWARD
17 March 2009
MARkET pRICE
AT AWARD
VESTING DATE*
pRICE AT
31 DECEMBER 2012
$52.01
50% 31 December 2010
50% 31 December 2011
$81.00
$65.85
100% 1 December 2013
100% 1 December 2014
$52.01
50% 31 December 2010
50% 31 December 2011
-
-
$66.01
$66.01
-
-
Note * Vesting dependent upon continued employment with a Rio Tinto Group company.
Share based compensation – Rio Tinto employee share schemes
The Directors and key management personnel of the Company who elected to participate in the Rio Tinto employee share schemes
as at 31 December 2012 are set out below:
P Taylor
R Atkinson
T Eckersley
A Tietzel
D Janney
2009 Rio Tinto Limited scheme commencing 1 January 2010
2011 Rio Tinto Limited scheme commencing 1 January 2012
2010 Rio Tinto Limited scheme commencing 1 January 2011
2008 Rio Tinto Limited scheme commencing 1 January 2009
2009 Rio Tinto plc scheme commencing 15 December 2009
2010 Rio Tinto plc scheme commencing 1 January 2010
2011 Rio Tinto plc scheme commencing 1 December 2011
Energy Resources of Australia Ltd | Financial Report 2012
63
Directors’ Report
Equity instrument disclosures relating to Directors and key management personnel
Options provided as remuneration
Details of options over ordinary shares in Rio Tinto Limited and Rio Tinto plc held during the year and provided as remuneration to the
key management personnel of the consolidated entity in respect of their service to ERA are set out below. When exercisable, each
option is convertible into one ordinary share of Rio Tinto Limited or Rio Tinto plc.
BALANCE AT
START Of
THE yEAR OR
ON JOINING3
GRANTED
AS REMUN-
ERATION
EXERCISED
DURING THE
yEAR
OTHER
CHANGES2
VESTED &
EXER-
CISABLE
UNVESTED
BALANCE AT END
Of THE yEAR2
RIO TINTO pLC
key management personnel
S Thibeault
D Janney
RIO TINTO LIMITED
Executive directors
R Atkinson
2012
2011
2012
2011
2012
2011
key management personnel
G Sinclair
A Tietzel
C Tziolis
2012
2011
2012
2011
2012
2011
Non-executive directors1
P Taylor
M Coulter
2012
2011
2012
2011
1,186
1,186
2,033
2,033
2,168
3,950
760
1,998
4,495
4,495
396
396
15,407
18,209
11,268
13,792
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,782)
760
(1,238)
-
-
-
-
(2,420)
(2,802)
(2,259)
(2,524)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,186
-
2,033
-
2,168
-
-
-
4,495
3,275
396
-
12,987
12,978
9,009
9,473
-
1,186
-
2,033
-
2,168
-
760
-
1,220
-
396
-
2,429
-
1,795
Note 1 Changes to balances for non-executive Directors do not relate to remuneration for services provided to the Company.
Note 2 Other changes and end of year balance include changes made in relation to awards for service within the wider Rio Tinto Group, including before joining or after
ceasing with ERA, and forfeited options where conditions were not met. Where a KMP left prior to the end of the year, the balance reflects the holding at the time of
resignation.
Note 3 Where a KMP joined during the year, balance at start of the year reflects holdings at time of commencement with ERA.
64
Energy Resources of Australia Ltd | Financial Report 2012
Details of remuneration: Share options
For each grant of options included in the table on page 64, the percentage of the available grant that was paid, or that vested, in 2012,
and the percentage that was forfeited because the service and performance criteria were not met, is set out below. The options vest
after three years, provided the vesting conditions are met (see page 51). No options will vest if the conditions are not satisfied hence
the minimum value of the options yet to vest is nil. The maximum value of the options yet to vest has been determined as the amount
of the grant date fair value of the options that is yet to be expensed.
OpTIONS
VESTING
DATE
VESTED
%
fORfEITED
%
MAXIMUM
TOTAL
VALUE Of
UNVESTED
GRANT
$
fUTURE
VESTING
TITLE
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2011
100%
-
100%
-
100%
-
100%
-
100%
-
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
-
-
-
-
-
-
-
-
-
-
-
-
RIO TINTO pLC
S Thibeault
D Janney
RIO TINTO LIMITED
R Atkinson
G Sinclair
A Tietzel
C Tziolis
P Eaglen
Energy Resources of Australia Ltd | Financial Report 2012
65
Directors’ Report
Conditional awards provided as remuneration
Performance Share Plan; Management Share Plan; Bonus Deferral Plan; Companies Contributed Award
No conditional awards of ordinary shares of either ERA or of Rio Tinto Limited or Rio Tinto plc were provided during the year as
remuneration for services provided to ERA to any of the non-executive Directors of the parent entity.
Details of conditional awards of ordinary shares in Rio Tinto Limited and Rio Tinto plc held during the year and provided as
remuneration to each of the key management personnel of ERA in respect of their duties as officers of the company are set out below.
When exercisable, each award converts into one ordinary share of Rio Tinto Limited or Rio Tinto plc.
BALANCE
AT START
Of THE
yEAR
OR ON
JOINING2
GRANTED
AS REMUN-
ERATION
CRySTALLISATION
Of pRIOR AWARD
VESTED
LApSED
AWARDS
CAN-
CELLED
OTHER
CHANGES3
BALANCE
AT END
Of THE
yEAR3
RIO TINTO pLC
key management personnel
S Thibeault
D Janney
RIO TINTO LIMITED
Executive directors
R Atkinson
2012
2011
2012
2011
5,440
4,740
7,890
7,829
2012
2011
11,708
12,016
key management personnel
S Thibeault
T Eckersley
G Sinclair
A Tietzel
C Tziolis
P Eaglen
Non-executive directors1
P Taylor
H Newell
M Coulter
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2012
2011
-
-
3,176
-
3,259
3,794
5,214
6,115
2,270
1,587
1,869
986
9,802
12,268
6,296
13,235
9,250
79
1,486
2,153
2,047
5,001
3,493
1,339
-
-
-
1,030
987
1,619
1,565
960
884
-
883
-
-
-
-
-
(1,996)
(786)
(2,983)
(1,316)
-
-
-
(670)
(2,828)
(3,087)
-
(714)
-
-
-
-
(989)
(1,040)
(1,591)
(1,685)
(516)
(201)
-
-
(2,617)
(4,474)
-
(1,601)
(1,686)
-
-
-
-
-
(482)
-
(781)
(834)
-
-
-
-
(1,281)
-
-
(778)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,882
3,289
-
4,674
6,449
3,523
5,440
7,060
7,890
13,881
11,708
1,339
-
3,176
-
3,300
3,259
5,242
5,214
1,880
2,270
1,869
1,869
11,067
9,802
6,296
16,308
13,235
Note 1 Changes to balances for non-executive Directors do not relate to remuneration for services provided to ERA.
Note 2 Where a KMP joined during the year, balance at start of the year reflects holdings at time of commencement with ERA.
Note 3 Other changes and end of year balance include changes made in relation to awards for service within the wider Rio Tinto Group, including before joining or after
ceasing with ERA, and Rio Tinto Rights Issue adjustments to accrued balances. When a KMP left prior to the end of the year, the balance reflects holdings at the date
of resignation.
66
Energy Resources of Australia Ltd | Financial Report 2012
Shareholdings
The number of shares held in Energy Resources of Australia Ltd or Rio Tinto Limited during the financial year by each Director of
Energy Resources of Australia Ltd are set out below.
ENERGy RESOURCES Of AUSTRALIA LTD
H Newell
RIO TINTO LIMITED
D Klingner
P Taylor
J Pegler
R Atkinson
P McMahon
H Newell
M Coulter
BALANCE
AT START Of
THE yEAR1
RECEIVED
DURING THE
yEAR ON
EXERCISE Of
OpTIONS
OTHER
CHANGES
DURING
THE yEAR
BALANCE
AT END Of
THE yEAR2
2012
2012
2011
2012
2011
2012
2011
2012
2011
2012
2012
2012
2011
161
29,787
36,787
18,491
11,773
6,331
6,331
888
888
18,405
-
908
908
-
-
-
5,037
2,802
-
-
2,828
2,201
-
-
3,860
2,524
-
-
(7,000)
-
3,916
-
-
(2,828)
(2,201)
-
-
(2,458)
(2,524)
161
29,787
29,787
23,528
18,491
6,331
6,331
888
888
18,405
-
2,310
908
Note 1 Where a Director was appointed during the year, balance reflects holdings at the time of commencement with ERA.
Note 2 Where a Director resigned during the year, balance reflects holdings at time of resignation as a Director of ERA.
G Additional information
further details relating to options
Value of options exercised during the year
G Sinclair
VALUE Of
OpTIONS
EXERCISED
DURING 2012
MARkET
pRICE AT
DATE Of
EXERCISE
15,840
54.29
Loans and other transactions with Directors and other key management personnel
There are no loans with Directors and other key management personnel. Other transactions with Director related entities are disclosed
in Note 24 – related parties.
Energy Resources of Australia Ltd | Financial Report 2012
67
Directors’ Report
Principal activities
The principal activities of the consolidated
entity during the course of the year
consisted of the mining, processing and
sale of uranium.
Dividends
No dividends have been paid by ERA
to members in respect of the 2012
financial year.
Review and results of
operations
Details of ERA’s review and results of
operations are included in the “Chairman
and Chief Executive’s Report” on page
8 and the “Financial performance” and
“Operations” sections at pages 10 and
12, respectively.
Significant changes to the
state of affairs
In the opinion of the Directors, other
than matters reported in the Directors’
Report, and in the Chairman and Chief
Executive’s Report, there were no
significant changes in the state of affairs
of the consolidated entity during the year
ended 31 December 2012.
Matters subsequent
to the end of the financial
year
There has not arisen in the interval
between the end of the year and the
date of this report any item, transaction
or event of a material nature that
has significantly affected or may
significantly affect:
(i) the operations of the consolidated
entity;
(ii) the results of those operations; or
(iii) the state of affairs of the consolidated
entity subsequent to the financial year
ended 31 December 2012.
Likely developments
In the opinion of the Directors, any other
likely developments in the operations
of the consolidated entity known at the
date of this report have been covered
within the Annual Report and Notes to the
Consolidated Financial Statements.
A general review of developments for
ERA is presented in the “Chairman
and Chief Executive’s Report”,
“Major projects” and “Directors’
Outlook” sections.
Further information as to likely
developments in the operations of the
consolidated entity and the expected
results of those operations in subsequent
financial years has not been included
in this report because the Directors
believe, on reasonable grounds, that to
include such information would be likely
to result in unreasonable prejudice to the
consolidated entity.
Annual General Meeting
The 2013 Annual General Meeting will
be held on 10 April 2013 in Darwin, in the
Northern Territory of Australia. Notices of
the 2013 Annual General Meeting are set
out in separate letters to the shareholders
of the Company.
Indemnification
Clause 11 of the Company’s constitution
provides that every Director, manager,
officer or employee of the Company shall
be indemnified out of the funds of the
Company against all liability incurred by
them in defending any proceedings in
which they are successful.
The Corporations Act 2001 prohibits a
company from indemnifying Directors,
secretaries, executive officers and
auditors from liability except for liability
to a party, other than the Company or
a related body corporate, where the
liability does not arise out of conduct
involving a lack of good faith and except
for liability for costs and expenses
incurred in defending proceedings in
which the officer or auditor is successful.
An indemnity for officers or employees
who are not Directors, secretaries or
executive officers, is not expressly
prohibited by the Corporations Act 2001.
The Directors and secretaries of the
Company, and all former Directors and
secretaries, have the benefit of the
indemnity in Clause 11 of the Company’s
constitution.
The indemnity also applies to executive
officers of the Company (being the Chief
Financial Officer and General Managers
and other key management personnel
and managers who are concerned with,
or take part in the management of the
Company) as well as other employees.
Insurance
Since the end of the previous financial
year, the Company has paid insurance
premiums in respect of a Directors’ and
officers’ liability policy of insurance.
The policy indemnifies all Directors and
officers of ERA and its controlled entities
(including the Directors, secretaries, and
executive officers referred to above)
against certain liabilities.
In accordance with common commercial
practice, the insurance policy prohibits
disclosure of the nature of the liability
insured against and the amount of
the premium.
The Directors have not included details of
the nature of the liabilities covered or the
amount of the premium paid in respect of
Directors’ and officers’ liability insurance
as such disclosure is prohibited under the
terms of the contract.
Environmental regulation
and policy
ERA strives to be at the forefront
of environmental management in
the uranium industry. It operates in
accordance with relevant Commonwealth
and Northern Territory environmental
legislation as well as site specific
environmental licences, permits
and statutory authorisations. ERA’s
environmental management system is
ISO14001 compliant.
ERA is required to report any incident that
is a divergence from strict compliance with
statutory requirements, even if the incident
has no detrimental environmental impact,
and reports are made to the Minister for
Mines and Energy (Northern Territory);
the Supervising Scientist Division of
the Commonwealth Department of
Sustainability, Environment, Water,
Population and Communities; the Northern
Land Council; the Commonwealth
Department of Resources, Energy and
68
Energy Resources of Australia Ltd | Financial Report 2012
During the year, the following fees were
paid or payable for services provided by
the auditors of the Company, its related
practices and non-audit related firms.
2012
$000
2011
$000
AUDIT SERVICES
PricewaterhouseCoopers
Audit and review of
financial reports
Total
Remuneration for
audit services
Non-audit services
Total
Remuneration
361
350
361
-
361
350
285
635
Information on Auditor
PricewaterhouseCoopers continues in
office in accordance with Section 327 of
the Corporations Act 2001.
A copy of the auditor’s independence
declaration as required under section
307C of the Corporations Act 2001 is set
out on page 70.
Signed at Melbourne this 8 February
2013 in accordance with a resolution of
the Directors.
Dr D klingner
Director
Melbourne
8 February 2013
Tourism and the Gundjeihmi Aboriginal
Corporation (representatives of the Mirarr
Traditional Owners).
The Supervising Scientist confirmed in his
most recent report, relating to the operating
year to 30 June 2012, that there were no
reported incidents that resulted in any
environmental impact off the immediate
mine site, and that the environment
remained protected through the period.
There were no prosecutions commenced
or fines incurred in respect of ERA’s
environmental performance during 2012.
Further details of ERA’s environmental
performance are included in the
“Environment” section of the Annual
Report on page 32.
No person who was an officer of the
consolidated entity during the year was a
former partner or director of the auditors.
Each of the Directors at the time this
report was approved has confirmed that:
•
•
so far as he or she is aware, there
is no relevant audit information (ie
information needed by the auditors
in connection with preparing their
report) of which the auditors are
unaware; and
he or she has taken all steps that
they ought to have taken as a
Director in order to make himself
or herself aware of any relevant
audit information and to establish
that the auditors are aware of that
information.
Corporate governance
Non audit services
The Board of ERA considers high
standards of corporate governance
to be critical to business integrity and
performance. The corporate governance
structures and practices in place at ERA
are substantially in compliance with the
Corporate Governance Principles and
Recommendations – Second Edition
(“Principles”) developed by the Australian
Securities Exchange (“ASX”) Corporate
Governance Council (“Council”).
Areas where the corporate governance
practices of ERA do not follow the
Council’s recommendations arise due to
Rio Tinto’s 68.4 per cent ownership of the
Company and the management direction,
services and support this provides.
The extent to which the Company does
not comply is detailed in the Corporate
Governance Statement at page 71.
Rounding of amounts
The Company is of a kind referred
to in ASIC Class Order 98/0100 and
in accordance with that Class Order
amounts in the financial statements and
Directors’ Report have been rounded
to the nearest thousand dollars, unless
otherwise indicated.
Auditors
PricewaterhouseCoopers are the auditors
of the consolidated entity.
The Company may decide to employ
the auditors on assignments additional
to their statutory audit duties where the
auditor’s expertise and experience with
the Company are important.
Details of the amount paid or payable
to the auditors for audit services
are set out below. During 2011
PricewaterhouseCoopers was engaged
to perform services in relation to the
accelerated renounceable entitlement
offer conducted by ERA that year.
The Board of Directors has considered
the position and, in accordance with the
advice received from the Audit and Risk
Committee, is satisfied that the provision
of non-audit services is compatible with
the general standard of independence for
auditors imposed by the Corporations Act
2001. All non-audit services are reviewed
by the Audit and Risk Committee to ensure
they do not impact on the impartiality
and objectivity of the auditors and do not
undermine the general principles relating
to auditors’ independence as set out in
Professional Statement F1, including
reviewing or auditing the auditors’ own
work, acting in a management or decision
making capacity for the Company, acting as
advocate for the Company or jointly sharing
economic risks and rewards. Accordingly,
the Directors have satisfied themselves
that the provision of non-audit services
by the auditors does not compromise the
auditor independence requirements of the
Corporations Act 2001.
Energy Resources of Australia Ltd | Financial Report 2012
69
Auditor’s Independence Declaration
70
Energy Resources of Australia Ltd | Financial Report 2012
Corporate Governance Statement
The Board of ERA considers high
standards of corporate governance
to be critical to business integrity and
performance and to maximise the overall
long term return to shareholders. The
Board seeks to ensure that ERA meets
the objectives of its shareholders, while
paying proper regard to the interests of
employees and external stakeholders.
The corporate governance structures and
practices in place at ERA are substantially
in compliance with the 2nd Edition of the
Corporate Governance Principles and
Recommendations with 2010 Amendments
(Principles) developed by the Australian
Securities Exchange (ASX) Corporate
Governance Council (Council).
The Board has considered the Council’s
Principles, and ERA did not comply with
the following recommendations for the
whole of the reporting period:
•
•
Recommendation 2.1 – there was not
a majority of independent Directors;
and
Recommendation 2.4 – there was no
established nominations committee.
Areas where the corporate governance
practices in place at ERA do not follow the
recommendations set out in the Council’s
Principles arise due to Rio Tinto’s
ownership of 68.4 per cent of the shares
of the Company and the management
direction, services and support provided
by Rio Tinto. As explained further below,
the Board considers that in each case this
is appropriate.
The Corporate Governance section of
the Company’s website (www.energyres.
com.au) sets out the further information
required by the Council’s Principles.
The Board
Responsibilities and charter
In carrying out its responsibilities and
powers, the Board at all times recognises
its overriding responsibility to act honestly,
fairly, diligently and in accordance with
the law in serving the interests of the
ERA’s shareholders and employees and
the community.
The Board Charter underpins the strategic
guidance and effective management
oversight provided by the Board, and
defines the division of responsibility
between Board and management by
formal delegation and a system of Board
reserve powers.
The Board approves strategy and business
plans and monitors the performance of
ERA against these plans. The Board also
monitors compliance with policies prescribed
by the Board in areas such as health and
safety, environment, business ethics,
internal control and risk management.
These policies are designed to ensure
that ERA meets or exceeds the regulatory
requirements governing its operations.
In addition to the matters expressly
required by law to be approved by the
Board, the powers specifically reserved for
the Board are as follows:
(a) confirming the appointment and
removal of a Chief Executive proposed
by Rio Tinto and the terms and
conditions of the Chief Executive’s
employment;
(b) appointment and removal of a
Company Secretary;
(c) appointment of the Chair of the Board
and members of Board Committees;
(d) any matters set out in the Schedule
of Matters Reserved for Decision or
Consideration by the Board; and
(e) approval, subject to the Constitution,
the Corporations Act and the ASX
Listing Rules, of each of the following:
(i) the issue of new shares or other
securities in the company;
(ii) incurring of debt (other than trade
creditors incurred in the normal
course of business)
(iii) capital expenditure in excess of
$5,000,000;
(v) the acquisition, divestment or
establishment of any significant
business assets;
(vi) changes to the discretions
delegated from the Board;
(vii) the annual operating budgets and
plan;
(viii) changes to the capital and
operating approval limits of senior
management; and
(ix) the annual report and interim and
preliminary final reports.
Composition
From 1 January 2012 to 20 November
2012, the Board of ERA consisted of
six Directors, five of whom are non-
executive. During 2012, Dr Klingner
was the Chairman and an independent,
non-executive Director. Dr Garnett and
Mr Pegler are independent non-executive
Directors. Mr Taylor and Mr Coulter, who
are current executives of Rio Tinto, also
served as non-executive Directors. Mr
Atkinson is an executive Director and
holds the position of Chief Executive.
On 20 November 2012, the number of
Directors increased to seven with the
appointments of Mr McMahon and Mrs
Newell and the resignation of Mr Coulter.
Mr McMahon is an independent non-
executive Director. Mrs Newell is a current
executive of Rio Tinto and serves as a
non-executive Director.
The Board strives to achieve a diversity of
skills, experience and perspective among
its directors. Details of the Directors,
their experience, qualifications and other
appointments are set out on pages 44 to
45. Details of the independent status of
Directors is outlined in the Independence
section below.
Qualification for Board membership is
driven by the principle that the Board’s
composition should reflect the right balance
of skills, knowledge and diversity that
the Board considers will best serve the
interests of ERA and all of its shareholders.
Decisions relating to appointment of
Directors are made by the full Board.
Directors appointed by the Board are
required by ERA’s Constitution to submit
themselves for election by shareholders at
the Annual General Meeting following their
appointment. There is no share ownership
qualification for appointment as a Director.
The Board has not established a
nominations committee. The Board
recognises that this does not follow
Recommendation 2.4 of the Council’s
Principles. The Board considers that its
existing practices in reviewing director
competencies, Board succession
planning, Board performance evaluation
and director selection and nomination
carried out in accordance with the Board
Charter, are satisfactory and appropriate
given the size of the Board and ERA’s
current ownership structure.
Energy Resources of Australia Ltd | Financial Report 2012
71
Corporate Governance Statement
Non-executive Directors are required
to retire at least every three years in
accordance with ERA’s Constitution, but
may offer themselves for re-election.
Independence
For the purposes of determining Director
independence, the Board considers any
material business relationship which could
interfere, or be perceived to interfere, with
the Director’s independence of judgement,
ability to provide a strong, valuable
contribution to the Board’s deliberations
and the Director’s ability to act in the best
interest of ERA and all shareholders. Where
contracts in the ordinary course of business
exist between ERA and a company in which
a Director has declared an interest, these
are reviewed for materiality to both ERA and
the other party to the contract.
The following may be taken into account
in considering such material business
relationships:
•
•
•
•
•
whether, within the last three years,
the Director or a close family member
has been a member of executive
management of ERA, employed in
a senior position with a member of
the Rio Tinto Group or has received
additional remuneration from the
company or a member of the
Rio Tinto Group;
whether the Director or a close family
member is, or is associated with, a
substantial shareholder (more than
five per cent of the voting shares) in
the company or in a member of the
Rio Tinto Group;
the Director’s cross directorships of or
significant links with or involvement in
other companies;
the Director’s length of service on the
Board; and
whether, within the last three years,
the Director or a close family member
has had, either directly or indirectly
and whether as principal, employee
or consultant, a material business
relationship with ERA or with a member
of the Rio Tinto Group, whether as an
auditor, professional adviser, supplier,
or customer (“material” being more
than five per cent of ERA’s or the
counterparty’s consolidated gross
revenue per annum).
Dr Garnett and Mr Pegler are independent
non-executive Directors.
Dr Klingner was nominated to the Board
by Rio Tinto in 2004. Dr Klingner was
previously an executive of Rio Tinto,
however, a significant period of time
(over seven years) has elapsed since
Dr Klingner ceased employment with
Rio Tinto. The Board is satisfied that Dr
Klingner has no continuing relationship
with Rio Tinto that would interfere with his
independent exercise of judgement and
that he is an independent director.
Mr McMahon was nominated to the
Board by Rio Tinto in November 2012.
Mr McMahon was also previously an
executive of Rio Tinto, however, a
sufficient period of time (three years) has
elapsed since he ceased employment with
Rio Tinto. The Board is satisfied that Mr
McMahon has no continuing relationship
with Rio Tinto that would interfere with his
independent exercise of judgement and
that he is an independent director.
For the period 1 January to 20 November
2012, the Board of Directors did not consist
of a majority of independent Directors. This
does not follow Recommendation 2.1 of the
Council’s Principles. The Board considered
it was appropriate that the composition of
the Board recognised Rio Tinto’s 68.4 per
cent shareholding.
All Directors are required to, and do, bring
an independent judgment to bear on
Board decisions and act in accordance
with their statutory duties of good faith and
for a proper purpose, and in the interests
of all shareholders.
All related party transactions, including
those with Rio Tinto, have been
determined by the independent Directors
to be in the interests of ERA.
Chairman and Chief Executive
The Chairman, Dr Klingner, is an
independent non-executive Director. Dr
Klingner’s other appointments are set out
on page 44. The Board considers that
none of his other commitments interfere
with the discharge of his duties to ERA.
The Chief Executive is Mr R Atkinson,
who is also a Director. This is consistent
with Recommendation 2.3 of the Council’s
Principles that the Chief Executive and
Chairman be different people.
Board meetings
The Board held six scheduled meetings
during 2012. In addition, there were six
meetings held in 2012 of subcommittees
established by the Board. The Board
meeting attendance details for Directors in
2012 are set out on page 48.
Performance self assessment
In 2011, the Board performed an
evaluation of itself that:
(a) considered the performance of the
Directors and the Board and the
adequacy of the Board’s structures and
processes, including the Board Charter;
(b) set out goals and objectives of the
Board for the upcoming year; and
(c) considered whether any improvements
or changes to the Board structures
and processes, including the Board
Charter and Audit and Risk Committee
Charter, were necessary or desirable.
The process of evaluation and
self assessment took the form of a
questionnaire completed by each of the
Directors. Following collation by an external
consultant, the results and the adequacy
and appropriateness of the self assessment
process were compiled. A report outlining
the results was circulated to all Directors
and discussed at the next Board meeting,
where actions arising were agreed.
The Board agreed that the next
performance self assessment will be
conducted in late 2013.
Independent professional
advice
The Board has adopted a procedure for
Directors wishing to seek independent
professional advice, at the company’s
expense, in the furtherance of their duties.
The Board recognises that there may
be circumstances in which individual
Directors are entitled to independent
professional advice, at the company’s
expense, in the furtherance of their
duties, and any Director may do so by
arrangement with the Company Secretary.
Remuneration
ERA’s Constitution provides that the
aggregate remuneration paid to non-
72
Energy Resources of Australia Ltd | Financial Report 2012
executive Directors of ERA in any one
year will not exceed $800,000 or such
other amount as may be approved by
shareholders from time to time. At the 2012
Annual General Meeting, shareholders
approved the 2011 Remuneration Report
with 92.14% of shareholders who cast a
vote, voting in favour.
In 2012, the Board established a
Remuneration Committee. At 31 December
2012, the Remuneration Committee
comprised four non-executive independent
Directors, being Mr Pegler (Chair), Dr
Klingner, Dr Garnett and Mr McMahon.
A majority of members constitutes a
quorum for a meeting. The Chief Executive
may be invited to attend Remuneration
Committee meetings. Other executives
may also be invited to discuss or report
on particular agenda items. A standing
invitation was issued to all non-executive
Directors to attend meetings of the
Remuneration Committee.
The Remuneration Committee Charter
sets out the role and objectives of the
Remuneration Committee. A summary of
the objectives of the Remuneration
Committee is set out on page 49.
The complete Remuneration Committee
Charter is available at the Corporate
Governance section of ERA’s website.
Audit and Risk committee
The Audit and Risk Committee is
appointed by the Board and at 31
December 2012 comprised four non-
executive independent Directors. Two
Directors constitute a quorum. The present
members of the Audit and Risk Committee
are Dr Garnett (Chair), Dr Klingner, Mr
Pegler and Mr McMahon. The Company’s
Chief Financial Officer, Chief Executive,
Legal Counsel and Company Secretary,
the external auditor and the internal
auditors are invited to attend all meetings.
The Audit and Risk Committee Charter sets
out the role and terms of reference of the
Audit and Risk Committee and is reviewed
regularly. The Audit and Risk Committee
Charter is available at the Corporate
Governance section of ERA’s website.
The Committee provides a formal
structure for reviewing ERA’s financial
statements, accounting policies, control
systems, risk management practices
and taxation issues, and for liaison with
the external and internal auditors. The
Committee also reviews the adequacy of
internal and external audit arrangements.
The Committee advises the Board of
any matters that might have a significant
impact on the financial condition of ERA
and has the authority to investigate any
matters within its terms of reference,
having full access to the information and
resources of ERA to fulfil its function.
Related party transactions are considered
by the Audit and Risk Committee. The
Committee reviews compliance with
the Corporations Act 2001, and the
requirements of the ASX and other
regulatory requirements.
The Audit and Risk Committee held
three scheduled meetings during 2012.
Attendance details of the 2012 meetings
of the Audit and Risk Committee, and
the qualifications and experience of the
members, are set out in the Directors’
Report on pages 48 and 44 respectively.
Each year the external auditor submits
a schedule of audit services and fee
estimate to the Audit and Risk Committee
for consideration and approval.
PricewaterhouseCoopers have been
ERA’s external auditor for a number of
years. Each year, the Audit and Risk
Committee reviews the effectiveness
of the external audit process and the
independence of the auditor. Based
on its 2012 review, the Audit and Risk
Committee was satisfied with the external
audit process and that the external auditor
remained independent. Any work to be
conducted by the external auditor other
than the audit is approved by the Audit
and Risk Committee.
Details of the fees paid to
PricewaterhouseCoopers during 2012
are outlined on page 69.
Diversity
ERA acknowledges the benefits that flow
from advancing Board and employee
diversity, in particular gender and
indigenous diversity. These benefits
include identification and rectification
of gaps in the skills and experience of
directors and employees, enhanced
employee retention, greater innovation
and maximisation of available talent to
achieve corporate goals and increased
financial performance.
Diversity in the context of the company
primarily refers to groups which are
under represented in its workforce.
ERA has a particular focus on the
representation of women and Indigenous
people in its workforce.
ERA’s policy on diversity can be found on
the company’s website at
www.energyres.com.au.
In accordance with the company’s
diversity policy, ERA has set measurable
objectives to achieve diversity. The
objectives and the company’s progress in
achieving each objective is set out below:
OBJECTIVE
OUTCOME
Women to
represent 20
percent of the
management
(being Manager
level and above)
and the Board by
2015.
Commence a
targeted coaching
programme with
the aim to support
and develop at least
two new Indigenous
Supervisors or
Superintendents by
30 June 2012.
Build a successful
Indigenous
employee mentoring
programme.
Target of 33%
Indigenous people
and 25% female
participation in new
apprenticeships by
2014.
Maintain the level
of Indigenous
employment as at
31 December 2011
(17%) and to target
a rate of 20% by
the end of 2012.
Female participation
at manager and
general manager
level at 31
December 2012
is 12%. Women
comprise 29% of
Directors as at 31
December 2012.
ERA has appointed
two new Indigenous
Supervisors and
one new Indigenous
Superintendent.
In 2012, six qualified
mentors have been
appointed by ERA.
In 2012, ERA had 18
full time apprentices,
five of whom are
Indigenous (28
percent). In addition,
ERA had four school
based apprentices,
one of whom is
female (25 percent).
ERA ended 2012
with an Indigenous
employment rate
of 17 percent.
The Indigenous
employment rate
peaked in March
2012 at 18 percent.
Energy Resources of Australia Ltd | Financial Report 2012
73
Corporate Governance Statement
and conditional upon compliance with the
terms of the Rules for dealing, including
an express prohibition on hedging or
limiting of exposure to economic risk in
relation to such securities.
The Board has in place a number
of systems to identify and manage
business risks.
These include:
As at 31 December 2012, the proportion of
women employed by ERA was as follows:
Board of directors
Executive committee
and managers
Company
29%
12%
20%
Code of business conduct
ERA has a Code of Business Conduct to
be met by all employees and Directors.
All employees are required to maintain
high standards of ethical behaviour in
the execution of their duties and comply
with all applicable laws and regulations
in Australia and in every other country in
which the Company engages in business.
The Code of Business Conduct is
reviewed to ensure it adequately
addresses the issues facing the
Company and is available for inspection
on the Corporate Governance section of
the Company’s website at
www.energyres.com.au.
In addition to the Company’s Code
of Business Conduct, the Company’s
employees are required to comply with
Rio Tinto’s statement of business practice
The Way We Work, available at Rio Tinto’s
website at www.riotinto.com.
The Company has a confidential
whistleblower programme known as
‘Speak-OUT’. Employees are encouraged
to report any suspicion of unethical or
illegal practices.
Purchase and sale of Company
securities
ERA has in place a formal policy that
reinforces to all Directors, officers and
employees the prohibitions against insider
trading. The Share Trading Policy is
available for inspection at the Corporate
Governance section of the Company’s
website at www.energyres.com.au.
Under the ERA Share Trading Policy:
•
•
Directors and senior managers must
advise the Chairman in writing, and
receive approval in writing from the
Chairman, if they intend to purchase
or sell securities in the company.
In regard to his own dealings, the
Chairman is required to notify the
Chairperson of the Audit and Risk
Committee.
No dealings in securities of the
company may take place for the
period from the end of any relevant
financial period to the trading day
following announcement of ERA’s
annual results or half year results.
Particulars of the interests held by
Directors are outlined on page 48.
Risk identification and
management
ERA has in place a range of policies
and procedures to manage the risks
associated with its operating activities.
These policies and procedures have
been adopted by the Board, with
primary oversight by the Audit and Risk
Committee, to ensure that potential
business risks are identified and
appropriate action taken.
The management of risk is an integral part
of the responsibility of both the Board and
management and is carried out through
an integrated risk management assurance
process including an internal audit
programme delivered by the company’s
internal auditors and a detailed internal
control questionnaire process covering all
of ERA’s material business risks.
In addition, the Rules for dealing in
securities of Rio Tinto, its subsidiary
and associated companies (“Rules for
dealing”) apply to the participation of
ERA executives in the Rio Tinto long term
incentive plans involving the awarding
of Rio Tinto securities at a future date.
Any such grants of shares and options
under the Rio Tinto plans are subject to
ERA benefits from the Rio Tinto Group’s
knowledge, policies and practices on risk
management and corporate assurance,
developed to manage Rio Tinto’s diverse
business activities covering a variety of
commodities and operational locations.
Together, these make up a comprehensive
framework and approach to risk analysis
and risk management.
74
Energy Resources of Australia Ltd | Financial Report 2012
•
•
•
•
•
•
the identification and review of all of
the business risks known to be facing
the company;
the provision of reports and
information by management to the
Board, on a periodic basis, confirming
the status and effectiveness of
the plans, controls, policies and
procedures implemented to manage
business risks;
guidelines for ensuring that
capital expenditure and revenue
commitments exceeding certain
approved limits are placed before the
Board for approval;
limits and controls for all financial
exposures, including the use of
derivatives;
a regulatory compliance programme;
and
safety, health and environmental
policies which are supported by a
set of standards and management
systems which recognise the
company’s commitment to achieving
high standards of performance in all
its activities in these areas.
In 2012, the Board undertook an
assessment of the strategic risks
to the Company’s business and the
mitigation strategies to be implemented
by management. The strategic risks
identified through this assessment were
management of water; cashflow over the
period 2013 to 2015; exploration and the
potential development of the Ranger 3
Deeps resource; stakeholder support of
the Company’s strategic initiatives and
rehabilitation of the Ranger Project Area.
These strategic risks are in addition to
risks inherent to the mining industry
generally which include economic
conditions (fluctuations in commodity
pricing and exchange rates); international
regulation of greenhouse gas emmisions
and impact of climatic conditions.
The Chief Executive and Chief Financial
Officer give statements, in writing,
to the Board regarding the financial
Full advantage is taken of the annual
general meeting to inform shareholders
of current developments and to
give shareholders the opportunity
to ask questions. As recommended
by the Council’s Principles,
PricewaterhouseCoopers, ERA’s external
auditor, attends the Annual General
Meeting and is available to answer
shareholder questions about the conduct
of the audit and the preparation and
content of the auditor’s report. ERA
shareholders are also able to submit
written questions regarding the statutory
audit report to the auditor via the
company. Any questions received and
answers provided will be made available
to members at ERA Annual General
Meetings. Shareholders who are unable
to attend meetings are encouraged to
appoint a proxy to vote either as they
direct or at their discretion.
ERA believes that investor seminars,
presentations and briefings on financial
and operational issues, including social
and environmental performance, are
valuable ways of communicating with
relevant professionals, employees and
other interested persons. The Chief
Executive and Chief Financial Officer
conduct regular meetings with the
company’s major investors and analysts,
and the company organises investor
briefings to coincide with the release of
half year and full year financial results.
Recordings of investor briefings for full
and half year results are available on the
Presentations section of ERA’s website.
ERA gives equal access to information
disclosed in investor seminars,
presentations and briefings. If any such
event is used to disclose new material,
it will, in advance or simultaneously, be
disclosed to the ASX and available on
ERA’s website.
reporting and operational results being
founded on a sound system of internal
compliance and control and the financial
statements giving a true and fair view
of the Company’s position and of the
results of the Company’s operations.
This statement relies on ERA’s sound
system of risk management and internal
compliance and control which implements
the policies adopted by the Board, and
confirms that ERA’s risk management and
internal compliance and control system is
operating efficiently and effectively in all
material respects.
Each year, the leaders of ERA’s
operational and administrative functions
complete an internal control questionnaire
that seeks to confirm that adequate
internal controls are in place, are operating
effectively and are designed to capture
and evaluate failings and weaknesses,
if any exist, and take prompt action if
appropriate. The results of this process
are reviewed by ERA’s senior leadership,
and then presented to the Audit and Risk
Committee and the Board as a further
review of ERA’s internal controls. The
Chief Executive then certifies that ERA
has maintained an effective system of
internal compliance and control.
Public statements and
disclosure matters
ERA makes full and immediate disclosures
to its shareholders and the market as
required by, and in accordance with,
its legal and regulatory obligations.
Established systems are in place to
ensure compliance and matters that may
have a material impact on the price or
value of ERA’s securities are reported to
the market in accordance with the ASX
Listing Rules and the Corporations Act
2001. ERA’s Continuous Disclosure Policy
is available on the Company’s website at
www.energyres.com.au.
Shareholder communication
ERA recognises the importance of
effective communication with shareholders
and the general investment community.
Apart from ERA’s compliance with
its mandatory continuous disclosure
obligations, ERA takes steps to
ensure that its shareholders and other
stakeholders are kept informed.
Energy Resources of Australia Ltd | Financial Report 2012
75
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2012
Revenue from continuing operations
Changes in inventories
Purchased materials (uranium oxide)
Materials and consumables used
Employee benefits and contractor expense
Government and other royalties
Commission and shipping expenses
Depreciation and amortisation expenses
Non-cash impairment charge
Financing costs
Statutory and corporate expenses
Other expenses
profit/(loss) before income tax
Income tax (expense)/benefit
profit/(loss) for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
profit/(loss) is attributable to:
Owners of Energy Resources of Australia Ltd
Total comprehensive income for the year is attributable to:
Owners of Energy Resources of Australia Ltd
Earnings per share for profit/(loss) attributable to the
ordinary equity holders of the company:
Basic earnings per share (cents)
Diluted earnings per share (cents)
NOTES
3
4
4
4
13
4
4
5
CONSOLIDATED
2012
$’000
2011
$’000
422,849
667,849
108,169
(55,595)
(128,851)
(212,415)
(20,639)
(7,228)
(110,430)
(244,064)
(111,192)
(211,353)
(16,153)
(5,611)
(243,651)
(125,925)
(68,044)
(29,465)
(14,869)
(5,046)
-
(27,132)
(13,675)
(8,654)
(254,785)
(206,340)
36,026
52,741
(218,759)
(153,599)
-
-
(218,759)
(153,599)
(218,759)
(153,599)
(218,759)
(153,599)
28
28
(42.3)
(42.3)
(29.7)
(29.7)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
76
Energy Resources of Australia Ltd | Financial Report 2012
Consolidated Balance Sheet
As at 31 December 2012
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Current tax assets
Inventories
Other
Total current assets
Non-current assets
Inventories
Undeveloped properties
Property, plant and equipment
Deferred tax assets
Investment in trust fund
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Payables
Provisions
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITy
Contributed equity
Reserves
Retained profits
Total equity
CONSOLIDATED
NOTES
2012
$’000
2011
$’000
7
8
9
10
11
12
13
14
15
16
17
18
19
20
20
467,345
42,154
-
208,374
516
718,389
137,884
203,632
666,167
38,155
62,048
632,584
67,200
3,698
126,049
381
829,912
112,801
203,632
741,254
2,154
59,219
1,107,886
1,119,060
1,826,275
1,948,972
100,242
78,005
178,247
578,409
578,409
756,656
80,238
37,019
117,257
543,179
543,179
660,436
1,069,619
1,288,536
706,485
390,301
(27,167)
706,485
390,459
191,592
1,069,619
1,288,536
The above balance sheet should be read in conjunction with the accompanying notes.
Energy Resources of Australia Ltd | Financial Report 2012
77
Consolidated Statement of Changes in Equity
For the year ended 31 December 2012
CONSOLIDATED
Balance at 1 January 2011
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Contributions of equity
Employee share options – value of
employee services
Balance at 31 December 2011
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Employee share options – value of
employee services
CONTRIBUTED
EQUITy
$’000
NOTES
RESERVES
$’000
RETAINED
EARNINGS
$’000
TOTAL
$’000
214,585
391,300
345,191
951,076
-
-
-
491,900
-
491,900
706,485
-
-
-
-
-
-
-
-
-
(841)
(841)
(153,599)
(153,599)
-
-
(153,599)
(153,599)
-
-
-
491,900
(841)
491,059
390,459
191,592
1,288,536
-
-
-
(218,759)
(218,759)
-
-
(218,759)
(218,759)
(158)
(158)
-
-
(158)
(158)
19
20
20
Balance at 31 December 2012
706,485
390,301
(27,167)
1,069,619
The above statement of changes in equity should be read in conjunction with the accompanying notes.
78
Energy Resources of Australia Ltd | Financial Report 2012
Consolidated Cash Flow Statement
For the year ended 31 December 2012
CONSOLIDATED
NOTES
2012
$’000
2011
$’000
CASH fLOWS fROM OpERATING ACTIVITIES
Receipts from customers
(inclusive of goods and services tax)
Payments to suppliers and employees
(inclusive of goods and services tax)
Payments for exploration
Interest received
Financing costs paid
Income taxes (paid)/refunded
Net cash (outflow)/inflow from operating activities
27
CASH fLOWS fROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash (outflow)/inflow from investing activities
CASH fLOWS fROM fINANCING ACTIVITIES
Proceeds from issue of shares
Share issue transaction costs
Employee share option payments
Net cash (outflow)/inflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
449,582
687,817
(430,398)
(645,447)
(45,413)
(26,229)
22,428
(3,211)
3,688
(3,324)
(9,368)
33,002
12,127
(2,110)
11,897
54,916
(160,750)
(97,426)
29
22
(160,721)
(97,404)
-
-
(1,196)
(1,196)
(165,241)
632,584
2
500,290
(11,986)
(902)
487,402
444,914
187,670
-
Cash and cash equivalents at end of year
7
467,345
632,584
The above cash flow statement should be read in conjunction with the accompanying notes.
Energy Resources of Australia Ltd | Financial Report 2012
79
Notes to the Consolidated Financial Statements
For the year ended 31 December 2012
1
Summary of significant
accounting policies
The principal accounting policies adopted
in the preparation of these consolidated
financial statements are set out below.
These policies have been consistently
applied to all the years presented, unless
otherwise stated. The financial statements
are for the consolidated entity consisting
of Energy Resources of Australia Ltd
(ERA) and its subsidiaries.
(a) Basis of preparation
This general purpose financial report
has been prepared in accordance with
Australian Accounting Standards and
interpretations issued by the Australian
Accounting Standards Board, and the
Corporations Act 2001.
(i) Compliance with IfRS
The financial statements of ERA also
comply with International Financial
Reporting Standards (IFRS) as issued by
the International Accounting Standards
Board (IASB).
(ii) Historical cost convention
These financial statements have been
prepared under the historical cost
convention.
(iii) Critical accounting estimates
The presentation of financial statements
requires the use of certain critical
accounting estimates. It also requires
management to exercise its judgement
in the process of applying the accounting
policies of ERA. The areas involving a
higher degree of judgement or complexity,
or areas where assumptions and
estimates are significant to the financial
statements are disclosed in Note 2.
(b) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements
incorporate the assets and liabilities
of all subsidiaries of ERA (referred to
as Company or parent entity) as at 31
December 2012 and the results of all
subsidiaries for the year then ended. ERA
and its subsidiaries together are referred
to in this financial report as the Group or
the consolidated entity.
Subsidiaries are all those entities
(including special purpose entities) over
which the Group has the power to govern
the financial and operating policies,
generally accompanying a shareholding
of more than one half of the voting rights.
The existence and effect of potential
voting rights that are currently exercisable
or convertible are considered when
assessing whether the Group controls
another entity.
Subsidiaries are fully consolidated from
the date on which control is transferred to
the Group. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances
and unrealised gains on transactions
between Group companies are eliminated.
Unrealised losses are also eliminated
unless the transaction provides evidence
of the impairment of the asset transferred.
Accounting policies of subsidiaries have
been changed where necessary to ensure
consistency with the policies adopted by
the Group.
Investments in subsidiaries are accounted
for at cost in the individual financial
statements of ERA.
(c) Revenue recognition
Revenue is measured at the fair value of
the consideration received or receivable.
Amounts disclosed as revenue are net
of returns, trade allowances, rebates
and amounts collected on behalf of
third parties.
The Group recognises revenue when
the amount of revenue can be reliably
measured, it is probable that future
economic benefits will flow to the entity
and specific criteria have been met
for the Group’s activities as described
below. The amount of revenue is not
considered to be reliably measurable
until all contingencies relating to the sale
have been resolved. The Group bases its
estimates on historical results, taking into
consideration the type of customer, the
type of transaction and the specifics of
each arrangement.
(i) Sale of goods
Sales are brought to account when the
products pass from the physical control of
the Company pursuant to an enforceable
contract, when selling prices are known
or can be reasonably estimated and when
the products are in a form that requires no
further treatment by the Company.
In the case where a sale occurs and
immediately after which (part of) the
goods are borrowed back by ERA under
a separate agreement, the revenue is
deferred until repayment of the borrowed
goods occurs.
(ii) Rendering of services
Revenue from the rendering of services is
recognised when the service is provided.
(iii) Other revenue/income
Other revenue/income recognised by the
Group includes:
•
•
•
•
•
Interest income, which is recognised
on a time proportion basis using the
effective interest rate method;
Rental income, which is recognised
on a straight line basis;
Net gains on disposal of assets,
which is recognised at the date
control of the asset passes to the
acquirer;
Foreign exchange gains, and
Insurance recoveries, which is
recognised on confirmation from the
insurer that the claim payment has
been approved.
(d) Foreign currency translation
(i) functional and presentation
currency
Items included in the financial statements
are measured using the currency of
the primary economic environment in
which the entity operates (“the functional
currency”). The consolidated financial
statements are presented in Australian
dollars, which is ERA’s functional and
presentation currency.
80
Energy Resources of Australia Ltd | Financial Report 2012
(ii) Transactions and balances
Foreign currency transactions are
translated into the functional currency
using the exchange rates prevailing at
the dates of the transactions. Foreign
exchange gains and losses resulting from
the settlement of such transactions and
from the translation at year end exchange
rates of monetary assets and liabilities
denominated in foreign currencies
are recognised in the statement of
comprehensive income, except when
they are deferred in equity as qualifying
cash flow hedges and qualifying net
investment hedges or are attributable
to part of the net investment in a
foreign operation.
(e) Financing costs
Financing costs (including interest)
are included in the statement of
comprehensive income in the period
during which they are incurred, except
where they are included in the cost of
non current assets that are currently
being developed and will take a
substantial period of time to complete.
The borrowing costs included in the cost
of such developments are those costs
that would have been avoided if the
expenditure on the development had not
been made.
Once the asset is ready for use,
the capitalised borrowing costs are
depreciated as a part of the carrying
amount of the related asset.
The capitalisation rate used to determine
the amount of borrowing costs to be
capitalised is the weighted average
interest rate applicable to the Company’s
outstanding borrowings during the year.
(f) Provisions
Provisions are recognised when the
Group has a present legal or constructive
obligation as a result of past events, it is
probable that an outflow of resources will
be required to settle the obligation and
the amount has been reliably estimated.
Provisions are not recognised for future
operating losses.
Provisions are measured at the present
value of management’s best estimate
of the expenditure, adjusted for risk,
required to settle the present obligation
at the balance sheet date. The discount
rate used to determine the present value
reflects current market assessments of
the time value of money. The increase in
the provision due to the passage of time
is recognised as interest expense.
(i) Rehabilitation
ERA is required to rehabilitate the
Ranger Project Area upon cessation
of mining operations. The costs are
estimated on the basis of a closure
model, taking into consideration the
technical closure options available to
meet ERA’s obligations and applying
a probability weighting to each option
based on the likelihood of executing
each option. When it is deemed only
one option is available it is assigned a
100% probability. The cost estimates are
calculated annually during the life of the
operation to reflect known developments,
and are subject to regular reviews.
The amortisation or unwinding of the
discount applied in establishing the net
present value of provisions is charged
to the profit and loss account in each
accounting period. The amortisation of
the discount is shown as a financing cost.
Other movements in the provision for
closure and restoration costs, including
those resulting from new disturbance,
updated cost estimates, changes to lives
of operations and revisions to discount
rates are capitalised within fixed assets.
These costs are then depreciated on a
unit of production basis over the life of
the reserves.
Where rehabilitation is conducted
systematically over the life of the
operation, rather than at the time of
closure, provision is made for the
outstanding continuous rehabilitation
work at each balance date. All costs
of continuous rehabilitation work are
charged to the provision as incurred.
Separately, ERA is required to maintain
with the Commonwealth Government
the Ranger Rehabilitation Trust Fund
(“trust fund”), to provide security against
the estimated costs of closing and
rehabilitating the mine immediately
(rather than upon the planned cessation
of mining operations). Each year, ERA
is required to prepare and submit to the
Commonwealth Government an annual
plan of rehabilitation. Once accepted
by the Commonwealth Government,
the annual plan is then independently
assessed and costed and the amount to
be provided by ERA, in the trust fund, is
then determined. The trust fund includes
both cash and financial guarantees. The
cash portion is shown as an investment
on the balance sheet (note 15), and
interest received by the trust fund is
shown as interest income.
ERA is required to rehabilitate the
Jabiluka Mineral Lease upon cessation
of operations to a standard specified
by the Authorisation to Operate issued
by the Northern Territory Government.
The estimated cost of rehabilitation is
currently secured by a bank guarantee
and fully provided for in the financial
statements.
(g) Income tax
Income tax expense for the period is
the tax payable on the current period’s
taxable income based on the applicable
income tax rate adjusted by temporary
differences between the tax bases of
assets and liabilities and their carrying
amounts in the financial statements, and
to unused tax losses.
The current income tax charge is
calculated on the basis of the tax laws
enacted or substantively enacted at the
end of the reporting period in the country
where the Company generates taxable
income (Australia).
Deferred income tax is provided in full,
using the liability method, on temporary
differences arising between the tax bases
of assets and liabilities and their carrying
amounts in the consolidated financial
statements. However, the deferred
income tax is not accounted for if it
arises from initial recognition of an asset
or liability in a transaction other than a
business combination that at the time of
the transaction affects neither accounting
nor taxable profit or loss. Deferred
income tax is determined using tax rates
(and laws) that have been enacted or
substantially enacted by the reporting
date and are expected to apply when
the related deferred income tax asset
is realised or the deferred income tax
liability is settled.
Energy Resources of Australia Ltd | Financial Report 2012
81
Notes to the Consolidated Financial Statements
Deferred tax assets are recognised for
deductible temporary differences and
unused tax losses only if it is probable
that future taxable amounts will be
available to utilise those temporary
differences and losses.
Any difference between the amounts
assumed and amounts receivable or
payable under the tax funding agreement
are recognised as a contribution to
(or distribution from) wholly owned tax
consolidated entities.
Deferred tax liabilities and assets are
not recognised for temporary differences
between the carrying amount and tax
bases of investments in controlled
entities where the parent entity is able to
control the timing of the reversal of the
temporary differences and it is probable
that the differences will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right
to offset current tax assets and liabilities
and when the deferred tax balances relate
to the same taxation authority. Current tax
assets and tax liabilities are offset where
the entity has a legally enforceable right to
offset and intends either to settle on a net
basis, or to realise the asset and settle the
liability simultaneously.
Current and deferred tax balances
attributable to amounts recognised
directly in equity are also recognised
directly in equity.
(i) Tax consolidation legislation
ERA and its wholly owned Australian
controlled entities have implemented
the tax consolidation legislation as at 31
December 2005 and have agreements
governing these relationships for tax
purposes in place.
The head entity, ERA and the controlled
entities in the tax consolidated group
account for their own current and
deferred tax amounts. These tax
amounts are measured as if each entity
in the tax consolidated group continues to
be a stand alone taxpayer in its own right.
In addition to its own current and deferred
tax amounts, ERA also recognises the
current tax liabilities (or assets) and
the deferred tax assets arising from
unused tax losses and unused tax credits
assumed from controlled entities in the
tax consolidated group.
Assets or liabilities arising with the tax
consolidated entities are recognised as
amounts receivable from or payable to
other entities in the Group.
(h) Trade and other receivables
Trade receivables are recognised initially
at fair value and subsequently measured at
amoritised cost using the effective interest
method less provision for impairment.
Trade receivables are normally settled
within 45 days and are carried at
amounts due. The collectability of trade
receivables is reviewed on an ongoing
basis and specific provisions are made
for any doubtful amounts. Receivables
which are known to be uncollectible are
written off.
Other receivables relate to transactions
outside the usual operating activities
of the Group and are predominately
concerned with rental receipts from
employees and businesses located within
the Jabiru township. These ongoing
activities are expected to be settled
during the 12 months subsequent to
balance date but are assessed regularly
and impaired accordingly.
(i) Inventories
Inventories, other than stores, are carried
at the lower of cost and net realisable
value. Net realisable value is determined
based on estimated future sales
prices, exchange rates and capital and
production costs, including transport.
Inventory is valued using the weighted
average cost method and includes both
fixed and variable production costs as
well as cash and non-cash charges.
Stockpiles represent ore that has been
extracted and is available for further
processing. If there is significant
uncertainty as to when the stockpiled
ore will be processed it is expensed as
incurred. Where the future processing of
this ore can be predicted with confidence,
for example because it exceeds the
mine’s cut off grade, it is valued at the
lower of cost and net realisable value.
If the ore will not be processed within
12 months after the balance sheet date it
is included within non-current assets and
net realisable value is calculated on a
discounted cash flow basis.
Work in progress inventory includes ore
stockpiles and other partly processed
material. Quantities are assessed
primarily through surveys and assays.
Stores are valued at cost or net realisable
value where applicable and are impaired
accordingly to take into account
obsolescence.
For inventory management purposes
the Company may enter into uranium
loans as a lending or receiving party.
These loans are entered into for logistical
purposes and loans received are repaid
from the Company’s inventory. The
uranium loans do not meet the definition
of a financial liability and are recorded net
of inventory.
(j) Impairment of assets
Assets that have an indefinite useful life
and intangible assets that are not yet
available for use are tested annually for
impairment or more frequently if events
or changes in circumstances indicate
that they might be impaired. Other assets
are tested for impairment whenever
events or changes in circumstances
indicate that the carrying amount may
not be recoverable. An impairment loss
is recognised for the amount by which
the asset’s carrying amount exceeds its
recoverable amount. The recoverable
amount is the higher of an asset’s fair
value less cost to sell and value in
use. For the purposes of assessing
impairment, assets are grouped at
the lowest levels for which there are
separately identifiable cash flows (cash
generating units).
Fair value is determined as the amount
that would be obtained from the sale of
the asset in an arm’s length transaction.
The value in use is determined using
the present value of the future cashflow
expected to be derived from an asset or
cash generating unit.
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Energy Resources of Australia Ltd | Financial Report 2012
(k) Property, plant and
equipment
(i) Acquisition
Items of property, plant and equipment
are recorded at historical cost and,
except for land, are depreciated as
outlined below. Historical cost includes
expenditure that is directly attributable
to the acquisition of the items.
Subsequent costs are included in the
asset’s carrying amount or recognised
as a separate asset, as appropriate,
only when it is probable that future
economic benefits associated with the
item will flow to the Group and the cost
of the item can be measured reliably.
Repairs and maintenance are charged
to the statement of comprehensive
income during the period in which they
are incurred.
(ii) Depreciation and
amortisation
Depreciation of plant and equipment is
provided for as follows:
(a) individual assets that have a life
equal to or longer than the estimated
remaining life of the Ranger mine are
depreciated on a unit of production
basis over the life of the reserves; and
(b) each other asset is depreciated
over its estimated operating life on a
straight line basis.
The following indicates the depreciation
method for buildings and plant and
equipment on which the depreciation
charges are based:
•
•
Buildings – units of production over
the life of reserves
Plant and equipment* – units of
production over the life of reserves
*Some of these assets are depreciated
on a straight line basis over their useful
operating life which is less than the life
of the Ranger mine. See below for the
estimated useful lives.
•
•
Office equipment: computers – three
years
Office equipment: general – five
years
•
Plant and equipment – five years
•
•
•
Furniture & fittings – ten years
Motor vehicles – five years
Tailings Storage Facility – three years
Assets are depreciated from the date
of acquisition or, in respect of internally
constructed assets, from the time an
asset is completed and held ready
for use.
(iii) Leases
Leases in which a significant portion of
the risks and rewards of ownership are
not transferred to the Group as lessee
are classified as operating leases (Note
22). Payments made under operating
leases (net of any incentives received
from the lessor) are charged to the
statement of comprehensive income on
a straight-line basis over the period of
the lease.
(iv) Mine properties
Mine properties, consisting principally
of Ranger Project Area mining rights,
are amortised on a unit of production
basis over the life of the economically
recoverable reserves of Ranger.
(v) Deferred stripping costs
Stripping costs incurred in the
development of a mine before production
commences are capitalised as part of
the cost of constructing the mine and
subsequently amortised over the life of
the mine on a units of production basis.
Stripping costs incurred during the
production stage of mining operations
are deferred where they are separately
identifiable and do not form part of
normal mining activities. These costs are
deferred and amortised over the period in
which the associated ore is produced.
(l) Exploration and evaluation
expenditure
Exploration and evaluation expenditure
comprises costs which are directly
attributable to:
•
•
researching and analysing existing
exploration data;
conducting geological studies,
exploratory drilling and sampling;
•
•
•
construction of underground tunnels,
where necessary for exploration
drilling;
examining and testing extraction and
treatment methods; and
compiling pre-feasibility and
feasibility studies.
Exploration and evaluation expenditure
also includes the costs incurred in
acquiring mineral rights, the entry
premiums paid to gain access to areas
of interest and amounts payable to
third parties to acquire interests in
existing projects.
Capitalisation of exploration expenditure
commences when there is a high degree
of confidence in the project’s viability and
hence it is probable that future economic
benefits will flow to ERA. Capitalised
exploration expenditure is reviewed for
impairment at each balance sheet date.
Subsequent recovery of the resulting
carrying value depends on successful
development of the area of interest or
sale of the project. If a project does
not prove viable, all unrecoverable
costs associated with the project and
the related impairment provisions are
written off. Any impairment provisions
raised in previous years are reassessed
if there is a change in circumstances
which indicates that they may no longer
be required, for example if it is decided
to proceed with development. If the
project proceeds to development, the
amounts included within intangible assets
are transferred to property, plant and
equipment.
(i) Undeveloped properties
Undeveloped properties are mineral
concessions where the intention is
to develop and go into production in
due course. The carrying values of
these assets are reviewed annually by
management and the results of these
reviews are reported to the Board and
Audit and Risk Committee. Impairment
is assessed based on a status
report regarding ERA’s intentions for
development of the undeveloped property
and is reviewed using the fair value less
cost to sell method.
Energy Resources of Australia Ltd | Financial Report 2012
83
Notes to the Consolidated Financial Statements
(m) Goods and Services Tax
(p) Derivatives
(GST)
Revenues, expenses and assets
are recognised net of the amount of
associated GST, unless the GST incurred
is not recoverable from the taxation
authority. In this case it is recognised as
part of the cost of acquisition of the asset
or as part of the expense.
Receivables and payables are stated
inclusive of the amount of GST
receivable or payable. The net amount
of GST recoverable from, or payable to,
the taxation authority is included with
other receivables or payables in the
balance sheet.
Cash flows are presented on a gross
basis. The GST components of cash
flows arising from investing or financing
activities which are recoverable from,
or payable to the taxation authority, are
presented as operating cash flows.
(n) Trade and other payables
Liabilities are recognised for amounts
to be paid in the future for goods and
services received prior to the end of the
financial year, whether or not billed to the
Company or consolidated entity. Trade
accounts payable are normally settled
within 60 days. These are recognised
initially at their fair value and subsequently
measured at amortised cost using the
effective interest rate method.
(o) Borrowings
Borrowings are initially recognised
at fair value, net of transaction costs
incurred. Borrowings are subsequently
measured at amortised cost. Any
difference between the proceeds (net of
transaction costs) and the redemption
amount is recognised in the statement of
comprehensive income over the period
of the borrowings using the effective
interest method.
Borrowings are classified as current
liabilities unless the Group has an
unconditional right to defer settlement of
the liability for at least 12 months after
the balance sheet date.
Derivatives are initially recognised at fair
value on the date a derivative contract
is entered into and are subsequently re-
measured to their fair value. The method
of recognising the resulting gain or loss
depends on whether the derivative is
designated as a hedging instrument, and
if so, the nature of the item being hedged.
The Company designates derivatives as
hedges against highly probable forecast
transactions (cash flow hedges).
The Company documents at the
inception of the transaction the
relationship between hedging instruments
and hedged items, as well as its risk
management objective and strategy for
undertaking various hedge transactions.
The Company also documents its
assessment, both at hedge inception
and on an ongoing basis, of whether
the derivatives that are used in hedging
transactions have been and will continue
to be highly effective.
The effective portion of changes in
the fair value is recognised in equity
in the hedging reserve. The gain or
loss relating to the ineffective portion is
recognised immediately in the statement
of comprehensive income.
Amounts accumulated in equity
are recycled in the statement of
comprehensive income in the periods
when the hedged item will affect profit
or loss (for instance when the forecast
sale that is hedged takes place). When
a forecast transaction is no longer
expected to occur the cumulative gain
or loss that was reported in equity is
immediately transferred to the statement
of comprehensive income.
Derivative financial instruments are not
held for speculative purposes.
(q) Employee entitlements
(i) Wages and salaries, annual
leave and sick leave
The liability for employee entitlements
to wages and salaries represents the
amount which the consolidated entity
has a present obligation to pay resulting
from employees’ services provided up
to the reporting date. A provision exists
for annual leave and accumulating sick
leave as it is earned by employees and
is measured at the amount expected to
be paid when it is settled and includes
all related on costs. Liabilities for non-
accumulating sick leave are recognised
when the leave is taken and measured at
the rates paid or payable.
(ii) Long service leave
The liability for long service leave
expected to be settled within 12 months
of the reporting date is recognised in
the provision of employee benefits
and is measured in accordance with
(i) above. The liability for long service
leave expected to be settled more than
12 months from the reporting date
is measured as the present value of
expected future payments to be made
in respect of services provided by
employees up to the reporting date.
Consideration is given to the expected
future wage and salary levels, experience
of employee departures and periods
of service.
Expected future payments are
discounted using the rates attaching to
Commonwealth Government securities
at the reporting date, which most closely
match the terms of maturity of the
related liabilities.
(iii) Superannuation plan
Employees of the Company are entitled
to benefits on retirement, disability or
death from their membership of the Rio
Tinto Staff Superannuation Fund (“The
Fund”). The Fund has both a defined
benefit and a defined contribution
section. Contributions to the defined
contribution superannuation plans are
expensed in the income statement
when incurred.
The defined benefits section currently
has only two members from ERA and as
such any surplus or deficit of plan assets
are disclosed in the financial statements
of the sponsoring entity, Rio Tinto
Services Limited.
84
Energy Resources of Australia Ltd | Financial Report 2012
(iv) Termination benefits
Termination benefits are payable when
employment is terminated before the
normal retirement date, or when an
employee accepts voluntary redundancy
in exchange for these benefits. The group
recognises termination benefits when
it is demonstrably committed to either
terminating the employment of current
employees according to a detailed formal
plan without possibility of withdrawal
or to providing termination benefits as
a result of an offer made to encourage
voluntary redindancy. Benefits falling
due more than 12 months after the end
of the reporting period are discounted to
present value.
(r) Segment reporting
Management has determined the
operating segments based on the reports
reviewed by the Chief Executive, used
to make strategic decisions. The Chief
Executive considers the business from a
product perspective.
year, adjusted for bonus elements in
ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the
figures used in the determination of basic
earnings per share to take into account
the after income tax effect of interest
and other financing costs associated
with dilutive potential ordinary shares
and the weighted average number of
shares assumed to have been issued
for no consideration in relation to dilutive
potential ordinary shares.
(v) Rounding of amounts
The Company is of a kind referred to
in Class Order 98/0100, issued by the
Australian Securities and Investments
Commission, relating to the ‘rounding
off’ of amounts in the financial report.
Amounts in the financial report have been
‘rounded off’ in accordance with that Class
Order to the nearest thousand dollars, or
in certain cases, to the nearest dollar.
(s) Cash and cash equivalents
(w) Share based payments
For the purposes of the statement of
cash flows, cash includes cash on hand
and deposits held at call, net of any
bank overdrafts.
(t) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to
the issue of new shares or options are
shown in equity as a deduction, net of
tax, from the proceeds.
Incremental costs directly attributable to
the issue of new shares or options for the
acquisition of a business are not included
in the cost of the acquisition as part of the
purchase consideration.
(u) Earnings per share
(i) Basic earnings per share
Basic earnings per share is determined
by dividing net profit after income tax
attributable to members of the Company,
excluding any costs of servicing equity
other than ordinary shares, by the
weighted average number of ordinary
shares outstanding during the financial
The fair value of cash settled share plans
is recognised as a liability over the vesting
period of the awards. Movements in that
liability between accounting dates are
recognised as an expense. The grant
date fair value of the awards is taken to
be the market value of the shares at the
date of award reduced by a factor for
anticipated relative Total Shareholder
Return (‘TSR’) performance. Fair values
are subsequently re-measured at each
accounting date to reflect the number of
awards expected to vest based on the
current and anticipated TSR performance.
If any awards are ultimately settled in
shares, the liability is transferred direct to
equity as the consideration for the equity
instruments issued.
Equity settled share plans are settled
either by the issue of shares by the
relevant parent Company, by the
purchase of shares on market or by the
use of shares previously acquired as part
of a share buyback. The fair value of the
share plans is recognised as an expense
over the expected vesting period with a
corresponding entry to other reserves.
If the cost of shares acquired to satisfy
the plans exceeds the expense charged,
the excess is taken to the appropriate
reserve. The fair value of the share plans
is determined at the date of grant, taking
into account any market based vesting
conditions attached to the award (e.g.
Total Shareholder Return). The Group
uses fair values provided by independent
actuaries calculated using a lattice based
option valuation model.
Non-market based vesting conditions
(e.g. earnings per share targets) are
taken into account in estimating the
number of awards likely to vest. The
estimate of the number of awards likely
to vest is reviewed at each balance sheet
date up to the vesting date, at which point
the estimate is adjusted to reflect the
actual awards issued. No adjustment is
made after the vesting date even if the
awards are forfeited or not exercised.
Further information about the treatment
of individual share based payment plans
is provided in Note 32.
(x) Dividends
Provision is made for the amount of any
dividend declared, determined or publicly
recommended by the Directors on or
before the end of the financial year but
not distributed at balance date.
(y) Parent entity financial
information
The financial information for the parent
entity, Energy Resources of Australia
Ltd (ERA), disclosed in Note 30 has
been prepared on the same basis as the
consolidated financial statements, except
as set out below.
(i) financial guarantees
Where the parent entity has provided
financial guarantees in relation to
loans and payables of subsidiaries for
no compensation, the fair values of
these guarantees are accounted for as
contributions and recognised as part of
the cost of the investment.
Energy Resources of Australia Ltd | Financial Report 2012
85
Notes to the Consolidated Financial Statements
(z) New accounting standards
and interpretations
Certain new accounting standards and
interpretations have been published that
are not mandatory for 31 December 2012
reporting periods. The Group’s assessment
of the impact of these new standards and
interpretations is set out below.
(i) AASB 9 Financial Instruments, AASB
2009-11 Amendments to Australian
Accounting Standards arising
from AASB 9 and AASB 2010-7
Amendments to Australian Accounting
Standards arising from AASB 9
(December 2010) (effective from
1 January 2013)
AASB9 Financial Instruments addresses
the classification, measurement and
derecognition of financial assets and
financial liabilities. The standard is not
applicable until 1 January 2013 but is
available for early adoption. There will be
no impact on the group’s accounting for
financial assets or liabilities.
(ii) AASB 13 Fair Value Measurement
and AASB 2011-8 Amendments to
Australian Accounting Standards
arising from AASB 13 (effective
1 January 2013).
AASB13 was released in September 2011.
It explains how to measure fair value and
aims to enhance fair value disclosures.
The group has yet to determine which,
if any, of its current measurements
techniques will have to change as a
result of the new guidance. It is therefore
not possible to state the impact, if any,
of the new rules on any of the amounts
recognised in the financial statements.
However, application of the new standard
will impact the type of information
disclosed in notes to the financial
statements. The group does not intend
to adopt the new standard before its
operative date, which means that it would
first be applied in the annual reporting
period ending 31 December 2014.
There are no other standards that are
not yet effective and that are expected
to have a impact on the entity in the
current or future reporting periods and in
forecast transactions.
2
Critical accounting
estimates and
judgements
Estimates and judgements are continually
evaluated and are based on historical
experience and other factors, including
expectations of future events that may
have a financial impact on the entity and
that are believed to be reasonable under
the circumstances.
The Group makes estimates and
assumptions concerning the future.
The resulting accounting estimates
will, by definition, seldom equal the
related actual results. The estimates
and assumptions that have a significant
risk of causing a material adjustment
to the carrying amounts of assets and
liabilities within the next financial year are
discussed below.
(a) Rehabilitation provision
The calculation of the rehabilitation
provision relies on estimates of costs
and their timing required to rehabilitate
and restore disturbed land to original
condition.
The costs are estimated on the basis of a
rehabilitation model, taking into account
consideration of the preferred options
available to meet ERA’s obligations. The
cost estimates are reviewed annually
during the life of the operation to reflect
known developments.
A prefeasibility study was conducted
during the year and resulted in
modifications to the preferred
rehabilitation plan as at the 31 December
2012.The provision for rehabilitation
represents the net present cost at
31 December, based on current
disturbance, of the preferred plan within
the requirements of the Ranger Project
Area Authority.
As a result of the work undertaken to
date as part of the prefeasibility study,
the cost estimates have been revised to
reflect ERA’s best estimate. As a result
of the revised rehabilitation estimate,
the rehabilitation provision has been
increased by $22.4 million.
A key sensitivity in estimating the
rehabilitation provision is the discount
rate applied to the underlying cash flows.
ERA has reduced the real discount
rate by 0.5 per cent to 2.5 per cent in
response to reduced yields achieved on
risk free investments. This has resulted
in the rehabilitation provision being
increased by $19.3 million.
The ultimate cost of rehabilitation is
uncertain and can vary in response to
may factors such as legal requirements,
technological change and experience
at other sites. To the extent that ERA’s
future estimates of the rehabilitation
costs are different to those currently
estimated, ERA will adjust the provision
for rehabilitation costs to reflect additional
knowledge obtained.
(b) Taxation
The Group has recognised certain
deferred tax assets for deductible
temporary differences and recoverable
losses carried forward. In recognising
these deferred tax assets assumptions
have been made regarding the Group’s
ability to generate future taxable profits.
Judgement is required in regard to the
application of income tax legislation.
There is an inherent risk and uncertainty
in applying these judgements and a
possibility that changes in legislation will
impact the carrying amount of deferred
tax assets and deferred tax liabilities
recognised on the balance sheet.
(c) Determination of ore
reserves and resources
ERA estimates its ore reserves and
resources based on information compiled
by Competent Persons as defined in
accordance with the Australasian Code
for Reporting of Exploration Results,
Mineral Resources and Ore Reserves of
December 2004 (the JORC code).
There are numerous uncertainties
inherent in estimating ore reserves and
assumptions that are valid at the time of
estimation may change significantly when
new information becomes available.
Changes in the forecast prices of
commodities, exchange rates, production
costs or recovery rates may change the
economic status of reserves and may,
ultimately, result in the reserves being
restated. Such changes in reserves could
impact on depreciation and amortisation
86
Energy Resources of Australia Ltd | Financial Report 2012
rates, asset carrying values and provisions
for rehabilitation. A full statement of ERA
Ore Reserves and Mineral Resources
as at 31 December 2012 is on page 15
and 16.
If the carrying values of the assets
are assessed as being impaired, the
impairment charge is charged against the
income statement.
(d) Impairment
ERA’s balance sheet contains items
that have been subject to impairment
testing during the year, as a result of ERA
identifying specific impairment indicators.
These impairment indicators include a
decline in the long term uranium price,
continued strength of the Australian dollar
and volatility of the share price resulting
in market capitalisation (Australian
Securities Exchange) being below net
assets at year end.
ERA has two cash generating units
(CGU), the Ranger Project Area and the
Jabiluka Lease. The Ranger GCU includes
all assets and liabilities related to activities
on the Ranger Project Area, including the
rehabilitation provision and the associated
asset capitalised within property, plant
and equipment. The Jabiluka CGU relates
to the Jabiluka lease which is currently
under a long term care and maintenance
agreement.
ERA assesses the recoverable amount
of CGUs based on the greater of fair
value less cost to sell or value in use.
ERA has used the fair value less costs
to sell method for the Ranger GCU, the
recoverable amount has been determined
based on discounted cash flow modelling
of a set of probability weighted strategic
outcomes. Further details are available in
note 13. ERA also uses the fair value less
costs to sell method for the Jabiluka CGU.
Further details are available at note 12.
In assessing impairment, estimates are
required of resource and development
potential, future market prices, discount
rate, exchange rates, rehabilitation, capital
and production costs in order to assist in
the judgement of the recoverable amount.
ERA makes estimates and assumptions
in regard to impairment which are subject
to risk and uncertainty. Changes in
circumstances may affect these estimates
and the recoverable amount. Further
details are available at note 12 and 13.
Energy Resources of Australia Ltd | Financial Report 2012
87
Notes to the Consolidated Financial Statements
3 Revenue
REVENUE fROM CONTINUING OpERATIONS
Sales revenue
Sale of goods
Rendering of services
Total sales revenue
Other revenue
Interest received/receivable, other parties
Rent received
Total other revenue
2012
$’000
2011
$’000
395,399
1,230
396,629
25,257
963
26,220
649,213
2,168
651,381
15,533
935
16,468
Total revenue from continuing operations
422,849
667,849
88
Energy Resources of Australia Ltd | Financial Report 2012
4 Expenses
LOSS BEfORE INCOME TAX INCLUDES
THE fOLLOWING SpECIfIC EXpENSES:
Cost of sales
Produced product (uranium oxide)
Purchased product (uranium oxide)
Total cost of sales
Depreciation
Mine land and buildings
Plant and equipment
Total depreciation
Amortisation
Mine properties
Rehabilitation asset
Total amortisation
Total depreciation and amortisation expenses
Government and other royalties
Royalty payments
Payments to Aboriginal interests
Total Government and other royalties
financing costs
Related parties
Other parties
Unwinding of discount (rehabilitation provision)
Total financing Costs
Doubtful debts expense
Net loss on disposal of property, plant & equipment
Net foreign exchange loss
Rental expense relating to operating leases
Research and development expenditure
Total exploration and evaluation expenditure
(including Ranger 3 Deeps exploration decline)
Defined contribution superannuation expense
NOTES
2012
$’000
2011
$’000
22
302,370
67,965
370,335
5,885
120,555
126,440
20,009
97,202
117,211
243,651
4,691
15,948
20,639
27
3,183
26,255
29,465
112
722
235
8,308
34,493
45,413
6,773
268,014
216,659
484,673
3,974
56,219
60,193
14,420
51,312
65,732
125,925
3,671
12,482
16,153
-
2,110
25,022
27,132
(2,736)
713
855
10,027
52,364
9,368
6,186
Energy Resources of Australia Ltd | Financial Report 2012
89
Notes to the Consolidated Financial Statements
5 Income tax expense/(benefit)
INCOME TAX EXpENSE/(BENEfIT)
Current tax
Deferred tax
Under/(over) provided in prior years
Income tax expense/(benefit)
Deferred income tax (revenue)/expense included
in income tax expense comprises:
Decrease/(increase) in deferred tax assets (Note 14B)
(Decrease)/increase in deferred tax liabilities (Note 14A)
Deferred tax
RECONCILIATION Of INCOME TAX EXpENSE
TO pRIMA fACIE TAX pAyABLE
Operating loss before income tax
Tax at the Australian tax rate of 30% (2011 – 30%)
Tax effect of amounts which are not deductible/(taxable)
in calculating taxable income:
Impairment of non-current assets
R&D tax concession
Amortisation
Other items
Income tax under/(over) provided in prior years
Income tax expense/(benefit)
AMOUNTS RECOGNISED DIRECTLy IN EQUITy
Aggregate current and deferred tax arising in the
reporting period and not recognised in net profit or loss
but directly debited or (credited) to equity
Net deferred tax asset (Notes 14B)
Tax consolidation legislation
2012
$’000
2011
$’000
-
(35,897)
(129)
(36,026)
(28,419)
(7,478)
(35,897)
-
(52,042)
(699)
(52,741)
(30,659)
(21,383)
(52,042)
(254,785)
(76,435)
(206,340)
(61,902)
20,413
(3,449)
29,161
(5,587)
(129)
-
(3,927)
15,394
(1,607)
(699)
(36,026)
(52,741)
34
(3,229)
Energy Resources of Australia Ltd and its wholly-owned Australian controlled entities implemented the tax consolidation legislation as
at 31 December 2005. The accounting policy in relation to this legislation is set out in Note 1(g).
90
Energy Resources of Australia Ltd | Financial Report 2012
6 Dividends
Dividends paid or declared
No dividends have been paid or declared for the year ended 31 December 2012 (2011: nil).
Dividends franking account
Franking credits available for subsequent financial years
based on a tax rate of 30% (2011 – 30%)
2012
$’000
2011
$’000
234,095
234,086
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for franking credits that
will arise from the payment of the amount of the provision for income tax as applicable.
The ability to utilise the franking account credits is dependent upon there being sufficient available profits to declare dividends.
7 Cash and cash equivalents
CURRENT
Cash at bank and in hand
Deposits at call
Cash and cash equivalents
Cash at bank/Deposits at call
Cash assets and deposits bear floating interest rates between 0.0% and 4.3% (2011 – 0.0% and 4.7%).
Interest rate risk exposure
The Group’s exposure to interest rate risk is discussed in Note 29.
8 Trade and other receivables
CURRENT
Trade debtors
Other debtors
Provision for impairment
Net other debtors
Trade and other receivables
Impairment of receivables
2012
$’000
2011
$’000
1,361
465,984
467,345
3,627
628,957
632,584
2012
$’000
34,448
7,846
(140)
7,706
42,154
2011
$’000
60,038
7,190
(28)
7,162
67,200
No trade receivables are past due. There is no impairment of trade receivables.
The impairment of other receivables relate to transactions outside the usual operating activities of the Group and are predominately
concerned with receipts from employees and businesses operating within the Jabiru township. These ongoing activities are expected
to be settled during the 12 months subsequent to balance date.
Energy Resources of Australia Ltd | Financial Report 2012
91
Notes to the Consolidated Financial Statements
Foreign exchange and interest rate risk
ERA operates internationally but is primarily exposed to foreign exchange risk arising from currency exposures with respect to the
US dollar.
A summarised analysis of the sensitivity of trade and other receivables to foreign exchange and interest rate risk can be found in
Note 29.
Fair value and credit risk
Due to the short-term nature of these receivables, their carrying amount approximates their fair value.
The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above.
The Group does not hold any collateral as security. Refer to Note 29 for more information on the financial risk management policy of
the Group.
9 Inventories – current
Stores and spares
Ore stockpiles at cost
Work in progress at cost
Finished product U3O8 at cost
Total current Inventory
Inventory expense
2012
$’000
23,021
35,852
4,531
144,970
208,374
2011
$’000
23,783
34,993
3,213
64,060
126,049
Obsolescence of inventory provided for and recognised as an expense during the year ended 31 December 2012 amounted to
$284,677 (2011: $190,294).
10 Other assets
Prepayments
11 Inventories – non-current
Ore stockpiles at cost
Inventory expense
2012
$’000
516
2011
$’000
381
2012
$’000
2011
$’000
137,884
112,801
During 2011 some low grade stockpiled ore was recognised as an expense of $142,060,800 ($99,442,560 post tax). This related to
the reclassification of some low grade stockpiled ore from Reserves to Resources as a result of the decision of the ERA Board to not
progress with the Ranger Heap Leach Facility. This is shown in the change in inventories line of the Statement of Comprehensive
Income.
92
Energy Resources of Australia Ltd | Financial Report 2012
12 Undeveloped properties
Jabiluka: Long-term care and maintenance development project
Balance brought forward
Amount capitalised during the year
Total undeveloped properties
2012
$’000
2011
$’000
203,632
203,632
-
-
203,632
203,632
Undeveloped properties are considered an asset not yet ready for use. The recoverable amount of the undeveloped properties is
determined using the fair value less cost to sell method.
Fair value less cost to sell has been determined using a discounted cash flow model. Key assumptions to which the model is most
sensitive include:
•
•
•
•
Uranium prices
Foreign exchange rates
Production and capital costs
Discount rate
• Ore reserves and mineral resources
In determining the value assigned to each key assumption, management has used external sources of information and has utilised the
expertise of external consultants to validate entity-specific assumptions such as costs, production techniques and reserves.
Further, the Company’s cash flow forecasts are based on estimates of future uranium prices, which assume market prices will revert
to the Company’s assessment of the long term average price, generally over a period of three to five years.
The recoverable amount is dependent on the life of the ore body together with the term of the mining lease. It reflects expected future
cashflows contained in the long term asset plan with an adjustment of cashflows expected to take into account project development
risk. The Company has projected cashflows for the period of the current mining lease, together with a ten year renewal period.
The discount rate applied to the future cash flow forecasts represent an estimate of the rate the market would apply having regard to
the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted.
Energy Resources of Australia Ltd | Financial Report 2012
93
Notes to the Consolidated Financial Statements
13 Property, plant and equipment
CONSOLIDATED
yEAR ENDED 31 DECEMBER 2012
MINE LAND AND
BUILDINGS
$’000
pLANT AND
EQUIpMENT
$’000
MINE
pROpERTIES
$’000
REHAB-
ILITATION
$’000
TOTAL
$’000
55,316
288,150
Net book amount
14,699
416,648
35,307
199,513
666,167
69,736
108,451
Opening net book amount
20,584
Additions
Disposals
Change in estimate
Transfers
-
-
-
-
377,204
160,750
(751)
-
-
-
-
-
-
Depreciation/amortisation charge
(5,885)
(120,555)
(20,009)
Impairment charge
Closing net book amount
Cost
Accumulated depreciation/amortisation
-
-
14,699
416,648
111,084
(96,385)
1,048,781
(632,133)
-
35,307
421,700
(386,393)
yEAR ENDED 31 DECEMBER 2011
Opening net book amount
24,508
Additions
Disposals
Change in estimate
Transfers
Depreciation/amortisation charge
Closing net book amount
Cost
Accumulated depreciation/amortisation
Net book amount
Assets under construction
-
-
-
50
(3,974)
20,584
111,084
(90,500)
20,584
336,782
97,426
(735)
-
(50)
(56,219)
377,204
888,782
(511,578)
377,204
-
-
-
-
(14,420)
55,316
421,700
(366,384)
55,316
390,913
1,972,478
(191,400)
(1,306,311)
-
-
76,609
-
(97,202)
(68,044)
199,513
-
-
231,011
-
(51,312)
288,150
741,254
160,750
(751)
76,609
-
(243,651)
(68,044)
666,167
539,477
97,426
(735)
231,011
-
(125,925)
741,254
382,348
1,803,914
(94,198)
(1,062,660)
288,150
741,254
The carrying amounts of the assets disclosed above include the following expenditure recognised in relation to property, plant and
equipment which is in the course of construction:
plant and equipment
2012
$’000
182,519
2011
$’000
35,460
94
Energy Resources of Australia Ltd | Financial Report 2012
Impairment charge Ranger cash generating unit
ERA assesses the recoverable amount of Ranger cash generating unit (CGU) based on the greater of fair value less costs to sell or
value in use. ERA has used the fair value less costs to sell method for the Ranger CGU, it has been determined based on discounted
cash flow modelling of a set of probability weighted strategic outcomes. In assessing impairment, estimates are required of resource
and development potential, future market prices, discount rate, exchange rates, rehabilitation, capital and production costs in order to
assist in the judgment of the recoverable amount.
When conducting this assessment, the ERA Board has adopted long term uranium price and exchange rate assumptions based on a
survey of a sample of brokers and financial institutions. In 2012, the results of this survey has shown a lower market view of the long
term uranium price outlook and a general strengthening of the Australian dollar when compared to the prior survey conducted in 2011.
These long term uranium price and exchange rate assumptions and the cumulative impact of increases in the rehabilitation cost
estimate over the period 2010 to 2012 has resulted in a reduction in the fair value of the Ranger CGU to the extent that a non cash
impairment of $68 million has been recognised, using a 9.25% discount rate.
A five per cent change in the long term Australia/US dollar exchange rate would change the recoverable amount by approximately
$116 million.
A five per cent change in the long term uranium price would change the recoverable amount by approximately $132 million.
ERA has announced that it will progress with the Ranger 3 Deeps exploration decline and has assigned a high probability that it will
progress into production phase at the successful completion of the exploration program. Should this or other strategic alternatives not
occur, it is likely that the Ranger CGU would face further impairment.
In recent years ERA has placed focus on ensuring adequate provision exists to cover rehabilitation activities. When the estimate
is increased by additional disturbance, change in discount rate or a change in estimate, the increase is capitalised into property
plant and equipment. Since 2010 this has resulted in a significant increase in this component of property plant and equipment.
ERA considers that this portion of property, plant and equipment is individually significant and contributes to impairment, as such the
impairment charge has been allocated completely to this component of property plant and equipment.
Energy Resources of Australia Ltd | Financial Report 2012
95
Notes to the Consolidated Financial Statements
14 Deferred tax liabilities
(A) DEfERRED TAX LIABILITy
The balance comprises temporary differences attributable to:
Amounts recognised in profit and loss
Property, plant and equipment
Investment in trust fund
Undeveloped properties
Inventories
Receivables
Total deferred tax liabilities
Off-set of deferred tax asset pursuant to set-off provisions (Note 14B)
Net deferred tax liabilities
Movements
Opening balance at 1 January
(Credited)/debited to the income statement (Note 5)
Under provided in prior years credited to the income statement
Closing balance at 31 December
(B) DEfERRED TAX ASSETS
The balance comprises temporary differences attributable to:
Amounts recognised in profit and loss
Tax losses
Rehabilitation
Employee provisions
Other
Amount recognised directly in equity
Transaction costs
Share benefits
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions (Note 14A)
Net deferred tax assets
Movements
Opening balance at 1 January
Credited to the income statement (Note 5)
Over provided in prior years credited to the income statement
Credited to equity (Note 5)
Closing balance at 31 December
2012
$’000
2011
$’000
9,845
18,615
23,405
33,558
752
86,175
(86,175)
-
93,722
(7,478)
(69)
86,175
36,776
65,936
4,765
15,097
122,574
2,157
(401)
124,330
(86,175)
38,155
95,876
28,419
69
(34)
124,330
29,811
17,766
23,405
18,728
4,012
93,722
(93,722)
-
112,568
(21,383)
2,537
93,722
23,437
60,924
3,765
4,521
92,647
3,596
(367)
95,876
(93,722)
2,154
61,642
30,659
346
3,229
95,876
96
Energy Resources of Australia Ltd | Financial Report 2012
15 Investment in trust fund
NON-CURRENT
Trust Fund
Trust fund
2012
$’000
2011
$’000
62,048
59,219
The Trust Fund holds a restricted fixed term investment in the form of bank bills which mature and are reinvested periodically.
The applicable weighted average interest rate for the year ended 31 December 2012 was 4.78% (2011: 5.47%).
16 Payables
CURRENT
Trade payables
Amounts due to related parties
Other payables
Total payables
17 Provisions – current
CURRENT
Employee benefits
Rehabilitation
Total current provisions
Movements in provisions
2012
$’000
90,242
8,000
2,000
100,242
2012
$’000
11,778
66,227
78,005
2011
$’000
59,480
18,854
1,904
80,238
2011
$’000
11,891
25,128
37,019
Movements in each class of provision during the financial year, other than employee benefits, are set out below:
CONSOLIDATED – 2012
Carrying amount at the start of the year
Payments
Transfer from non-current provision
Carrying amount at the end of the year
CONSOLIDATED – 2011
Carrying amount at the start of the year
Payments
Transfer from non-current provision
Carrying amount at the end of the year
Energy Resources of Australia Ltd | Financial Report 2012
REHABILITATION
$’000
25,128
(28,293)
69,392
66,227
REHABILITATION
$’000
18,750
(5,382)
11,760
25,128
97
Notes to the Consolidated Financial Statements
18 Provisions – non-current
NON-CURRENT
Employee benefits
Rehabilitation
Total non-current provisions
Movements in provisions
2012
$’000
2011
$’000
4,780
573,629
578,409
3,022
540,157
543,179
Movements in each class of provision during the financial year, other than employee benefits, are set out below:
CONSOLIDATED – 2012
Carrying amount at the start of the year
Unwinding of discount
Additional provisions recognised
Change in estimate
Change in discount rate
Transfer to current provision
Carrying amount at the end of the year
CONSOLIDATED – 2011
Carrying amount at the start of the year
Unwinding of discount
Additional provisions recognised
Change in estimate
Transfer to current provision
Carrying amount at the end of the year
REHABILITATION
$’000
540,157
26,255
34,968
22,355
19,286
(69,392)
573,629
REHABILITATION
$’000
295,882
25,022
10,796
220,217
(11,760)
540,157
98
Energy Resources of Australia Ltd | Financial Report 2012
19 Share capital
SHARE CApITAL
A Class shares fully paid
Total contributed equity
2012
SHARES
2011
SHARES
2012
$’000
2011
$’000
517,725,062
517,725,062
706,485
706,485
706,485
706,485
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the
number of shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll
each share is entitled to one vote.
Capital risk management
Details of the Group’s exposure to risks when managing capital are set out in Note 29.
Movement in ordinary share capital
ISSUE pRICE
NUMBER Of
SHARES
2011
$’000
CONSOLIDATED 2011
Opening balance January 2011
25 October 2011
Rights issue – institutional entitlement offer
21 November 2011
Rights issue – Retail entitlement offer
190,737,934
248,796,293
78,190,835
1.53
1.53
Transaction costs
Deferred tax on transaction costs
31 December 2011
Closing balance 31 December 2011
517,725,062
214,585
380,658
119,632
(11,986)
3,596
706,485
Rights issue
On 12 October 2011 the company invited its shareholders to subscribe to a rights issue of 326,987,128 ordinary shares at an issue
price of $1.53 per share on the basis of 12 shares for every 7 fully paid ordinary shares held, with such shares to be issued on, and
rank for dividends after, 25 October 2011 for the institutional entitlement and 21 November 2011 for the retail entitlement. The issue
was fully subscribed.
Energy Resources of Australia Ltd | Financial Report 2012
99
Notes to the Consolidated Financial Statements
20 Reserves and retained profits
RESERVES
Share-based payments reserve
Capital reconstruction
Total Reserves
Movements
Share-based payments reserve
Balance 1 January
Option expense
Balance 31 December
Capital reconstruction
Balance 1 January
Movements
Balance 31 December
RETAINED pROfITS
Movements in retained profits were as follows:
Opening retained earnings – 1 January
Net loss for the year
Dividends paid
Closing retained earnings/(accumulated losses) – 31 December
Nature and purpose of reserves
Share-based payments reserve
2012
$’000
2011
$’000
801
389,500
390,301
959
389,500
390,459
959
(158)
801
1,800
(841)
959
389,500
389,500
-
-
389,500
389,500
191,592
(218,759)
-
345,191
(153,599)
-
(27,167)
191,592
The share based payments reserve is used to recognise the fair value of equity instruments issued to employees but not exercised.
Capital reconstruction reserve
In June 1995, ERA reduced its share capital by cancelling $0.95 of the capital paid up on each issued share and reducing the par
value of each issued share from $1.00 to $0.05. The cancelled capital (comprising $389,500,000 in total) was credited to a Capital
Reconstruction Reserve. The Company has the ability to distribute capital to shareholders from this reserve.
100
Energy Resources of Australia Ltd | Financial Report 2012
21 Contingencies
Contingent liabilities
Legal actions against Energy Resources of Australia Ltd.
The remaining argument in the action listed in the Federal Court against the former Commonwealth Minister for Resources and ERA
claiming that due process was not followed in granting approvals for the Jabiluka Mill Alternative is dormant. Should ERA proceed
with the Jabiluka Mill Alternative, notice will be given to the applicant who may or may not wish to pursue the argument further.
No material losses are anticipated in respect of of the contingent liabilities disclosed above.
22 Commitments
Capital commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Within one year
Lease commitments
Operating leases
Future operating lease rentals not provided for in the financial statements and payable:
Commitments in relation to leases contracted for at the
reporting date but not recognised as liabilities, payable
Within one year
Later than one year but not later than five years
Total operating leases
2012
$’000
95,337
2011
$’000
64,664
3,468
4,375
7,843
3,899
7,059
10,958
The consolidated entity leases property, plant and equipment under operating leases expiring between one and four years. Some
leases provide the consolidated entity with a right of renewal at which time all terms are renegotiated. Lease payments comprise a
base amount and may include an incremental contingent rental.
Mineral tenement leases
Future mineral tenement lease payments not provided for in the financial statements and payable:
Within one year
Later than one year but not later than five years
Later than five years
Total mineral tenement leases
73
291
485
849
73
291
558
922
In order to maintain current rights of tenure to mining tenements, the consolidated entity will be required to outlay an amount of
approximately $73,000 in the year ending 31 December 2013 in respect of tenement lease rentals.
Energy Resources of Australia Ltd | Financial Report 2012
101
Notes to the Consolidated Financial Statements
ERA is liable to make payments to the Commonwealth as listed below:
(i) An annual amount equal to the sum payable by the Commonwealth to the Northern Land Council pursuant to the Section 44
Agreement Aboriginal Land Rights (Northern Territory) Act 1976 for rent for the duration of the agreement. This amounts to
$911,926 per annum for 2013 and is indexed for future years.
(ii) Amounts equal to the sums payable by the Commonwealth to the Aboriginal Benefits Reserve pursuant to a determination under
Section 63(5) (b) of the Aboriginal Land Rights (NT) Act 1976. These amounts were calculated at 4.25 per cent until 30 June 2012.
On execution of a suite of agreements between ERA, the Commonwealth and the Northern Land Council a revised rate of 2.5 per
cent was payable to the Commonwealth from 1 July 2012 and 1.75 per cent payable to the Northern Land Council or an entity
representing the Mirarr Traditional Owners as directed by the Northern Land Council (amounts paid during 2012: $15,948,383.
2011: $12,481,746).
(iii) Amounts equal to sums payable by the Commonwealth to the Northern Territory pursuant to an understanding in respect of
financial arrangements between the Commonwealth and the Government of the Northern Territory. These amounts are also
calculated as though they were royalties and the relevant rate is 1.25 per cent of Ranger net sales revenue (amounts paid during
2012: $4,690,701. 2011: $3,671,102).
ERA is liable to make payments to the Northern Land Council (NLC) pursuant to the Section 43 Agreement (Aboriginal Land Rights
(NT) Act 1976) between Pancontinental Mining Limited and Getty Oil Development Company Limited and the NLC dated 21 July
1982, which was assigned to ERA with the consent of the NLC, as listed below:
(i) Up front payment of $3,400,000 on the commencement of production at Jabiluka.
(ii) Annual royalty payments calculated at 4.5 per cent of net sales revenue less $500,000 less any amounts paid to the Aboriginal
Benefits Reserve by the Commonwealth under the conditions specified in the mineral lease for the first 10 years and thereafter
at 5 per cent of net sales revenue less any amounts paid to the Aboriginal Benefits Reserve by the Commonwealth under the
conditions specified in the mineral lease (refer commitment below).
ERA is liable to make payments to the Commonwealth in respect of the Jabiluka project pursuant to the conditions attached to the
Mineral Lease. The amount payable was, until 30 June 1990, calculated at the rate of 5.25 per cent of net sales revenue from the
Jabiluka project. The Jabiluka project is now under long term care and maintenance and will not be developed without the approval of
the Mirarr Tradition Owners.
23 Auditor’s remuneration
During the year the auditor of the parent entity and its related practices earned the following remuneration:
AUDIT SERVICES
pricewaterhouseCoopers Australian firm
Audit and review of financial reports
Other services
Total remuneration of pricewaterhouseCoopers Australia
2012
$’000
2011
$’000
361
-
361
350
285
635
102
Energy Resources of Australia Ltd | Financial Report 2012
24 Related parties
Directors
The names of persons who were Directors of ERA at any time during the financial period are as follows:
H Garnett, D Klingner, R Atkinson, P Taylor, J Pegler, M Coulter (resigned 20 November 2012), P McMahon (appointed 20 November
2012) and H Newell (appointed 20 November 2012).
Information relating to Directors’ compensation, shareholdings and retirement benefits is set out in the Remuneration Report in the
Directors’ Report.
Key management personnel
key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
2012
$’000
4,376
368
664
5,408
2011
$’000
3,907
409
688
5,004
In compliance with Corporations Regulations 2001 2M.3.03 the Company has provided detailed remuneration disclosures in the
Directors report. The relevant information can be found in the remuneration report on pages 49 to 67.
Loans with Directors and key management personnel
There are no loans with Directors or key management personnel during 2012 (2011: nil).
Transactions with Directors and Director-related entities
There were no transactions with Director related entities other than Rio Tinto Limited during 2012 (2011: Nil). Details of transactions
with Rio Tinto Limited are outlined on page 104.
Controlled entity
Information relating to the controlled entity is set out in Note 25.
Ultimate parent entity
The ultimate parent entity is Rio Tinto Limited. This interest is held through North Limited (incorporated in Victoria, Australia) which
has beneficial ownership of 68.4 per cent of the issued ordinary shares of the Company. North Ltd owns 34.1 per cent directly and the
remaining 34.3 per cent through its subsidiary, Peko Wallsend Ltd.
Interest income
Interest income is received from Rio Tinto Finance Ltd which holds cash on behalf of the Company.
Energy Resources of Australia Ltd | Financial Report 2012
103
Notes to the Consolidated Financial Statements
Transactions with related parties
The following transactions occurred with related parties:
Management services fees paid to ultimate parent entity:
Rio Tinto Group Companies
Consulting fees paid to:
Rio Tinto Group Companies
Other re-imbursements for commercial services:
Rio Tinto Group Companies
Amounts received from related parties:
Rio Tinto Group Companies – other
Rio Tinto Group Companies – interest
Dividends paid to:
Related parties – North Ltd
Related parties – Peko Wallsend Ltd
2012
$’000
2011
$’000
1,600
1,600
11,800
10,007
46,528
103,571
1,855
12,827
41,223
9,721
-
-
-
-
Consulting fees paid to Rio Tinto Group Companies relate to technical services for major projects.
Other reimbursements for commercial services include the purchase of uranium oxide at market price (2012: $28,461,857 and 2011:
$79,326,774).
Amounts received from related parties include sales of uranium oxide at market price.
Outstanding balances arising from sales/purchases of goods and services
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Aggregate amounts receivable from and payable to each class
of other related parties at balance date were as follows:
Current assets – cash assets
Related parties – Rio Tinto Finance Ltd
Current assets – receivables
Related parties – Rio Tinto Group Companies
Current liabilities – creditors
Related parties – Rio Tinto Group Companies
206,527
420,938
94
81
8,000
18,854
All related party transactions were conducted on commercial terms and conditions and at market rates.
104
Energy Resources of Australia Ltd | Financial Report 2012
25 Investment in controlled entity
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in Note 1(b):
NAME Of ENTITy
EWL Sciences Pty Ltd
COUNTRy Of
INCORpORATION
Australia
CLASS Of
SHARES
Ordinary
2012
%
100
2011
%
100
EQUITy HOLDING
The above controlled entity is wholly-owned and no dividends were paid to the parent entity (2011: $Nil).
On 28 November 2012, ERA resolved that EWL Sciences Pty Ltd be wound up as a member’s voluntary liquidation. On the same
day, Simon Wallace-Smith and Salvatore Algeri of Deloitte Touche Tohmatsu were appointed to act as joint and several liquidators of
the Company.
26 Segment information
Description of segments
Management has determined the operating segment based on the reports reviewed by the Chief Executive that are used to make
strategic decisions.
The Chief Executive considers the business from a product prospective and has identified only one reportable segment in the year
ended 31 December 2012, being the mining, processing and selling of uranium. There are no other unallocated operations.
Primary reporting – business segments
The segment information provided to the Chief Executive for the reportable segment is as follows:
Total segment revenue
Revenue from external customers
Other revenue
Total segment revenue
Segment result
Income tax expense
profit for the year
Segment assets
Total assets
Segment liabilities
Total liabilities
Acquisitions of non-current assets
Depreciation and amortisation expense
Net loss on sale of property, plant and equipment
URANIUM
2012
$’000
422,849
396,629
26,220
422,849
(218,759)
36,026
(218,759)
1,826,275
1,826,275
756,656
756,656
160,750
243,651
722
2011
$’000
667,849
651,381
16,468
667,849
(206,340)
52,741
(153,599)
1,948,972
1,948,972
660,436
660,436
97,426
125,925
713
Energy Resources of Australia Ltd | Financial Report 2012
105
Notes to the Consolidated Financial Statements
Other segment information
Segment revenue
The revenue from external parties reported to the Chief Executive is measured in a manner consistent with that in the income
statement.
Revenues from external customers are derived from the sale of uranium. A breakdown of revenue and results is provided in the tables
above. Segment revenue reconciles to total revenue from continuing operations as disclosed in note 3.
The consolidated entity is domiciled in Australia. The result of its revenue from external customers in other countries is outlined in the
table below:
Asia
United States
Europe
SEGMENT REVENUES
fROM SALES TO
EXTERNAL CUSTOMERS
2012
$’000
58,894
291,984
44,521
395,399
2011
$’000
165,714
396,860
86,639
649,213
Segment revenues are allocated based on the country in which the customer is located.
Segment assets
The amounts provided to the Chief Executive with respect to total assets are measured in a manner consistent with that of the
financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset.
Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories, property, plant
and equipment and other assets, net of provisions.
All assets of the consolidated entity as at 31 December 2012 are in Australia with the exception of inventories in transit or at
converters of $55,973,835 (2011 – $28,334,413). All acquisitions of property, plant and equipment and other non-current assets
occurred in Australia.
Segment liabilities
The amounts provided to the Chief Executive with respect to total liabilities are measured in a manner consistent with that of the
financial statements. These liabilities are allocated based on the operations of the segment. Segment liabilities consist primarily of
trade and other creditors, employee entitlements and provisions. The consolidated entity does not have any borrowings or derivative
financial instruments as at 31 December 2012.
106
Energy Resources of Australia Ltd | Financial Report 2012
27 Reconciliation of loss after income tax to net cash inflow/(outflow) from
operating activities
Loss for the year
Add/(less) items classified as investing/financing activities:
Net (gain)/loss on sale of non-current assets
Add/(less) non-cash items:
Depreciation and amortisation
Non cash impairment charge
Rehabilitation provision: unwinding of discount
Employee benefits: share based payments
Net exchange differences
Deferred tax on share issue costs
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
(Increase)/decrease in net provision for deferred tax assests
(Increase)/decrease in other assets
(Increase)/decrease in investment in trust fund
(Decrease)/increase in payables
(Decrease)/increase in current tax liabilities
(Decrease)/increase in provisions
Net cash inflow/(outflow) provided from operating activities
2012
$’000
2011
$’000
(218,759)
(153,599)
722
713
243,651
125,925
68,044
26,255
1,037
(2)
-
25,046
(107,408)
(36,001)
(135)
(2,829)
20,004
3,698
(26,647)
(3,324)
-
25,022
61
-
3,596
5,650
111,820
(53,080)
198
(3,406)
(13,834)
9,006
(3,156)
54,916
Energy Resources of Australia Ltd | Financial Report 2012
107
Notes to the Consolidated Financial Statements
28 Earnings per share
Basic earnings per share
Diluted earnings per share
2012
CENTS
(42.3)
(42.3)
2011
CENTS
(29.7)
(29.7)
Earnings used in the calculation of basic and diluted earnings per share: 2012: ($218,758,940) (2011: ($153,598,511))
Weighted average number of ordinary shares on issue used in calculation of basic earnings per share: 2012: 517,725,062 shares
(2011: 517,725,062).
Options
Options granted to employees are granted under the share-based payment plans are for options in Rio Tinto plc and Rio Tinto Ltd.
Therefore, the options have not been included in the determination of diluted earnings per share. Details relating to the options are set
out in Note 32.
29 Financial risk management
ERA carries out risk management under policies approved by the Board of Directors. The Board provides principles for overall risk
management, as well as written policies covering specific areas, such as mitigating interest rate and other risks, use of derivative and
non-derivative financial instruments. The subsidiary does not utilise any financial instruments, and as such, sensitivities are identical
for both parent and group.
The Group’s business is mining and not trading. Accordingly, the Group only contracts to sell uranium that it plans to produce,
however purchasing uranium for resale may be required in circumstances where actual production falls short of contractual sales
volumes. The Group operates entirely in Australia and is exposed primarily to Australian dollar denominated costs. Sales are
denominated in US dollars.
Market risk
foreign exchange risk
ERA markets its products internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily
with respect to the US dollar. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
that are denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash
flow forecasting. It is no longer group policy to hedge against foreign exchange risk, all legacy financial instruments held in the form of
foreign exchange contracts expired during 2009.
The Group’s exposure to foreign currency risk at the reporting date was as follows:
Trade receivables
Trade payable
Group sensitivity
2012
USD
$’000
35,738
896
2011
USD
$’000
60,842
10,888
At 31 December 2012, had the Australian Dollar weakened/strengthened by 10% against the US Dollar with all other variables
held constant, the change in trade receivables would have effected post-tax profit for the year by $2,399,099 higher/lower (2011:
$5,458,042 higher/lower).
At 31 December 2012, had the Australian Dollar weakened/strengthened by 10% against the US Dollar with all other variables held
constant, the change in trade payables would have effected post-tax profit for the year by $58,624 higher/lower (2011: $1,074,453
higher/lower).
108
Energy Resources of Australia Ltd | Financial Report 2012
Commodity price risk
In the absence of uranium being traded on global futures exchanges, the Group uses a combination of both fixed and market price
related contracts for future sales to manage this exposure. No financial instruments are used by the group to manage commodity
price risk.
Interest rate risk
The Group’s main interest rate risk arises from cash on deposit. When cash is surplus to operational and investing requirements it
is invested in lump sum deposits to maximise interest received. In addition, the Group is exposed to interest rate risk on cash in the
investment trust fund.
Credit risk
The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales of products are made
to customers with an appropriate credit history. Where customers are rated by an independent credit rating agency, these ratings are
used to set credit limits. If no independent rating exists, the credit quality of the customer is subject to extensive assessment. Letters
of credit and other forms of credit insurance are also used as required. Derivative counterparties, cash transactions and cash invested
through the investment/trust fund are limited to high credit quality financial institutions. The Group has policies that limit the amount of
credit exposure to any one financial institution.
TRADE RECEIVABLES
AA
A
BBB
Other
Liquidity and capital risk
2012
$’000
-
-
34,448
-
2011
$’000
32,507
10,836
16,695
-
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
The Group does not have a target debt to equity ratio, but has a policy of maintaining a flexible financing structure to be able to fund
capital expenditure programmes, pay dividends and fund expansion opportunities as they arise. This policy is balanced against the
desire to ensure efficiency in the debt/equity structure of the Group’s balance sheet in the longer term through pro-active capital
management programmes.
Fair value estimation
The carrying value less impairment provision of trade receivables and payables is a reasonable approximation of their fair values due
to the short-term nature of these amounts.
Energy Resources of Australia Ltd | Financial Report 2012
109
Notes to the Consolidated Financial Statements
30 Parent entity financial information
(i) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Reserves
Capital reconstruction
Share-based payments
Retained earnings
Profit or loss for the year
Total comprehensive income
(ii) No guarantees have been provided by the parent entity.
2012
$’000
2011
$’000
718,389
830,580
1,826,275
1,949,740
178,248
756,656
117,257
660,436
706,485
706,485
389,500
801
(27,167)
(218,759)
(218,759)
389,500
959
192,360
(153,599)
(153,599)
(iii) The commitments for the parent entity are consistent with those reported in Note 22 for the consolidated entity.
31 Events subsequent to balance date
No matters or circumstances have arisen since the end of the financial year that have significantly affected, or may significantly affect
the operations or state of affairs of the consolidated entity in subsequent financial years.
110
Energy Resources of Australia Ltd | Financial Report 2012
32 Share-based payments
ERA participates in a number of share-based payment plans administered by Rio Tinto plc and Rio Tinto Limited, which are described
in detail in the Remuneration Report. These plans have been accounted for in accordance with the fair value recognition provisions of
AASB2, ‘Share-based Payments’, which means that AASB2 has been applied to all grants of employee share-based payments that
had not vested as at 1 January 2004.
Performance Share Plan
With effect from 2010, the policy for settling awards granted under the Performance Share Plan (PSP) formerly known as the Mining
Companies Comparative Plan changed. For settlement of all future awards under this plan, participants will be assigned shares and
offered a third party facility to realise these shares for cash and/or to meet any tax liabilities.
The fair value awards granted under the PSP have been calculated at their dates of grant using valuation models, including an
independent lattice-based option valuation model and a Monte Carlo valuation model which takes into account the constraints on
vesting and exercise attached to these awards. Forfeitures are assumed prior to vesting at three per cent per annum of outstanding
awards. The awards are accounted for in accordance with the requirements applying to equity-settled sharebased payments
transactions.
A summary of the status of shares granted under the share plan at 31 December 2012, and changes during the year, is
presented below:
BALANCE
AT START
Of THE
yEAR
GRANTED
DURING
THE yEAR
TRANSfERS
IN/(OUT)
EXERCISED
DURING
THE yEAR
fORfEITED
DURING
THE yEAR
BALANCE
AT END Of
THE yEAR
VESTED
AND EXER-
CISABLE AT
END Of
THE yEAR
9,972
4,079
561
$77.19
$60.31
$63.73
2,899
727
(2,647)
£38.62
£34.46
£37.46
-
-
-
-
(76)
14,536
$60.31
$72.02
-
-
979
£38.66
12,011
3,607
$74.92
$81.00
3,242
1,164
£32.77
£40.58
-
-
-
-
(3,177)
(2,469)
9,972
$74.79
$74.79
$77.19
(837)
(670)
2,899
£26.81
£26.81
£38.62
-
-
-
-
-
-
-
-
CONSOLIDATED – 2012
Rio Tinto Limited
Weighted average
exercise price
Rio Tinto plc
Weighted average
exercise price
CONSOLIDATED – 2011
Rio Tinto Limited
Weighted average
exercise price
Rio Tinto plc
Weighted average
exercise price
The weighted average share price at the date of exercise of rights to shares exercised regularly during the year ended 31 December
2012 was Nil (no shares were exercised) (2011: $76.21).
The weighted average remaining contractual life of rights to shares outstanding at the end of the period was 2 years (2011: 3 years).
Where options are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these options.
Energy Resources of Australia Ltd | Financial Report 2012
111
Notes to the Consolidated Financial Statements
Share Option Plan
It is policy to settle these awards in equity, although the participants at their discretion can be offered a cash alternative. The awards
are accounted for in accordance with the requirements applying to equity-settled share-based payment transactions. The performance
conditions in relation to Total Shareholder Return have been incorporated in the measurement of fair value for these awards by
modelling the correlation between Rio Tinto‘s TSR and that of the index. The relationship between Rio Tinto‘s TSR and the index was
simulated many thousands of times to derive a distribution which, in conjunction with the lattice-based option valuation model, was
used to determine the fair value of the options.
A summary of the status of options granted under the plan at 31 December 2012, and changes during the year, is presented below:
BALANCE
AT START
Of THE
yEAR
GRANTED
DURING
THE yEAR
TRANSfERS
IN/(OUT)
EXERCISED
DURING
THE yEAR
fORfEITED
DURING
THE yEAR
BALANCE
AT END Of
THE yEAR
VESTED
AND EXER-
CISABLE
AT END Of
THE yEAR
CONSOLIDATED – 2012
Rio Tinto Limited
Weighted average
exercise price
Rio Tinto plc
Weighted average
exercise price
CONSOLIDATED – 2011
Rio Tinto Limited
Weighted average
exercise price
Rio Tinto plc
Weighted average
exercise price
17,402
$32.42
3,219
£16.53
20,422
$35.75
3,219
£16.53
-
-
-
-
-
-
-
-
-
-
(6,613)
$23.33
(2,033)
£16.53
-
-
-
-
-
-
(3,020)
$54.95
-
-
-
-
-
-
-
-
-
-
10,789
10,789
$37.99
$37.99
1,186
1,186
£16.53
£16.53
17,402
12,032
$32.42
$31.96
3,219
£16.53
-
-
The weighted average share price at the date of exercise of options exercised regularly during the year ended 31 December 2012 was
$67.53 (2011: $87.89).
The weighted average remaining contractual life of share options outstanding at the end of the period was 0 years (2011: 1 years).
Where options are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these options.
112
Energy Resources of Australia Ltd | Financial Report 2012
Share Savings Plan
Awards under these plans are settled in equity and accounted for accordingly. The fair value of each award on the day of grant was
estimated using a lattice-based option valuation model, including allowance for the exercise price being at a discount to market price.
A summary of the status of options granted under the plan at 31 December 2012, and changes during the year, is presented below:
BALANCE
AT START
Of THE
yEAR
51,255
$55.08
47,124
$54.69
CONSOLIDATED – 2012
Rio Tinto Limited
Weighted average
exercise price
CONSOLIDATED – 2011
Rio Tinto Limited
Weighted average
exercise price
GRANTED
DURING
THE yEAR
TRANSfERS
IN/(OUT)
EXERCISED
DURING
THE yEAR
fORfEITED
DURING
THE yEAR
BALANCE
AT END Of
THE yEAR
VESTED
AND EXER-
CISABLE
AT END Of
THE yEAR
-
-
(2,003)
(1,221)
(9,585)
38,446
13,435
$59.28
$58.34
$55.91
$54.55
$53.64
16,927
$59.26
(2,425)
$56.00
(6,654)
$60.07
(3,717)
$58.59
51,255
$55.08
2,476
$62.26
The weighted average share price at the date of exercise of options exercised regularly during the year ended 31 December 2012 was
$68.39 (2011: $85.15).
The weighted average remaining contractual life of share options outstanding at the end of the period was 2 years (2011: 3 years).
Where options are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these options.
Energy Resources of Australia Ltd | Financial Report 2012
113
Notes to the Consolidated Financial Statements
Management Share Plan
The Management Share Plan was introduced in 2007 and is described in the Remuneration Report. The awards will be settled in
equity including the dividends accumulated from date of award to vesting. The awards are accounted for in accordance with the
requirements applying to equity-settled share-based payment transactions. The fair value of each award on the day of grant is set
equal to share price on the day of grant. Forfeitures are assumed prior to vesting at three per cent per annum of outstanding awards.
A summary of the status of shares granted under the share plan at 31 December 2012, and changes during the year, is
presented below:
BALANCE
AT START
Of THE
yEAR
GRANTED
DURING
THE yEAR
TRANSfERS
IN/(OUT)
EXERCISED
DURING
THE yEAR
fORfEITED
DURING
THE yEAR
BALANCE
AT END Of
THE yEAR
VESTED
AND EXER-
CISABLE
AT END Of
THE yEAR
CONSOLIDATED – 2012
Rio Tinto Limited
17,019
4,897
746
(6,965)
(758)
14,939
Weighted average fair value
at grant date
Rio Tinto plc
Weighted average fair
value at grant date
CONSOLIDATED – 2011
$67.21
$58.83
$58.19
$52.01
$67.00
$71.01
10,431
1,505
(4,413)
(4,979)
£30.02
35.62
37.75
£19.82
Rio Tinto Limited
15,633
3,864
Weighted average fair value
at grant date
$73.04
$81.62
Rio Tinto plc
9,327
2,369
Weighted average fair value
at grant date
£30.36
£40.75
-
-
-
-
(2,478)
$126.48
(1,265)
£52.58
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,544
£38.67
17,019
$67.21
10,431
£30.02
The weighted average share price at the date of exercise of conditional grants of shares exercised regularly during the year ended
31 December 2012 was $60.17 (2011: $84.75).
The weighted average remaining contractual life of conditional grants of shares outstanding at the end of the period was 3 years
(2011: 3 years).
The model inputs for conditional rights granted during the year ended 31 December 2012 included:
(a) rights are granted for no consideration and have a three year life
(b) exercise price: – (2011: – )
(c) grant date: 19 March 2012 (2011: 21 March 2011)
(d) expiry date: 19 March 2015 (2011: 21 March 2014)
(e) share price at grant date: $65.85 (2011: $81.00)
Where options are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these options.
114
Energy Resources of Australia Ltd | Financial Report 2012
Bonus Deferral Plan
The Bonus Deferral Plan was introduced during 2009 and is made up of two parts: the Bonus Deferral Award and the Company
Contributed Award. The Bonus Deferral Award was established for the mandatory deferral of a specific percentage of the Chief
Executive’s Short Term Incentive Plan bonus payment into Rio Tinto shares. In addition, in order to enhance retention of key
employees the Company Contributed Award was made in 2009 in respect of a specific percentage of the gross annual basic salary
for the Chief Executive. The vesting of these awards is dependent only on service conditions being met. The awards will be settled
in equity including the dividends accumulated from date of award to vesting. The awards are accounted for in accordance with the
requirements applying to equity-settled share based payment transactions. The fair value of each award on the day of grant is equal to
the share price on the day of grant less a small adjustment for the timing of dividends vesting. Forfeitures are assumed prior to vesting
at three per cent per annum of outstanding awards.
BALANCE
AT START
Of THE
yEAR
GRANTED
DURING
THE yEAR
TRANSfERS
IN/(OUT)
EXERCISED
DURING
THE yEAR
fORfEITED
DURING THE
yEAR
BALANCE
AT END Of
THE yEAR
VESTED
AND EXER-
CISABLE
AT END Of
THE yEAR
CONSOLIDATED – 2012
Rio Tinto Limited
Weighted average fair
value at grant date
CONSOLIDATED – 2011
Rio Tinto Limited
Weighted average fair
value at grant date
292
973
$81.00
$65.85
1,484
341
$51.24
76.73
-
-
-
-
-
(1,533)
$51.24
-
-
-
-
1,265
$69.35
292
$81.00
-
-
-
-
The weighted average share price at the date of exercise of rights to shares exercised regularly during the year ended 31 December
2012 was Nil (no options were exercised during the year) (2011: $86.36).
The weighted average remaining contractual life of share awards outstanding at the end of the period was 2 years (2011: 1 years).
Where options are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these options.
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense
were as follows:
Share based payment expense
2012
$’000
1,037
2011
$’000
61
Energy Resources of Australia Ltd | Financial Report 2012
115
Directors’ Declaration
In the Directors’ opinion:
(a) the financial statements and notes set out on page 76 to 115 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
(ii) giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2012 and of its performance for the
financial year ended on that date; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable. Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive and Chief Financial Officer required by section 295A of the
Corporations Act 2001. This declaration is made in accordance with a resolution of the directors.
Dr D klingner
Director
Melbourne
8 February 2013
116
Energy Resources of Australia Ltd | Financial Report 2012
Independent Auditor’s Report
Energy Resources of Australia Ltd | Financial Report 2012
117
Independent Auditor’s Report
118
Energy Resources of Australia Ltd | Financial Report 2012
Shareholder Information
Energy Resources of Australia Ltd is a company limited by shares, incorporated and domiciled in Australia.
The financial statements were authorised by directors on 8 February 2013. The directors have the power to amend and reissue the
financial statements.
The shareholder information set out below was applicable as at 31 January 2013.
Distribution of equity securities
Analysis of numbers of registered equity security holders by size of holding:
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
A CLASS
ORDINARy SHARES
NUMBER
Of SHARE-
HOLDERS
% Of
SHARE-
HOLDERS
NUMBER
Of SHARES
% Of
ISSUED
SHARES
8,524
4,885
1,641
1,592
83
16,725
50.97
29.21
9.81
9.52
0.49
100
3,165,358
12,506,780
11,912,182
38,921,237
451,219,505
517,725,062
0.61
2.42
2.30
7.52
87.15
100.00
There were 4,991 holders of less than a marketable parcel of ordinary shares.
Equity security holders
The names of the twenty largest registered holders of quoted equity securities are listed below:
Peko Wallsend Ltd
North Limited
J P Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
JP Morgan Nominees Australia Limited
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
ABN Amro Clearing Sydney Nominees Pty Ltd
QIC Limited
Boda Investments Pty Ltd
Ariki Investments Pty Ltd
HSBC Custody Nominees (Australia) Limited
Ganra Pty Ltd
Mr Ignazio Gaetano Lo Castro
UBS Nominees Pty Ltd
John E Gill Trading Pty Ltd
Dr Hanh Nguyen
Burleigh Heads Holdings Pty Ltd
Energy Resources of Australia Ltd | Financial Report 2012
NUMBER
Of SHARES
177,535,718
176,543,136
24,450,609
17,433,992
12,387,558
11,416,434
6,084,425
4,062,099
1,796,707
1,014,185
935,604
868,572
750,000
670,228
651,429
649,769
619,906
531,000
512,143
475,000
% Of
ISSUED
SHARES
34.29%
34.10%
4.72%
3.37%
2.39%
2.21%
1.18%
0.78%
0.35%
0.20%
0.18%
0.17%
0.14%
0.13%
0.13%
0.13%
0.12%
0.10%
0.10%
0.09%
119
Shareholder Information
Entitlements to vote
Subject to any rights or restrictions for the time being attached to any shares on a show of hands, every member present in person or
by proxy or by attorney or by representative and entitled to vote shall have one vote.
On a poll, every member present in person or by proxy or by attorney or by representative shall have one vote for each share held by him/her.
Annual general meeting
The next AGM will be held at 10am on Wednesday 10 April 2013 in Darwin, Northern Territory, Australia.
Tax file numbers
Tax file numbers or exemption details are recorded from shareholders who wish to provide the information. Dividend advice
statements, when issued to shareholders, indicate whether or not a shareholder’s tax file number has been recorded. ERA normally
pays fully franked dividends. In the event of an unfranked dividend being paid, ERA will be required to deduct tax at the top marginal
rate from the dividend paid to shareholders resident in Australia who have not supplied a tax file number or exemption form.
Information on shareholding
Shareholders who require information about their shareholding or dividend payment should contact ERA’s principal registry.
Shareholders who have changed their address should advise the change in writing to:
ERA Share Registry
Computershare Investor Services Pty Ltd
117 Victoria Street
West End QLD 4101
Telephone: +61 (0) 3 9473 2500
Facsimile: +61 (0) 3 9415 4000
Sponsored shareholders should note, however, that they should contact their sponsored broker to initiate a change of address.
120
Energy Resources of Australia Ltd | Financial Report 2012
2012 ASX Announcements
26 November 2012
Financial Community Presentation November 2012
20 November 2012
Director Appointment/Resignation
11 October 2012
September 2012 Quarter Operations Review
31 July 2012
Share Trading Policy
26 July 2012
June 2012 Half Year Results Presentation
26 July 2012
June 2012 Half Year Results
26 July 2012
ASX Interim Report – 30 June 2012
11 July 2012
Quarterly Activities Report
19 June 2012
Financial Community visit to Ranger
14 June 2012
ERA Board approves Ranger 3 Deeps mine Prefeasibility Study
1 June 2012
SandP indices Announces June Quarterly Rebalance
1 May 2012
Ranger 3 Deeps exploration decline commences
16 April 2012
Financial Community Presentation April 2012
11 April 2012
2012 Annual General Meeting – Results of Voting
11 April 2012
Chief Executive’s Address – 2012 Annual General Meeting
11 April 2012
Chairman’s Address – 2012 Annual General Meeting
10 April 2012
March 2012 Quarter Operations Review
30 March 2012
Ranger 3 Deeps explorations decline Contract Awarded
8 March 2012
Annual General Meeting Proxy Form
8 March 2012
Notice of Annual General Meeting
8 March 2012
Annual Report to Shareholders
1 March 2012
Joint Media release: ERA/GAC Water Initiatives
1 February 2012
2011 Full Years Results Presentation
1 February 2012
Annual Statement of Reserves and Resources
1 February 2012
2011 Full Year Results Announcement
1 February 2012
Preliminary Final Report
12 January 2012
December 2011 Quarter Operations Review
Details of these announcements are available at www.energyres.com.au.
Energy Resources of Australia Ltd | Financial Report 2012
121
Ten Year Performance
yEAR ENDED 31
DECEMBER
2012
2011
2010
2009
2008
2007
2006
2005
20041
2003
(36,026)
68,745
62,247
18,640
43,607
369,629 651,381 572,283 768,297 496,359 357,080 312,698 262,036 236,270 196,216
47,726 374,737 317,957 108,012
98,366
59,427 382,053 312,569
22,277
12,423 109,479
90,784
76,089
47,004 272,574 221,785
Sales Revenue ($000)
Earnings Before Interest
35,298
(278,266) (220,633)
and Tax ($000)
35,546
(254,785) (206,340)
Profit Before Tax ($000)
15,674
(52,741)
Income Tax Expense ($000)
(218,759) (153,599)
19,872
Profit After Tax ($000)
Total Assets ($000)
1,826,275 1,948,972 1,423,396 1,359,131 1,170,409 985,353 869,350 864,162 862,875 756,327
Shareholders’ Equity ($000) 1,069,619 1,288,536 951,076 966,574 758,926 606,021 552,491 539,764 509,819 614,345
-
Long Term Debt ($000)
4.0
Current Ratio
1.9
Liquid Ratio
-
Gearing Ratio (%)
Interest Cover (times)
48.0
Return on Shareholders’
Equity (%)
Earnings Per Share (cents)
Dividends Per Share (cents)
Payout Ratio (%)
-
7.1
6.0
-
(177.9)
-
4.0
2.9
-
(156.7)
65,452
59,620
18,554
41,066
42,773
39,239
2,193
37,046
(11.9)
(29.7)2
-
-
(20.5)
(42.3)
-
-
31.6
142.9
39.0
27
-
3.4
2.1
-
47.8
-
3.1
2.2
-
33.5
-
1.8
1.0
-
7.79
29.2
116.3
28.0
24
13.1
39.9
20.0
28
4.9
24.6
8.0
32
8.0
22.9
17.0
74
7.6
21.5
17.0
80
7.3
19
17.0
88
3.2
10
11.0
106
-
3.6
2.1
-
6.3
-
3.8
2.3
-
6.5
-
1.5
0.8
-
5.6
-
5.2
3.1
-
4.7
Share Price ($) closing
Price-Earning Ratio
Dividend Yield (%)
Net Tangible Assets per
Share ($)
No. of Employees
Profit After Tax per
Employee ($000)
Ore Mined (million tonnes)
Ore Milled (million tonnes)
Mill Head Grade (% U3O8)
Mill Recovery (%)
Production (tonnes U3O8) –
Drummed
Sales – Ranger
Concentrates (tonnes U3O8)
Sales – Other Concentrates
(tonnes U3O8)
Sales – Total (tonnes U3O8)
Note 1 Restated to comply with IFRS
Note 2 Post rights issue
1.27
(3.00)
-
2.07
594
(374.5)
3.8
2.6
0.17
86.2
1.23
(2.54)
-
2.49
567
(270.9)
1.2
1.6
0.18
87.9
11.13
45.24
2.96
4.99
523
89.87
1.4
2.4
0.19
87.2
23.89
16.72
1.42
5.07
521
523.17
2.2
2.3
0.26
88.3
19.00
16.34
1.47
3.98
519
427.33
3.5
2.0
0.30
88.2
19.50
48.88
1.03
3.20
419
181.6
2.9
1.9
0.31
88.2
20.80
90.98
0.82
2.90
385
113.3
3.3
2.0
0.26
87.5
10.02
47.70
1.70
2.80
354
116.0
2.2
2.3
0.29
88.3
6.59
34.7
2.58
2.67
273
143.7
0.8
2.1
0.28
88.8
3.40
30.9
3.24
3.22
238
83.5
1.8
2.1
0.28
88.3
3,710
2,641
3,793
5,240
5,339
5,412
4,748
5,910
5,137
5,065
2,665
3,258
4,373
5,497
5,272
5,324
5,760
5,552
5,024
5,241
558
3,223
1,908
5,167
653
5,026
-
5,497
-
5,272
-
5,324
-
5,760
136
5,688
581
5,605
18
5,259
Definition of statistical ratios
Current Ratio
Liquid Ratio
Gearing Ratio
Interest Cover
= current assets/current liabilities
= (current assets-inventory-prepayments-foreign exchange hedge asset on borrowings)/(current liabilities-bank overdraft – foreign
exchange hedge liability)
= (long term debt + term creditors)/(shareholders’ equity + long term debt + term creditors)
= earnings before interest and tax/interest expense
Return on Shareholders’ Equity
= profit after tax/average shareholders’ equity
Earnings per Share
= profit after tax/weighted average number of shares issued
Dividends per Share
= dividends paid/number of shares issued
Payout Ratio
= dividends paid/profit after tax
Price-Earnings Ratio
= price/earnings per share
Dividend Yield
= dividend per share/share price
Net Tangible Assets per Share
= net assets/number of shares issued
122
Energy Resources of Australia Ltd | Financial Report 2012
12
15
33
12
35
21
17
17
23
49
13
36
40, 89
119
28
13
122
34
36
32
34
Index
2012 Announcements
121
Operations
2012 in Review
2013 Objectives
Auditor’s Independence Declaration
Biodiversity
Brine Concentrator
Business Review
Chairman & Chief Executive’s Report
Community
Company Profile
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Equity
Consolidated Statement of Comprehensive Income
Corporate Governance Statement
Directors’ Outlook
Directors’ Declaration
Directors’ Report
Dividends
Earnings & Revenue
Education Partnership
Employment
Energy & Greenhouse Gas Emissions
Environment
Financial Performance
Future Supply
Health & Safety
Independent Auditor’s Report
Indigenous Employment
Integrated Tailings, Water & Closure Study
Jabiru Airport
Jabiru Housing
Magela Land Application
Major Projects
Markets & Customers
Mining Agreement
Mirarr Traditional Owners
Notes to Consolidated Financial Statements
4, 29
Ore Reserves & Mineral Resources
Pit 1 Closure
Pit 3 Completed
Product Stewardship
Radiation Monitoring
Ranger 3 Deeps Exploration Decline
Ranger 3 Deeps Underground Mine Prefeasibility
Study
Regulatory Framework
Remuneration Report
Retention Pond 6
Risk Management
Royalty Payments
Shareholder Information
Sustainable Development Overview
Tailings & Storage Facility Wall Lift
Ten Year Performance
Trial Landform
Waste Management
Water Management & Monitoring
Weed Management
7
70
35
18
11
8
40
3
77
79
78
76
71
25
116
44
10
10, 88
39
37
35
32
10
14
19
117
37
33
13
13
34
17
24
40
40
80
Energy Resources of Australia Ltd | Financial Report 2012
123
Glossary
AIFR
ANRDR
APA
ARRAC
ARRTC
AUA
ASX
BDP
EBIT
EPBC Act
CCMP
CO2
CWA
EBIT
FIFO
GJ
GL
GST
hrs
IAEA
ICRP
All Injury Frequency Rate
Australian National Radiation Dose Register
Australian Post-Graduate Awards
Alligator Rivers Regional Advisory Committee
Alligator Rivers Region Technical Committee
Australian Uranium Association
Australian Securities Exchange
Rio Tinto Bonus Deferral Plan
Earnings Before Interest and Tax
Environmental Protection & Biodiversity Act
Critical Control Monitoring Plan
Carbon Dioxide (greenhouse gas emission)
Compressed Working Arrangement
Earnings Before Interest and Tax
Fly-in, Fly-out
Gigajoule
Gigalitre (1 billion litres)
Goods & Services Tax
Hours
United Nations International Atomic Energy Association
International Commission on Radiological Protection
ISO14001
International Organisation for Standardisation – Environmental Management System Certification
km
LCA
LTIFR
Mm
MOL
MSP
mSv
MTD
NLC
NTCE
Pit 1
Pit 3
PSP
SOP
SSD
SSP
TSF
TSR
U3O8
WAC
WNA
Kilometre
Life Cycle Assessment
Lost Time Injury Frequency Rate
Millimetre
Maximum Operating Level
Rio Tinto Management Share Plan
Millisievert
Minesite Technical Committee
Northern Land Council
Northern Territory Certificate of Education
Pit in preparation for rehabilitation
Pit in preparation for rehabilitation
Rio Tinto Performance Share Plan
Rio Tinto Share Option Plan
Australian Government’s Supervising Scientist Division
Rio Tinto Share Savings Plan
Tailings Storage Facility
Rio Tinto Total Shareholder Return
Uranium Oxide
West Arnhem College
World Nuclear Association
124
Energy Resources of Australia Ltd | Financial Report 2012
Corporate Directory
Head Office
Level 10, TIO Centre
24 Mitchell Street
GPO Box 2394
Darwin NT 0801
Tel: +61 (0) 8 8924 3500
Fax: +61 (0) 8 8924 3555
www.energyres.com.au
Ranger Mine
Locked Bag 1
Jabiru NT 0886
Registered Office
Energy Resources of Australia Ltd
c/ Mallesons Stephen Jacques
Level 5, NICTA Building B
7 London Circuit
Canberra City ACT 2601
Photography acknowledgements
Cover, page 3: InFocus Photography
Page 32: Steve Strike
Remainder: Alan Johnson
Energy Resources of Australia Ltd | Financial Report 2012
125
www.energyres.com.au
This report is printed with the environment in mind.