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ANNUAL
REPORT
2013
2013
REviEw
Brine Concentrator
constructed on
schedule and on
budget
Ranger 3 Deeps
exploration decline
project on schedule
and on budget
Ahead of schedule
on the rehabilitation
of Pit 3, with 22.8
million tonnes
already backfilled
Refer to page 34 for further detail
Refer to page 15 for further detail
Refer to page 13 for further detail
Signing of the
Ranger Mining
Agreement and
establishment of
the Kakadu West
Arnhem Social Trust
$52 million in
additional cost savings
in 2013 as part of ERA’s
ongoing Business
Review and $357
million in cash on hand
Refer to page 44 for further detail
Refer to pages 9 and 10 for further detail
Produced 2,960 and
sold 2,815 tonnes of
uranium oxide
Refer to page 9 and 12 for further detail
Surrounding
environment
remains protected,
as confirmed by
the Supervising
Scientist Division
Processing
operations impacted
by failure of Leach
Tank 1, release of
slurry mixture fully
contained on site
91 female employees
(18 per cent of total
workforce) and 79
Indigenous employees
(16 per cent of total
workforce)
Refer to page 33 for further detail
Refer to page 12 for further detail
Refer to page 41 for further detail
ERA Manager
Mining awarded
Australian Mine
Manager of
the Year
Refer to page 13 for further detail
A new record of 188
injury free days
reached
Refer to page 23 for further detail
Net loss after tax –
$136 million
Refer to page 9 for further detail
Front cover: Ranger 3 Deeps exploration decline
Construction Manager Chris Hattingh in front of
an exploration drill rig. The contract for Phase
1 development of the decline was awarded to
McMahon Holdings Ltd. The project is on schedule
and on budget.
SALES REVENUE
($M)
768.3
651.4
572.3
369.6
356.1
DRUMMED PRODUCTION
TONNES (t)
5,240
3,973
3,710
2,960
2,641
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
NET PROFIT AFTER TAX
($M)
INDIGENOUS EMPLOYEES
PER CENT OF WORKFORCE
272.6
47.0
2009
2010
2011
2012
2013
-153.6
-218.8
-135.8
OPERATING CASH FLOW
($M)
248.8
42.1
54.9
98
99
103
81
79
2009
2010
2011
2012
2013
ALL INJURY FREQUENCY RATE
(PER 200,000 HRS WORKED)
0.73
0.68
0.57
0.52
0.91
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
-3.3
-17.9
1
Energy Resources of Australia Ltd Annual Report 2013 Contents
AnnuAl RepoRt
2013 Review
Company profile
Vision
Acknowledgement
Chairman’s report
Chief Executive’s report
2014 Objectives
Operating and financial review
Financial performance
Operations
Business strategy
Future supply
Markets and customers
Health and safety
Radiation monitoring
Regulatory framework
IFC
3
3
3
4
6
8
9
9
12
15
18
22
23
25
28
SuStAinAble Development
RepoRt
30
Sustainable development
Environment
Land
Employment
Community
FinAnciAl RepoRt
32
33
37
41
44
48
2
Energy Resources of Australia Ltd Annual Report 2013
Company Profile
energy Resources of Australia ltd (eRA) operates Ranger mine and is Australia’s longest
continually operating uranium producer.
uranium has been mined at Ranger for more than three decades and eRA has an
excellent track record of reliably supplying customers. Ranger is one of only three mines
in the world to have produced in excess of 110,000 tonnes of uranium oxide (u3o8).
Following the completion of mining operations in pit 3 in 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.
Located eight kilometres east of Jabiru and
260 kilometres east of Darwin, in Australia’s
Northern Territory, Ranger mine lies within the
79 square kilometre Ranger Project Area. In
addition, ERA holds the world-class Jabiluka
mineral lease. In accordance with the Jabiluka
Long Term Care and Maintenance Agreement,
Jabiluka will not be developed by ERA without
the approval of the Mirarr Traditional Owners.
The Ranger Project Area and the Jabiluka
mineral lease are located on Aboriginal land and
are surrounded by, but separate from, the World
Heritage listed Kakadu National Park.
ERA’s uranium mining activities are regulated
through Commonwealth and Northern Territory
legislation. Additional operating agreements
have been entered into by the Northern Land
Council on behalf of the Traditional Owners
under the Commonwealth Aboriginal Land
Rights (Northern Territory) Act 1976. Further
agreements covering the Ranger Project
Area were reached in January 2013 by the
Gundjeihmi Aboriginal Corporation, on behalf
of the Mirarr Traditional Owners, the Northern
Land Council, ERA and the Commonwealth
Government.
The Company’s shares are publicly held and
traded on the Australian Securities Exchange,
with Rio Tinto, a diversified resources group,
holding 68.4 per cent of ERA shares.
Vision
To maintain ERA’s 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 its 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 people, 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.
Process Operator Robert Thomas
3
Energy Resources of Australia Ltd Annual Report 2013 Chairman’s Report
While eRA achieved
efficient operations,
robust cash generation and
good momentum for the
development of the Ranger
3 Deeps resource in 2014,
a serious process plant
failure at Ranger marred an
otherwise strong year.
Peter McMahon, Chairman
In December, Leach Tank No. 1 at
Ranger failed, causing the release
of a slurry mixture of natural ore
and acid into a designed on-site
catchment system which successfully
contained the material. No material
escaped into Kakadu National Park.
There were no injuries to employees
or contractors.
The Company suspended processing
operations immediately after the
incident to assess why the tank failed
and the nature of required repairs,
and to identify the steps necessary to
ensure nothing like it occurs again.
A formal regulatory enquiry was
announced by both Northern Territory
and Commonwealth Governments,
and the Company has been co-
operating with all of these processes.
When the incident took place some
community stakeholders were
alarmed, and voiced public concerns
about the Company’s standards
and operating record. As soon as
possible, the Company opened the
site for inspection by community
representatives and regulators.
The radioactivity of the ore
concentrate is low and well within
levels that are not harmful to
humans. Nonetheless, the incident
re-awakened latent opposition
to uranium mining at Ranger,
and it has at least interrupted the
developing trust between ERA
and its community stakeholders,
including representatives of the Mirarr
people, the traditional owners of the
Ranger site.
ERA is correctly subject to detailed
scrutiny at Ranger. While this
incident triggered strong concerns,
the Company worked quickly and
transparently to demonstrate that
there were no external impacts and
that the containment systems worked
as designed.
While the Board is satisfied that the
slurry was successfully contained, the
Board will do all in its power to ensure
that the cause of the tank failure is
carefully identified and fully rectified.
At present, the Company is working
with Government regulators towards
agreeing a path to resume production
during 2014. In the meantime, ERA’s
sales commitments are being met
through existing inventory.
More generally, short term market
conditions remain subdued and
subject to political trends. The
resumption of nuclear power
generation in Japan has been slower
than hoped, while production from
Kazakhstan remains high for a low
demand global market. On the other
hand, the ongoing low spot price for
uranium has rendered many potential
mining operations uneconomic and is
forcing the suspension and closure of
some existing operations.
Despite the generally poor demand
side conditions, ERA remains positive
about the expected strengthening
of the global uranium market in the
medium term.
4
Energy Resources of Australia Ltd Annual Report 2013
Chairman’s Report (continued)
The Company believes it can
regain community and stakeholder
confidence following the tank failure
and it intends to do all it can to do so.
The Company’s objective is to fully
recover momentum as it prepares
for its future as an underground
miner with a significantly smaller
environmental footprint, contributing
valuably to the global energy market
and the local economy.
Peter McMahon
Chairman
The unique role of nuclear energy
as a low emissions source of energy
and an essential part of the global
energy mix remains clear. China’s
nuclear reactor construction program
continues as the driving force in long
term demand growth. An estimated
40 to 50 new nuclear plants are
planned for construction this decade.
In addition, new reactor construction
continues in South Korea, USA,
United Arab Emirates, France,
Russia, Finland, India, Turkey and the
United Kingdom.
ERA believes that the nuclear cycle
will turn for the Company, driven by
market fundamentals which in turn
rest upon the high reliability on, and
low emissions of, nuclear power.
The Company’s focus on the Ranger
3 Deeps project stems from its
conviction that the medium term
global market for uranium will favour
those ready to take advantage when
it does turn. The Ranger 3 Deeps
mineral resource is recognised
as a significant resource by world
standards. This year the project
exploration decline – designed to
enable close spaced underground
drilling to further evaluate the
resource – progressed on schedule
and on budget. Initial results from
drilling in the decline during the year
have confirmed the current geological
model.
Ranger 3 Deeps is a key part of
the general momentum of the
Company intended to place it in
a strong position for the forecast
medium term recovery of the uranium
market. Completion of open pit
mining has been achieved, and with
it the Company is demonstrating its
capacity and resolve to rehabilitate
the mine site. Significant progress in
water management and treatment
has been achieved with the
construction and official opening of
the Brine Concentrator in September.
Strong and sustained cash earnings
have flowed from operations.
5
Energy Resources of Australia Ltd Annual Report 2013
Chief Executive’s Report
eRA has set strong
objectives towards safety,
water management,
rehabilitation, cost control,
strengthening relations
with key stakeholders,
delivery of major strategic
projects, and on developing
the world-class Ranger 3
Deeps resource base.
in the face of challenging
market conditions, eRA
worked towards delivery on
these commitments during
2013 and will continue to do
so going forward.
Andrea Sutton, Chief Executive
In line with projected performance,
ERA produced 2,960 tonnes of
uranium oxide, generating sales
revenue of $356 million. Although
ERA reported a net loss after tax
of $136 million, cash costs and
capital expenditure were lower due
to our ongoing focus on reducing
consumable and corporate costs and
following the completion of the Brine
Concentrator in September 2013.
The business continues to be
restructured to reflect our new
reality as a smaller operator, and an
ongoing regime of cost reduction is
being implemented to strengthen the
business’ position.
Our Business Review Programme,
which started in 2011, delivered
savings of $52 million in 2013 and is
on track to achieve its target of $150
million in cumulative savings by the
end of 2014.
ERA experienced a significant event
on 7 December 2013 with the failure
of Leach Tank 1. No employees
were injured and the surrounding
environment remained protected
during the event and in the clean-up
period that followed.
ERA voluntarily suspended
processing operations immediately
after the tank failed.
As at the date of this report, ERA
was in the process of assessing
the full impact of the event on
operations, including:
•
•
the duration of time for which
processing operations will remain
closed;
the nature and extent of repair
works required at the process
plant; and
•
the impact on production for 2014.
The health and safety of our people
and the community at large, and the
protection of the environment remain
paramount. This along with continued
engagement and dialogue with
stakeholders is critical as we recover
from this event.
ERA’s safety performance in 2013,
while still strong, did not maintain the
high standard established in 2012.
Whilst the Company achieved a new
record of 188 injury free days, the
All Injury Frequency Rate (AIFR)
was 0.91. There were four Lost Time
Injuries and three Medical Treatment
Cases.
The $120 million Ranger 3 Deeps
exploration decline project, designed
to allow underground close spaced
drilling to take place to further define
and evaluate the Ranger 3 Deeps
resource, reached 1,694 metres
from the surface at 31 December
2013. The project is progressing on
schedule and to budget.
The Ranger 3 Deeps mineral
resource is currently estimated to
contain more than 33,000 tonnes
of uranium oxide and is recognised
as a significant resource by world
standards.
Underground exploration drilling in
the decline began in May 2013. Initial
6
Energy Resources of Australia Ltd Annual Report 2013 Chief Executive’s Report (continued)
drilling results confirm the current
geological model and structural
interpretation. The Prefeasibility
Study will finish in Quarter 4 2014,
and the results will be used to
assess the viability of a potential
underground mine.
In parallel, ERA is developing a $57
million Prefeasibility Study for an
underground mining operation to
develop the Ranger 3 Deeps mineral
deposit. In January 2013, ERA
formally commenced the statutory
approval process for the proposed
Ranger 3 Deeps underground mine.
During 2013 ERA’s ability to safely
treat and manage water inventories
was transformed with the successful
construction of the $220 million Brine
Concentrator project. This project was
executed in collaboration with HPD, a
subsidiary of Veolia Water Solutions
and Technologies and Hatch Pty
Ltd who was the Engineering,
Procurement and Construction
Management contractor, and was
completed on time and to budget.
Officially completed and opened
on 19 September 2013, the Brine
Concentrator uses internationally
proven technology to treat industrial
process waters to extremely high
standards through a process of
heating and evaporative cooling.
With the capacity to produce 1.83
billion litres of clean distilled water
each year, the Brine Concentrator
will be used to manage and reduce
ERA’s process water inventories,
and will play an integral part in future
progressive rehabilitation activities
at Ranger.
ERA’s surface water management
practices at Ranger mine were
found to be of best practice in 2013,
with the release of the findings and
recommendations of the Independent
Surface Water Working Group in
March. Undertaken in partnership
with the Gundjeihmi Aboriginal
Corporation, representing the Mirarr
Traditional Owners, the outcome
of the report delivered a watershed
agreement between both parties.
Progressive rehabilitation describes
the way in which we manage
our responsibilities to restore the
environment through an ongoing
process, and work in this space was
accelerated during 2013.
The initial backfill of Pit 3 continues
to advance ahead of schedule. At 31
December 2013 a total of 22.8 million
tonnes of waste material had been
moved in to Pit 3 out of a planned
total of 30 million tonnes
of material.
In addition, we also progressed with
the initial rehabilitation of Pit 1.
Dewatering wicks were installed and
the first part of a rock layer that is
designed to compress the tailings
mass to activate the wicks was laid.
This will enable the consolidation of
tailings and the eventual final capping
for closure.
We also worked closely with
the Mirarr Traditional Owners to
rehabilitate the Jabiluka mineral
lease. This project included the
removal of a retention pond
followed by landform establishment
and revegetation activities that
engaged local Indigenous business
Kakadu Native Plants and local
Indigenous workers.
In January 2013 a suite of
agreements covering the Ranger
Project Area was executed by ERA,
the Mirarr Traditional Owners, the
Northern Land Council, and the
Commonwealth Government. It
is particularly important that the
Mirarr Traditional Owners are fully
informed and have a say about any
future mining on their land, and
these agreements help to ensure
those outcomes, especially through
the establishment of a Relationship
Committee.
These agreements also deliver to
Traditional Owners an increased
share of financial benefits from
mining, an agreed approach
to increasing opportunities for
local Aboriginal participation in
business development, training and
employment, and support for regional
socio-economic initiatives.
A specific example of this
engagement is the establishment
of the Kakadu West Arnhem Social
Trust, which administers funding for
cultural, educational and other social
programmes in the region. In 2013
the Trust provided funding to the
Children’s Ground programme which
is designed to improve the lives of
children and families across the West
Arnhem Region.
ERA continued to have a strong
presence in the community, and
2013 also marked the fourth full year
of operation for the award winning
Education Partnership between ERA
and the West Arnhem College.
Our achievements in 2013 are largely
due to the strength of our people.
Although our transition from open cut
mining to stockpile ore processing
with an exploration and development
focus has necessarily required a
smaller operation, we retain and
continue to develop an experienced
and talented workforce.
Where we have had to reduce staff
numbers, we successfully found
opportunities for the majority
through redeployment within the
Rio Tinto business or in the wider
resource industry.
I would like to recognise the
professional commitment and effort
of our people through this transition
period, and I look forward to working
with this team together with all of our
stakeholders to meet the challenges
of 2014.
Andrea Sutton
Chief Executive
7
Energy Resources of Australia Ltd Annual Report 2013 2014 Objectives
The Company’s objective is to fully recover momentum as it prepares for its future as an underground miner with a
significantly smaller environmental footprint, contributing valuably to the global energy market and local economy and
enhancing shareholder value.
AReA
obJectiveS
HeAltH,
SAFety AnD
enviRonment
Continue to work towards the goal of zero harm
• Focus on strong safety leadership with extensive employee and contractor engagement
• Implement Critical Control Management Plans and robust change management to proactively manage
ERA’s health, safety and environmental risks
• Continue to protect the surrounding environment and ensure ERA’s operations do not impact on the
values of the world heritage listed Kakadu National Park
• Implement the recommendations of the Independent Surface Water Working Group
opeRAtionS
Economically produce uranium from stockpiled ore while integrating rehabilitation activities
• Maximise production of uranium oxide following the recommencement of processing operations.
• Embed Brine Concentrator operations to enable a production rate of 1.8GL of clean water per annum
communitieS
AnD
GoveRnment
Develop a shared understanding and strengthen relationships with key stakeholders in the region
• Maintain effective dialogue and information sharing with the Gundjeihmi Aboriginal Corporation on behalf
of the Mirarr Traditional Owners
• Engage with governments, government agencies and other key stakeholders to ensure timely outcomes
on development projects
people
• Continue to develop a long term vision for Jabiru with Traditional Owners, governments and stakeholders
• Ongoing implementation of the objectives of the Ranger Mining Agreement, including business
development, training and land management
Foster a diverse, committed and capable workforce
• Manage opportunities for employees in the transition to a potential underground mining operation
• Continue to grow the diversity of ERA employment with a target of 20 per cent Indigenous and 20 per
cent female employees
• Continue to support and develop ERA’s leaders through leadership programmes and individual
development plans
• Continue to use flexible people management strategies to ensure a committed and capable workforce
• Continue to grow our regional training and development plan
RAnGeR 3 DeepS Identify the optimal development option for Ranger 3 Deeps
• Complete the Ranger 3 Deeps exploration decline, exploration and evaluation drilling
• Complete the Ranger 3 Deeps Prefeasibility Study
ReHAbilitAtion Continue progressive rehabilitation of the Ranger Project Area
• Completion of Pit 1 initial capping to inform and finalise the overall rehabilitation strategy
• Complete initial 30 million tonne waste rock backfill of Pit 3 and progress approvals for tailings storage
and brine management
• Progress definition of closure criteria through the closure criteria working group
AppRovAlS
Progress all necessary approvals for the potential development of Ranger 3 Deeps in 2015
• Conduct public consultation and submit all required Environment Impact Statement documentation
including Social Impact Assessment
• Continue to engage and work collaboratively with the Gundjeihmi Aboriginal Corporation and other key
stakeholders on potential underground mining
FinAnciAl
Ensure that ERA has sufficient cash to support its long term strategy and provide a sustainable
shareholder return
• 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 /
GRoWtH
Evaluate the exploration potential of the Ranger Project Area
• Progress surface exploration programme on prospective areas on the Ranger Project Area
8
Energy Resources of Australia Ltd Annual Report 2013 Operating and Financial Review
Financial
performance
eARninGS
For the year ended 31 December
2013, ERA’s net loss after tax
was $136 million, (2012: $219
million). Earnings before interest,
tax, depreciation and amortisation
(EBITDA) was $32 million including
a non-cash finished goods inventory
write-down to net realisable value of
$21 million (2012: negative EBITDA
of $35 million, inclusive of a $68
million non-cash impairment charge).
Revenue
Revenue from the sale of uranium
oxide in 2013 was $356 million (2012:
$395 million). Sales of uranium
oxide were 2,815 tonnes (2012:
3,223 tonnes) (see Operations,
page 12, for details of production).
The average realised sale price of
uranium oxide achieved by ERA in
2013 was US$53.92 per pound (2012:
US$58.33).
ERA’s sales strategy focuses on
ensuring a reliable long term supply
of uranium oxide to customers, with
pricing focussed on the long term price
rather than the spot price. In 2013,
both the spot and long term uranium
oxide indicators declined significantly,
adversely affecting ERA’s average
realised sales price.
Sales of uranium oxide are
denominated in US dollars. In 2013,
the weakening of the Australian dollar
had a favourable impact on ERA’s
financial results.
Brine Concentrator Construction Manager Ben Fullerton.
The Brine Concentrator was completed on schedule on 19 September 2013.
coStS
DiviDenDS
Total cash costs were significantly
lower than 2012 largely due to
savings on consumable costs,
corporate costs, employee benefits
and mining operations focussing on
rehabilitation activities. Mining costs
related to rehabilitation activities are
allocated to the rehabilitation provision
on the balance sheet and not the
statement of comprehensive income.
This partially explains the significant
reductions, when compared to 2012, in
employee benefits, raw materials and
consumables.
Further savings have been
accomplished through reduced
employee and contractor numbers,
a strong focus on raw material and
consumable optimisation, and the
rationalisation of corporate and
overhead costs.
Partially offsetting savings in contractor
costs is the increased spend on the
Ranger 3 Deeps exploration decline
and Prefeasibility Study.
Non-cash costs associated with
depreciation have decreased during
the year. This is the result of a lower
asset cost base in 2013 combined with
reduced production levels.
Capital expenditure decreased in 2013
to $91 million (2012: $161 million).
The majority of expenditure was
related to the construction of the Brine
Concentrator, which was officially
opened in September 2013.
ERA Directors have determined that a
dividend for 2013 will not be paid. No
dividend was paid in 2012.
FinAnciAl poSition
Net assets have decreased during
the year by approximately $136
million. Impacting this was a decrease
in property, plant and equipment
due to significant depreciation,
partially offset by capital expenditure
(see Brine Concentrator, page 34).
Total liabilities have decreased
primarily due to a draw down in
the rehabilitation provision. ERA
maintains approximately $357 million
of cash on hand.
ReHAbilitAtion
pRoviSion
In 2013, ERA completed the
Integrated Tailings, Water and
Closure Study, which identifies the
optimal rehabilitation plan for the
Ranger Project Area.
This study has confirmed the timing
and technology necessary to deliver
the rehabilitation plan in line with the
current Ranger Section 41 Authority.
The provision for rehabilitation
represents the net present cost for
rehabilitation as at 31 December
2013 and stands at $603 million.
9
Energy Resources of Australia Ltd Annual Report 2013
Operating and Financial Review (continued)
The Brine Concentrator was constructed on schedule and has the capacity to produce up to 1.83GL of distillate per year.
non-cASH FiniSHeD
GooDS inventoRy net
ReAliSAble vAlue
ADJuStment
At 31 December 2013, a $21 million
(pre-tax) adjustment was made to
finished goods inventory to record
it at its net realisable value. This
was due to high non-cash costs
and low December 2013 half year
production, which drove the total unit
cost of inventory above the expected
sales price. The net realisable value
adjustment has been included in
‘Changes in Inventories’ in the
statement of comprehensive income.
buSineSS RevieW
In 2011, ERA conducted a
comprehensive Business Review
of operations and strategy to focus
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 the end of 2014.
During 2013, the Business Review
achieved cost savings of $52 million,
$12 million higher than planned,
taking the total cumulative cost
savings to $127 million to date.
Savings were achieved through
merging management roles,
reduction in the use of contractors,
reduction in support and services
roles, improvement in procurement
and maintenance practices and
rationalisation of corporate costs.
10
Energy Resources of Australia Ltd Annual Report 2013 The $120 million Ranger 3 Deeps exploration decline
reached 1,694 metres from surface on 31 December 2013,
ahead of schedule.
Northern Territory Chief Minister Adam Giles
(centre) visited Ranger’s exploration decline
after officially opening the Brine Concentrator on
19 September 2013. Shown here with Ranger
3 Deeps exploration decline Construction
Manager Chris Hattingh (left) and Northern
Territory Minister for Mines and Energy Willem
Westra van Holthe (right).
11
Energy Resources of Australia Ltd Annual Report 2013 Operating and Financial Review (continued)
Operations
2013 has seen strong progress
on operational and rehabilitation
activities, including a focus on
reduction in water inventories.
ERA produced 2,960 tonnes of
uranium oxide in 2013, 20 per cent
less than in the previous year (2012:
3,710 tonnes).
Strong plant utilisation rates helped
to offset the lower production
associated with processing lower
grade stockpiles in the second half of
the year.
plAnt peRFoRmAnce
During 2013 ERA maintained the high
levels of plant performance that have
been achieved in recent years. Both
the main mills and the laterite mill
performed well, achieving a combined
throughput among the top five years
of production.
Ore treated during the year was
2.3 million tonnes (2012: 2.6 million
tonnes), the third highest on record.
In 2012, 2.6 million tonnes was
a record, exceeding the previous
highest throughput record of 2.4
million tonnes set in 2010.
Maintenance strategies ranged
from preventative, with frequency
based inspections, to condition
based assessment which includes
oil analysis, wear-rate analysis and
vibration analysis. This fit-for-purpose
approach is designed to provide
optimal reliability and availability in a
cost effective way.
The mills were fed with material
remaining from the completion of Pit 3
in 2012 and stockpiled ore. Average
mill head grade was 0.15 per cent
(2012: 0.17). The majority of high
grade ore mined prior to completion
of mining in Pit 3 was processed
during the first half of 2013, with
lower grade stockpiled ore fed
subsequently.
Milling rates of 288 tonnes per hour
(tph) were slightly down on the
previous year (2012: 295 tph) due
to different ore characteristics. The
lower grade also affected extraction
and recovery rates.
On 7 December 2013, ERA
voluntarily suspended processing
operations following the failure of
Leach Tank 1. Processing operations
were not resumed for the remainder
of 2013.
No employees were injured and the
surrounding environment remained
protected during the event and in the
clean-up period that followed.
Ranger mine’s containment
management systems fully captured
the slurry material from the failed
leach tank. These containment
systems are in place to safeguard
Kakadu National Park in the event
of plant or equipment failure. The
systems operated as designed during
the event.
A taskforce consisting of the
Northern Territory Department of
Mines and Energy, Northern Territory
WorkSafe, the Supervising Scientist,
the Commonwealth Department of
Industry, the Gundjeihmi Aboriginal
The Brine Concentrator pumping station pumps
water from the Tailings Storage Facility to the
Brine Concentrator for processing into distillate.
Corporation and the Northern Land
Council was formed to provide a
coordinated and consistent approach
to managing the regulatory response
to this event.
ERA commissioned its own
investigation to run in parallel with the
regulatory response.
pRoGReSSive
ReHAbilitAtion
With the completion of open cut
mining and the construction of the
Brine Concentrator, ERA’s progressive
rehabilitation plans have progressed
significantly in 2013, focussing on Pit 1
and Pit 3, as well as tailings and
brine management and the Jabiluka
Interim Water Management Pond (see
Environment, page 35).
Civil construction activities associated
with both these projects are being
managed as part of ERA’s ongoing
operations.
Final rehabilitation and revegetation
activities will draw from the research
findings of ERA’s full-scale trial
landform project (see Land, page 37),
which has identified effective strategies
for surface landform design, erosion
control and revegetation techniques for
plant species.
pit 3 bAckFillinG
opeRAtion
Pit 3 is being backfilled with 30
million tonnes of waste material in
12
Energy Resources of Australia Ltd Annual Report 2013 Mine Manager of the Year
Mike Stone, Mining Operations Manager.
ERA Mining Operations Manager Mike Stone was awarded Mine
Manager of the Year at the Australian Mining Prospect Awards in October
following the successful completion of open cut mining at Ranger mine.
Mr Stone was recognised for managing the completion of mining in
Ranger mine’s Pit 3 in challenging conditions, while maintaining a focus
on safety and productivity.
Extreme rainfall during the Northern Territory wet season, steep pit walls
and a fixed deadline of 31 December 2012 for completion of mining in Pit 3,
required ERA’s mining operations and water management teams to
develop new processes and schedules.
An innovative strategy to mine at the waterline while Pit 3 was dewatered
allowed ERA to complete open cut mining in November 2012, five weeks
ahead of schedule, with zero lost time and reportable injuries for the year.
Mr Stone said the project’s success has been due to the efforts of
both ERA’s mining operations and water management teams. “Any
recognition of ERA’s mining operations achievements really belongs to
the many talented men and women working in mining operations and
water management,” Mr Stone said.
preparation for the planned transfer
of tailings from the Tailings Storage
Facility and the storage of the brines
from the Brine Concentrator.
The backfilling project is ahead of
schedule, with 22.8 million tonnes
of waste material placed in Pit 3
at 31 December 2013. Once the
partial backfill is complete, tailings
will be transferred to Pit 3 ahead
of the eventual rock capping. Final
rehabilitation is to be completed
by 2026.
The initial placement of Pit 3 underfill
is expected to be completed in 2014,
with tailings deposition scheduled to
start in 2015.
pit 1 DeWAteRinG
pRoJect
The dewatering of Pit 1 continued
in 2013 with a project beginning in
September to place layers of waste
rock over the tailings mass.
This rock pre-load is designed to
activate a series of vertical wick
drains that had previously been
installed to drain the area. The layer
of pre-load rock will compress the
tailings forcing the water in Pit 1 to
travel to the surface via the wicks.
It is then collected and pumped to the
Tailings Storage Facility.
As at 31 December 2013,
approximately 70 per cent of the pre-
load had been placed. The remainder
of the pre-load will be placed in 2014.
13
Energy Resources of Australia Ltd Annual Report 2013 Operating and Financial Review (continued)
WAteR mAnAGement
In addition to the completion of
the Brine Concentrator (see Brine
Concentrator, page 34), ERA also
completed a number of other water
management initiatives in 2013.
Final commissioning of a
contingency pumping system
linking the Tailings Storage Facility
with Pit 3 was completed early in
2013. In conjunction with existing
infrastructure, this system will provide
ERA with a total capacity to transfer
200 megalitres per day of process
water from the Tailings Storage
Facility to Pit 3.
In addition, Retention Pond 6, which
has a capacity of one gigalitre, was
successfully commissioned in March
2013. The new pond increases
ERA’s ability to manage pond water
inventories, and connects to the
existing Retention Pond 2 via a two-
way pumping system.
Pond water is surface run-off water
that has come into contact with
mineralised materials such as low
grade ore stockpiles 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 findings and recommendations
of the Independent Surface Water
Working Group on surface water
management at Ranger mine were
released in March. The main findings
were that the current surface water
management and regulatory systems
are of a very high standard.
JAbiRu AiRpoRt
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.
In 2013, significant improvements
were made to existing infrastructure
14
ERA General Manager of Operations, Tim Eckersley.
at the Jabiru Airport in order to
provide more services to users and to
increase accessibility. This included
improvements to security, access,
fencing, parking, lighting, airstrip
markings and passenger facilities.
In December 2013, ERA was granted
Aerodrome Certification of the Jabiru
Airport by the Civil Aviation Safety
Authority. This will allow larger
aircraft capable of carrying over
30 passengers to make use of the
facility, providing more access and a
wider service.
JAbiRu HouSinG
During 2013 ERA continued
discussions with the Gundjeihmi
Aboriginal Corporation relating to
the proposed handover of houses.
These houses previously were used
to accommodate Ranger employees.
ERA currently manages 275 houses
in Jabiru.
Energy Resources of Australia Ltd Annual Report 2013 Business Strategy
ERA’s vision is to be a world class
uranium supplier that contributes
to environmental sustainability and
is trusted by Traditional Owners,
the community and its people. ERA
considers that the implementation of
this vision will maximise shareholder
value and benefit its stakeholders.
A key strategic component in
achieving these goals is the
transformation from an open cut
mining operation to a potential low
impact underground mining operation,
through underground exploration of
Ranger 3 Deeps.
Should the Ranger 3 Deeps
mineral resource be approved and
successfully commissioned as an
operating mine, the timing is likely to
coincide with strengthening demand
and higher market prices for uranium
oxide. This will allow ERA to continue
to provide a reliable and competitive
uranium supply to the world’s nuclear
utilities.
ERA’s operations are located on
Aboriginal land and are surrounded
by, but separate from, the World
Heritage listed Kakadu National
Park. Caring for the surrounding
environment and respecting the
culture and aspirations of Indigenous
people in our community, particularly
the Mirarr Traditional Owners, is
core to ERA’s overall strategy. ERA
has made, and will continue to
make, substantial investments in
water management infrastructure
and progressive rehabilitation of
the Ranger Project Area with these
objectives in mind.
In addition to Ranger 3 Deeps,
Jabiluka remains one of ERA’s key
assets. ERA has entered into a
Long Term Care and Maintenance
Agreement with the Mirarr Traditional
Owners in relation to Jabiluka. Future
mining developments at Jabiluka will
not occur without the consent of the
Mirarr Traditional Owners.
RAnGeR 3 DeepS
exploRAtion Decline
ERA’s Ranger 3 Deeps exploration
decline project made significant
progress in 2013.
Overall, the project consists of two
phases of development and an
underground drilling programme:
Phase 1 development:
• 1,900 metres of tunnel
development, plus a 185 metre
entrance portal;
• Contract awarded to McMahon
Holdings Ltd and on schedule for
completion in mid-2014.
Phase 2 development:
• An extension to the decline
that will take the total length to
approximately 3,000 metres and
allow the acquisition of a large
sample for metallurgical tests;
• Approved by the ERA Minesite
Technical Committee, scheduled
for completion in October 2014.
Drilling programme:
• Total of 52,000 metres of
exploration drilling.
• Drilling will continue throughout
2014.
Construction of the Ranger 3 Deeps exploration
decline allows close-spaced exploration drilling,
shown here, to take place.
Phase 1 of the decline development
has progressed well and is on
schedule. An initial boxcut and portal
access tunnel was completed in
October 2012, and excavation of
the decline commenced in
November 2012.
As at 31 December 2013, the tunnel
face had reached 1,694 metres
from the surface, and development
progress averaged approximately
five metres per day. The six metre
high and 5.5 metre wide tunnel is
continuously ventilated with fresh air
pumped to the tunnel face.
The exploration decline is designed to
allow the close-spaced underground
exploration drilling programme to
significantly enhance the resolution
of the geological model and define
the extent of the Ranger 3 Deeps
mineralised zone. The Ranger 3
Deeps mineralised zone is currently
estimated to contain more than
33,000 tonnes of uranium oxide, and
represents a significant resource by
world standards.
Underground diamond drilling began
in May 2013. Preliminary drilling
results were announced in August,
and the third drill rig was mobilised in
November 2013.
The initial underground drilling
results show significant high grade
intersections consistent with the
expected continuity of mineralisation
within this zone of the mineral
resource. In 2013, a total of 13,924
15
Energy Resources of Australia Ltd Annual Report 2013 Operating and Financial Review (continued)
metres of drilling, representing
27 per cent of the overall
programme, was completed.
In October surface preparation works
for a low profile vertical ventilation
shaft were completed and civil works
for the shaft began in November.
The three metre wide ventilation shaft
will extend 280 metres below the
surface.
The scope of Phase 2 development
includes further drilling for resource
definition, construction of a proposed
one kilometre extension of the
exploration decline, excavation
of the low profile ventilation shaft,
and a cross-cut traversing the ore
body to obtain a large sample for
geotechnical analysis, radiometric
sorting, and metallurgical test work.
Ore obtained from the large sample
will not be processed through the
Ranger mill and will be set aside
for return to the decline should the
Ranger 3 Deeps underground mine
not progress.
RAnGeR 3 DeepS
unDeRGRounD mine
pReFeASibility StuDy
During 2013 ERA continued working
on the $57 million Prefeasibility
Study into the potential development
of a Ranger 3 Deeps underground
mine. The Prefeasibility Study is on
schedule, fully funded and on budget.
The study will determine the
economic viability of the proposed
Ranger 3 Deeps underground mine,
optimise mining methods and confirm
metallurgical performance and
production rates.
ERA’s radiometric sorting plant has
been re-commissioned to treat ore
that contains high carbonate content,
such as that which is expected
from the Ranger 3 Deeps mineral
resource. The ore sorter will allow
rapid and accurate sorting of high
carbonate ore, meaning higher and
more consistent ore grades
can be fed to the mill and
processing plant.
16
Environmental studies will also
be conducted, looking at a range
of factors including noise and
vibration, air quality, hydrogeological
assessment, water management,
flora and fauna surveys, radiation
health and safety, transport and
closure planning.
ERA will also consult further with the
Gundjeihmi Aboriginal Corporation
on behalf of the Mirarr Traditional
Owners and other stakeholders as
a component of a broader Social
Impact Assessment (see Ranger 3
Deeps Social Impact Assessment,
page 46).
ERA is targeting late 2015 for
commencement of production if the
underground mine proves viable and
all necessary approvals are obtained.
ReGulAtoRy AppRovAl
Regulatory approval for the Ranger
3 Deeps underground mine is
being pursued in accordance
with the Northern Territory
Core samples from the Ranger 3 Deeps
mineral resource.
Environmental Assessment Act and
the Commonwealth Environment
Protection and Biodiversity
Conservation Act 1999.
In January 2013, ERA submitted
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 (now
the Department of Environment).
In March 2013, both agencies
determined that the proposed action
would require assessment at the level
of Environmental Impact Statement
(EIS) through a single assessment
process. In August, after a period of
public review, the guidelines for the
EIS were finalised and issued. The
draft EIS for the Ranger 3 Deeps
underground mine is expected to be
submitted in 2014.
Energy Resources of Australia Ltd Annual Report 2013 the granting of licences and other
tenements, the extension of mine life
and the approval of developments.
Regulators and stakeholders
Regulatory approvals will be required
to commence any production at the
proposed Ranger 3 Deeps mine or on
any other parts of the Ranger Project
Area. If regulatory approvals are not
obtained in the proposed timeframe,
or are obtained on unfavourable
conditions, ERA will not be able to
proceed with those developments.
Jabiluka
In relation to Jabiluka, ERA
has agreed that future mining
development will not occur without
the consent of the Mirarr Traditional
Owners. There is no guarantee that
this consent will be forthcoming
and, by extension, that the Jabiluka
deposit will be developed.
For further details on the
Ranger 3 Deeps referral and the
Commonwealth decision, visit the
Department of Environment website
at http://www.environment.gov.au.
buSineSS RiSkS
The business risks that could
adversely affect the achievement of
the financial performance or financial
outcomes set out in this section are
described below.
Exploration and project
development risks
As with all exploration projects,
there is a risk that the Ranger 3
Deeps exploration decline or other
exploration activities that ERA is
undertaking may not be successful
in delineating economically mineable
reserves and resources. There is also
a risk that the development of the
Ranger 3 Deeps resource may not be
economically viable within the time
constraints of the Ranger Section
41 Authority.
Rehabilitation
ERA currently has authority to
produce uranium oxide at the
Ranger Project Area until January
2021 and must fully rehabilitate the
site by January 2026. In 2013 ERA
completed comprehensive
technical studies on the
rehabilitation of the Ranger Project
Area, including optimisation of
strategies and costings.
The ultimate cost of rehabilitation is
uncertain and whilst ERA has used
its best estimate, costs may vary in
response to factors such as legal
requirements, technological change
and market conditions.
In addition, if the Ranger 3 Deeps
mine is not developed, in the absence
of any other successful development,
ERA may require an additional
source of funding to fully fund the
rehabilitation of the Ranger Project
Area. Any inability to obtain additional
capital or to monetise assets would
have a material impact on ERA’s
business and financial performance.
Water management
Management of water on the Ranger
Project Area is critical to the ongoing
operation of the Ranger mine and
rehabilitation activities. ERA has a
number of procedures and initiatives
underway in respect to water
management, including the newly
constructed Brine Concentrator.
To the extent that these initiatives
cost more than expected or ERA
is required to implement further
initiatives, ERA’s financial and
operational performance and position
may be impacted.
Uranium market demand,
price and foreign exchange
risks
ERA’s business relates primarily
to the production and subsequent
sale of uranium oxide to a variety of
customers. Demand for, and pricing
of, uranium oxide remains sensitive
to external economic and political
factors, many of which are beyond
ERA’s control. Global uranium and
foreign exchange market fluctuations
may materially affect ERA’s
financial performance.
General regulatory risks
Uranium mining in Australia
is extensively regulated by
Commonwealth, State and Territory
Governments. In particular, the
approval processes for uranium
mining are more onerous, and
therefore more costly, than for the
mining of other minerals.
Government actions in Australia and
other jurisdictions in which ERA has
interests, including new or amended
legislation, guidelines and regulations
in relation to the environment,
uranium or nuclear power sectors,
competition policy, native title, and
cultural heritage could impact ERA’s
operations. Operational aspects that
may be affected include, among
other things, land access rights,
17
Energy Resources of Australia Ltd Annual Report 2013 Future Supply
Evaluation and
exploration
During 2013 ERA continued work on
the $120 million exploration decline
to conduct close spaced underground
drilling of the Ranger 3 Deeps
mineral resource, and the $57 million
Prefeasibility Study into the proposed
Ranger 3 Deeps underground mine
(see Operating and Financial Review,
page 9).
The exploration decline project
and Prefeasibility Study include
52,000 metres of close spaced
diamond drilling to further delineate
and determine the extent of the
Ranger 3 Deeps mineralised zone.
Underground drilling commenced
in May 2013. As at 31 December
2013, a total distance of 13,924
metres of drilling, representing 27 per
cent of the overall programme, was
completed.
The initial underground drilling
results show significant high
grade intersections consistent
with the expected continuity of
mineralisation within this zone of the
mineral resource.
Significant intercepts in the first cross
section include:
• 39m @ 0.882% eU3O8 from 302m
• 35m @ 0.387% eU3O8 from 309m
• 33m @ 0.410% eU3O8 from 345m
Significant intercepts in the second
and third cross sections include:
• 14m @ 0.262% eU3O8 from 300m
ERA Exploration Manager Greg Rogers inspects a core sample from Ranger 3 Deeps.
• 22m @ 0.368% eU3O8 from 232m
• 23m @ 0.225% eU3O8 from 243m
ERA will be in a position to review
the Ranger 3 Deeps resource model
in the second half of 2014 and make
appropriate adjustments to the
mineral resource statement.
During 2013, ERA also conducted
surface exploration drilling on the
Ranger Project Area, at a cost
of $10.5 million. 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. No significant
interceptions were encountered.
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.
Ranger Project
Area Reserves
and Resources
During 2013, the Proved and
Probable Ore Reserves for Ranger
decreased from 9,675 tonnes of
uranium oxide to 6,756 tonnes of
uranium oxide as a consequence
of depletion by processing (3,419
tonnes of uranium oxide).
After metallurgical recovery/losses
(84.4%) and drumming of opening
inventory (75 tonnes of uranium
oxide) this equates to an annualised
drummed production of 2,960 tonnes
of uranium oxide. This depletion was
partially offset by the processing
of low grade ores (218 tonnes
of uranium oxide) not previously
included in reserves and a favourable
variance in the recovery of 282
tonnes of uranium oxide from laterite
ores that was not forecast by the
stockpile model.
For the same period, Ranger Mineral
Resources decreased from 63,377
tonnes of uranium oxide to 56,333
tonnes of uranium oxide. The majority
of this decrease (7,040 tonnes of
uranium oxide) was attributable to
the unrecoverable placement of low
grade stockpiled materials into the
base of Pit 3 in preparation for tailings
and brine disposal from 2015.
The table at right sets out the
reconciliation of Ore Reserves:
18
Energy Resources of Australia Ltd Annual Report 2013 In 2013, 54 drill holes were completed for a total of 13,924
metres as part of the underground drilling programme.
cONTAiNEd U3O8 – TONNES
9,675
RANgER REcONciLiATiON
Ore Reserves as at 1 January 2013
Ore Reserves depleted by processing
Other adjustments
See Explanatory Notes
Ore Reserves as at 31 december 2013
ExPLANATORy NOTES
Processing of low grade ore
Favourable Stockpile Model Variance in Laterites
(3,419)
500
6,756
218
282
19
Energy Resources of Australia Ltd Annual Report 2013 Future Supply (continued)
ERA 2013 Ore Reserves & Mineral Resources
20
CUT-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 2013AS AT 31 DECEmbER 2012 ORE (mt)% U3O8t U3O8ORE (mt)% U3O8t U3O8RANGER ORE RESERvESCurrent Stockpiles5.470.1236,7567.340.1329,675Ranger No. 3 Pit In situ Proved------Probable------Sub-total Proved and Probable Reserves5.470.1236,7567.340.1329,675Total Ranger No. 3 Stockpiles, Proved and Probable Reserves5.470.1236,7567.340.1329,675 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 2013AS AT 31 DECEmbER 2012RANGER mINERAL RESOURCESIn Addition To The Above Ore ReserveCurrent Mineralised Stockpiles49.890.0523,03769.490.0430,080In situ resource Measured------ Indicated9.490.3230,8209.490.3330,820Sub-total Measured and Indicated Resources59.380.0953,85778.980.0660,900Inferred Resources0.650.382,4770.650.382,477Total Resources60.030.0956,33479.620.0863,377 Energy Resources of Australia Ltd Annual Report 2013 21
As At 31 December 2013As At 31 December 2012cUt-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 resources15.440.4873,94015.44 0.48 73,940 Note: Ore reserves and mineral resources for Energy Resources of Australia Ltd managed operations are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, December 2004 (the JORC Code) as required by the Australian Securities Exchange (ASX). The JORC Code envisages the use of reasonable investment assumptions, including the use of projected long-term commodity prices, in calculating reserve estimates.As required by the ASX, the above tables also 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 report that relates to Ranger and Jabiluka Mineral Resources or Ore Reserves is based on information compiled by geologists Greg Rogers (a full time employee of Energy Resources of Australia Ltd) and Stephen Pevely (a full time employee of Energy Resources of Australia Ltd) and mining engineer John Murphy (a full time employee of Energy Resources of Australia Ltd) who are all members of the Australasian Institute of Mining & Metallurgy. Greg Rogers, Stephen Pevely 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 JORC Code. Greg Rogers, Stephen Pevely and John Murphy consent to the inclusion in this report of the matters based on their information in the form and context in which it appears. Summary data for year end 2012 are shown for comparison. Metric units are used throughout. The figures used to calculate reserves and resources are often more precise than the rounded numbers shown in the tables, hence small differences might result if the calculations are repeated using the tabulated figures.Energy Resources of Australia Ltd Annual Report 2013 Markets and Customers
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 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.
eRA produced 2,960 tonnes
of uranium oxide in 2013
and sold a total of 2,815
tonnes of uranium oxide.
eRA completed open cut
mining from pit 3 at the end
of 2012. For the majority
of 2013, eRA processed
ore from above-ground
stockpiles built up over a
number of years.
eRA has a long production
history and a strong
relationship with a diverse
global customer base.
ERA’s long production history and
strong relationship with its customer
base will create a platform for
continuity of supply and operations
should the Ranger 3 Deeps
underground mine be developed
as planned.
ERA’s average realised price in 2013
was $US53.92 per pound (2012:
US$58.33), which was higher than
the spot price over the course of the
year. This is due to ERA’s strategy of
long-term contracting using a variety
of pricing mechanisms so that the
Company is not overly dependent on
the spot price, which historically has
lagged long term prices.
The global uranium market remains
characterised by reduced demand
and excess supply, resulting in
extremely weak prices, with the
spot price for uranium falling to
2006 levels.
More than two years since the
accident at Fukushima, the
Japanese reactor fleet of 54 units
remains shut down. The Japanese
Government and regulatory bodies
are implementing a programme to re-
start some reactors in the first part of
2014. It is expected that three to four
reactors will be back on line in the
first half of 2014, and possibly five to
ten re-started each year after that.
Compounding the effects of reduced
demand are continued increases
in global mine production and
secondary-supply disposition from
a variety of sources, creating a
substantial supply glut.
Despite this, the longer term outlook
for uranium remains encouraging.
Demand growth from 2015-2025
Following the completion of open pit mining
in December 2012, ERA has been a stockpile
miner. A haul truck is shown here carrying
stockpile ore to the process plant for processing.
is forecast to be higher than at any
period since the 1970s, mainly due to
new reactor growth in China.
While the outlook for uranium in
the short term has worsened since
Fukushima, any impact on long
term demand will be largely offset
by China’s growing nuclear power
programme. China will likely become
the world’s largest user of nuclear
energy, surpassing the USA in the
early part of the next decade. China’s
ambitious new-build programme will
see nuclear capacity growing from
the current level of 14 gigawatts to an
estimated 60 gigawatts by 2020, and
over 100 gigawatts by the middle of
the next decade. ERA was China’s
first supplier from Australia and it
remains an important and growing
destination for ERA production.
Of the 70 reactors currently under
construction world-wide, 47 of those
are in Asia (including India). Since
2000, 50 new reactors have been
connected to the global power grid,
40 of which are situated in Asia. The
primary drivers are rapidly expanding
power requirements needed to
sustain economic growth in the
region, energy security concerns,
and a desire to reduce long term
greenhouse gas emissions.
While the next few years could
remain challenging for all uranium
producers, ERA’s work to define
a future as an underground
miner will position the Company
to take advantage of expected future
nuclear power growth.
22
Energy Resources of Australia Ltd Annual Report 2013 Health and Safety
eRA has established clear
goals, accountabilities and
systems in pursuit of the
company’s goal of zero
harm.
these goals, accountabilities
and support mechanisms
are designed to create and
sustain a strong workplace
culture of shared and
personal responsibility
for safe behaviour.
this workplace culture
is introduced to new
employees and contractors
through induction
processes, reinforced in day-
to-day operations through
‘tool box’ talks and safety
leadership, and supported
by comprehensive systems
and training materials.
in 2013, eRA maintained
its focus on operational
process safety, and the
critical control monitoring
plans that provide focus on
our key safety risks, in order
to identify and manage
safety risks that could
result in serious injury or
fatality.
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. Safety
leadership continued to be of critical
importance in the planning and
execution of major labour intensive
projects in 2013, including the
successful construction of the Brine
Concentrator, ongoing construction
of the Ranger 3 Deeps exploration
decline, the commencement of
underground drilling operations,
progressive rehabilitation projects
involving the backfilling of Pit 3, and
dewatering activities in Pit 1.
During 2013 ERA continued to
emphasise the importance of safety
through leadership training and
through targeted safety campaigns,
including road safety, protection
from hand injuries, pre-start safety
planning for maintenance crews,
and hydration and heat stress
management.
Although strong, ERA’s safety
performance in 2013 did not maintain
the high standards established
in 2012, as reflected in the 2013
All Injury Frequency Rate (AIFR)
and Lost Time Injury Frequency
Rate (LTIFR). However, the
Company continues to demonstrate
improvement in safety performance
over the long term.
In August 2013, ERA set a new
record of 188 consecutive injury free
days, surpassing the previous record
of 179 days.
Safety Advisor Anthony Reid and Supervisor
Water Management Edwin Wharam, undertake
a safety interaction to assess risks before
starting a task.
No employees were injured during
the leach tank event on 7 December
2013 or in the clean-up operation that
followed. ERA personnel displayed an
exemplary attitude towards safety by
prioritising their own safety at the time
when the tank failed.
Injury rates
ERA’s AIFR measures all reportable
injuries and covers Lost Time Injuries,
Restricted Work Injuries and Medical
Treatment Cases per 200,000 hours
worked.
ERA’s safety performance while
still strong did not maintain the high
standards set in 2012, with an AIFR
of 0.91 (2012: 0.52).
ERA’s Lost Time Injury Frequency
Rate (LTIFR) per 200,000 hours for
2013 was 0.52 compared with 0.31
in 2012.
In 2013 there were three recordable
Medical Treatment Cases. A worker
sustained a laceration to the left
thumb requiring three stiches; a
worker sustained a laceration to a
finger requiring four stitches; and
a worker sustained fractured teeth
while removing an inspection cover
from a faulty butterfly valve. All these
workers have returned to work of
full duties.
There were four Lost Time Injuries. A
worker sustained a finger crush while
working on a compressor; a worker
walking on uneven ground dislocated
23
Energy Resources of Australia Ltd Annual Report 2013 Health & Safety (continued)
an ankle and fractured lower leg
bones; a worker sustained a hand
injury while using a spanner; and
a worker slipped on loose dirt and
strained a shoulder.
Rio Tinto Chief
Executive’s Safety
Award nomination
In September 2013 Rio Tinto
representatives carried out site
inspections as part of ERA’s
nomination for the Rio Tinto Chief
Executive’s Safety Award. The
award recognises leadership and
achievement in safety performance
across Rio Tinto’s operations globally.
Over the past ten years ERA has
achieved a significant improvement
in safety performance; however
events in the latter part of 2013 have
affected this performance and show
the importance of maintaining a focus
on safety.
Safety reviews
During 2013 ERA continued to focus
on Process Safety, which deals
with management of risks related to
catastrophic incidents that could
lead to multiple fatalities. Process
Safety reviews in 2013 examined
operational fire management and
suppression capabilities, such as
the readiness state of automated fire
suppression systems.
Process Safety review activities
included the use of x-ray inspection
techniques to assess the condition
of water pipes which supply
automatic fire suppression systems.
The x-ray inspection techniques
are able to detect and identify
the location of potential corrosion
points or blockages within the fire
suppression systems across Ranger
infrastructure, both within buildings
and underground.
The Process Safety focus reflects
ERA’s Critical Control Management
Plan introduced in 2012, designed
to address significant risks which
24
could result in serious injury or
fatality. Based on Rio Tinto’s Semi
Quantitative Risk Assessment,
the Critical Control Management
Plan systematically documents
and addresses control measures
to manage risks such as Process
Safety, classified plant, crane and
electrical competency of contractors,
high voltage switching, road travel,
working at heights, and slope failure/
rock fall.
For example, the Critical Control
Management Plan identified the
260 kilometre drive between the
Ranger mine in Jabiru and Darwin
as one of the biggest safety risks
to ERA’s workers and contractors.
In response, ERA’s road safety
initiatives include stringent safety
standards in all vehicles used for
Company business; mandatory pre-
start vehicle checks and designated
rest breaks; maximum speed limit of
110 kilometres per hour; promotion
of road safety with transporters,
suppliers, contractors and the
community; and ERA’s Award winning
road safety DVD based specifically
on the Arnhem highway, available on
ERA’s website.
Audits
During 2013 ERA successfully
passed independent ‘surveillance’
audits of its Environmental
Management Systems and Safety
and Health Management System.
ERA’s Environmental Management
Systems are certified to ISO 14001,
and the Company’s Safety and Health
Management System is certified to
Australian Standard AS4801.
The surveillance audits are an
independent interim review
designed to identify opportunities
for improvement and to ensure
the systems remain on track for
successful recertification in 2014.
ERA’s Environmental Management
Systems include Water Management
Systems, Safety and Health
Management Systems and Radiation
Management Systems.
In May 2013, ERA successfully
participated in the annual
Government and Stakeholder Audit,
which monitors compliance with
government regulations, and also
completed 13 government and
stakeholder inspections which are
held every four weeks throughout
the year.
Light vehicle safety is a priority at ERA, and safety checks are conducted prior to any journey.
Energy Resources of Australia Ltd Annual Report 2013 Radiation Monitoring
eRA’s Safety and Health
management Systems are
certified to AS4801 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.
These 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 2013 has been performed and
indicates 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 and 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 and
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 the Ranger Section
41 Authority.
Allan Seini, Radiation Specialist, undertakes a
radiation check on vehicles that have entered
mining areas, known as ‘controlled vehicles’.
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.
ERA provides occupational radiation
dose data for workers at Ranger
mine to the Australian Government’s
Australian National Radiation Dose
Register (ANRDR). Dose data for
2011 and 2012 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 is 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.
25
Energy Resources of Australia Ltd Annual Report 2013 Radiation Monitoring (continued)
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
2013 will be reported in the 2013
Annual Radiation Protection and
Atmospheric Monitoring Report that
will be submitted to stakeholders in
March 2014 in accordance with the
Ranger Section 41 Authorisation.
Accordingly, only preliminary data for
2013 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 to radiation dose
for members of the public residing in
Jabiru from the Ranger mine
was 0.055 mSv and is well below
the member of public dose limit
of 1.0 mSv.
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.
Electronic supervised
vehicle access
ERA uses an electronic supervised
vehicle access permit system to
control vehicle movements. This
system consists of a wireless access
card amplifier fixed into every vehicle
that has permission to leave the
Ranger mine site.
The amplifier transmits the driver’s
access pass ID number to the
gatehouse and an automated boom
gate rises if the person and the
vehicle are permitted to leave site.
Controlled vehicles do not have this
amplifier so the driver cannot get
the gatehouse boom gate to rise
if they try to leave site in a
controlled vehicle.
mAximum AnD meAn RADiAtion DoSeS FoR WoRkeRS in 2013
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
AVERAGE RECOMMENDED ANNUAL LIMIT
ERA DESIGNATED WORKER MEAN ANNUAL DOSE
2004
2005
2006
2007
2008
2009
2010
2011
2012
*
2013
ANNUAL RADIATION DOSE (mSv)
2004 – 2013 *At the time of printing, data for Q4 2013 not finalised.
40
30
20
10
5
0
26
Energy Resources of Australia Ltd Annual Report 2013
Former ERA Chief Executive Rob Atkinson, Northern Territory Chief Minister Adam Giles, Northern Territory Minister for Mines and Energy Willem Westra
van Holthe, Mining Operations Manager Mike Stone, current ERA Chief Executive Andrea Sutton and General Manager Operations Tim Eckersley in front
of Pit 3 at Ranger mine.
An event occurred during November
2013 in which two contractors took
a controlled vehicle off site via an
unauthorised route without radiation
clearance. The removal of this
vehicle was unauthorised and the
event was investigated by ERA and
continues to be under investigation
by the Northern Territory Department
of Mines and Energy. Following the
event additional measures have
been put in place to improve security
around the site. These include
additional barriers, gates and fencing,
and restricted access between parts
of Ranger mine site.
Electronic Personal
Dosimeters
ERA continually seeks to improve the
quality of information and monitoring
of employees’ gamma exposures.
To further reduce personal gamma
exposures, ERA invested in
Electronic Personal Dosimeters
in early 2013. Electronic Personal
Dosimeters display real-time dose
data in microsieverts (µSv) and the
data can be downloaded for further
analysis, comparison and storage.
The methods for reducing gamma
exposure are time, distance and
shielding. The most cost-effective
and simple methods to reduce the
exposure is by decreasing exposure
time and increasing distance from
potential sources.
The intention is to use the Electronic
Personal Dosimeters to make
workers more aware of potential
exposures to gamma radiation so that
they can then anticipate and avoid or
minimise their exposures.
27
Energy Resources of Australia Ltd Annual Report 2013 Regulatory Framework
the commonwealth
and State or territory
Governments impose strict
regulations on uranium
mining activities in
Australia.
these regulations govern
a range of key areas
relating to uranium mining
including occupational
health and safety, mine
safety, protection and
rehabilitation of the
environment, native title,
exploration, development,
production, transport,
export, taxes and royalties,
labour standards, waste
disposal, mine reclamation,
toxic and radioactive
substances.
The mining and export of uranium is
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.
ERA’s mining
activities
Commonwealth and Northern
Territory legislation provides the
regulatory framework for ERA’s
uranium mining activities.
ERA’s operations are closely
supervised and monitored by key
statutory bodies including:
• Northern Territory Department of
Mines and Energy;
• Commonwealth Government’s
Supervising Scientist Division;
• Northern Land Council;
• Commonwealth Department of
Industry (formerly the 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).
A total of 30 million tonnes of waste rock will be
backfilled into Pit 3 as part of the rehabilitation
programme.
The Ranger and Jabiluka Minesite
Technical Committees are the
key forums for consideration of
environmental matters relating to
Ranger and Jabiluka. Committee
members include representatives
of the Gundjeihmi Aboriginal
Corporation, the Northern Land
Council, Department of Mines and
Energy, and the Supervising
Scientist Division.
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.
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.
28
Energy Resources of Australia Ltd Annual Report 2013 ERA’s overall progressive rehabilitation programme will draw on learnings from the Ranger mine Trial Landform.
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.
In January 2013, the Gundjeihmi
Aboriginal Corporation on behalf of
the Mirarr Traditional Owners, the
Northern Land Council, ERA and the
Commonwealth Government finalised
a suite of agreements to join others
that govern operations at the Ranger
Project Area, including a new Mining
Agreement.
29
Energy Resources of Australia Ltd Annual Report 2013 SUSTAiNAbLE
dEvELOPMENT
REPORT
30
Energy Resources of Australia Ltd Sustainable Development Report 2013
Sustainable Development
Environment
Land
Employment
Community
32
33
37
41
44
Energy Resources of Australia Ltd Sustainable Development Report 2013
31
Sustainable Development
Overview
the area in which eRA’s
operations take place is
internationally recognised
for unique ecosystems and
biodiversity, significant
environmental and cultural
heritage values, and a
long tradition of human
habitation.
Due to the sensitive
nature of the surrounding
environment, eRA strives
for safety leadership,
environmental protection
and strong and enduring
relationships with all
stakeholders.
ERA’s capability and commitment
to protect the environment in 2013
was confirmed by the Australian
Government’s Supervising
Scientist Division, which conducts
extensive monitoring and research
programmes. The Supervising
Scientist Division’s 2012-13 Annual
Report, states that: “During the year
there were no reported incidents that
resulted in any environmental impact
to the surrounding environment. The
extensive monitoring and research
programmes of the Supervising
Scientist Division confirm that the
environment has remained protected
through the period.”
ERA will continue to engage with
the Mirarr Traditional Owners, with
local communities and all levels
of government to maintain Jabiru
as an important regional centre,
and to create educational, 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. The
Mirarr hold beneficial freehold title
to traditional country via the Kakadu
and Jabiluka Land Trusts and in
accordance with the Commonwealth
(Aboriginal Land Rights (Northern
Territory) Act 1976).
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 across a wide range of
fields and activities that cover
heritage, economic and community
development, education, training and
employment.
ERA recognises that the support
of Traditional Owners is critically
important to future projects and
successful rehabilitation.
Seedlings planted as part of the revegetation of
the Jabiluka Water Management Pond area are
protected by weed mats.
32 Energy Resources of Australia Ltd Sustainable Development Report 2013
Environment
eRA conducts a wide
range of preventative and
monitoring activities to
ensure its operations do
not affect the surrounding
environment.
in addition, the Australian
Government’s Supervising
Scientist Division monitors
the impact of uranium
mining on the environment
and people in the Alligator
Rivers region, including
water quality and aquatic
biology indicators in
waterways adjacent to the
Ranger mine.
eRA’s monitoring results
and the results from the
Supervising
Scientist Division are made
available to the public.
During 2013, results from statutory
monitoring programmes showed
that ERA continued to protect the
surrounding environment. The
Supervising Scientist Division’s 2012-
2013 Annual Report states that its
extensive monitoring and research
programmes “confirm that the
environment has remained protected
through the period.”
ERA and the Supervising Scientist
Division investigated two events
which occurred in November 2013.
A controlled vehicle was driven off
site without radiation clearance and
recovered shortly after by Ranger
mine security. No impact to the
environment resulted from this event.
Secondly, four metal storage drums
of a type previously used at Ranger
mine were found off site. The site
and the drums were inspected by
the Northern Territory Department of
Health and ERA confirmed that no
radioactive material was detected.
An investigation also took place
into the leach tank failure which
occurred on 7 December. A
taskforce consisting of the Northern
Territory Department of Mines
and Energy, Northern Territory
WorkSafe, the Supervising Scientist,
the Commonwealth Department
of Industry and the Gundjeihmi
Aboriginal Corporation was formed to
provide a coordinated and consistent
approach to managing the regulatory
response to this event. Ranger mine’s
containment management systems
fully captured the slurry material
from the failed leach tank and the
environment surrounding Ranger
mine, including Kakadu National
Radiation and Hygiene Laboratory Assistant
Brendan Sanders.
Park, remained protected during
and following this event. These
containment systems are in place to
safeguard Kakadu National Park in
the event of plant or equipment failure
and the systems operated as design
during the event.
Whilst none of these events had any
impact on the environment, ERA
takes the potential risk associated
with these events very seriously and
has investigated each to identify
process improvements. ERA also
recognises the importance of
engaging with stakeholders in regards
to events such as these and will
continue to maintain a close dialogue
with the Gundjeihmi Aboriginal
Corporation, Commonwealth and
Northern Territory governments,
regulatory bodies and other
key stakeholders.
Water
Due to the seasonal high rainfall and
sensitive nature of the environment
in which ERA operates, water
management is critical to the
success of ERA’s business, and to its
environmental protection objectives.
Ensuring that the Ranger mine
can safely and successfully store
and treat large volumes of process
water is a principal element of ERA’s
operational and planning activities.
ERA’s approach to water
management strategy focusses
on comprehensive monitoring
systems, significant infrastructure
Energy Resources of Australia Ltd Sustainable Development Report 2013
33
Environment (continued)
improvements and detailed planning
which anticipates future development.
In recent years ERA has successfully
completed a range of water
management projects including
installation of additional ground water
monitoring bores and continuous
real-time water quality monitoring
stations, surface water and seepage
interception trenches around
stockpiles, lifts of the Tailings Storage
Facility clay core, and the installation
of over 7,000 prefabricated vertical
drains (wicks) across the Pit 1
tailings area.
In 2013 ERA completed further
significant water management
infrastructure projects, including
the construction of the $220 million
Brine Concentrator in September,
the commissioning of the new one
gigalitre capacity Retention Pond 6
in January and the commissioning of
the new process water contingency
transfer pumping system between the
Tailings Storage Facility and Pit 3.
Following the leach tank failure on 7
December 2013, ongoing monitoring
of waterways and billabongs
surrounding Ranger mine has shown
normal readings, confirming that the
environment remains protected.
Management of water
ERA’s Environment, Safety and
Health Management System governs
water management across the full
range of activities at the Ranger
mine site. This includes water
capture, storage, supply, distribution,
sampling, use, treatment and
disposal.
ERA’s Water Management Plan sets
out the operational activities which
fulfil the objectives described in the
Environment, Safety and Health
Management System.
Each year the Water Management
Plan is updated and submitted to
regulatory authorities for approval,
and every two years ERA’s
Environment, Safety and Health
Management System is subject to
independent audit and certification to
international standards (ISO 14001).
Water at ERA is managed according
to quality, which depends on the
nature or class of water. The different
classes of water are process water,
pond water, release water, potable
water and water treatment plant
permeate. A new water class, Brine
Concentrator distillate, has been
added with the commissioning
of the Brine Concentrator. Each
class of water requires a different
management approach.
With the completion of the Brine
Concentrator, ERA now has
significant capacity to treat process
water stored in the Tailings Storage
Facility. The Brine Concentrator can
produce up to 1.83 billion litres of
distillate per year. ERA also uses
micro filtration (MF) and reverse
osmosis (RO) technology to treat
pond water, producing a high
quality permeate stream. The high
quality treated water from the Brine
Concentrator and the existing pond
water treatment (MF/RO) plants is
released to constructed wetlands or
irrigated in designated approved land
application areas.
Brine Concentrator
ERA’s new $220 million Brine
Concentrator was formally opened by
the Northern Territory Chief Minister
Adam Giles on 19 September. The
Brine Concentrator was successfully
constructed on schedule and within
budget, with an excellent safety
performance.
Having completed the first of two
acceptance tests in September, the
Brine Concentrator will go through a
further commissioning and verification
phase before the final acceptance
test in 2014. This plant will provide
ERA with significant capacity and
flexibility to manage and treat process
water inventories.
The Brine Concentrator uses thermal
energy to evaporate water, which
is subsequently condensed and
discharged as clean distilled water.
The facility will treat process water
from the Tailings Storage Facility, and
will play a key role in ERA’s future
progressive rehabilitation activities.
This proven technology is
scientifically and environmentally
sound and will provide ERA with
a treatment means to reduce the
process water inventory and to
manage the impacts of future heavy
rainfall events.
The Brine Concentrator units were
manufactured and supplied by HPD,
LLC, a subsidiary of Veolia Water
Solutions and Technologies. Veolia
Water Solutions and Technologies
has been contracted to operate the
Brine Concentrator on behalf of
ERA in an “operate and maintain”
arrangement.
Water monitoring
ERA has a comprehensive water
monitoring system designed to
ensure that water is managed in
accordance with regulatory and
corporate requirements.
The water monitoring system
comprises over 200 groundwater
bores across the operational area
and 13 continuous real-time water
quality sensing stations within the
Magela and Gulungul creek systems,
located upstream and downstream of
the Ranger mine.
In addition, ERA has an extensive
network of continuous real-time
monitoring stations throughout ERA’s
operational areas, which assist with
day-to-day management of water
inventories and treatment processes.
Data from the water monitoring
system is shared with members of the
Minesite Technical Committee that
includes the Supervising Scientist
Division, and provides accurate
details of composition and flow rates
changes in surface water, ground
water and waterways.
34 Energy Resources of Australia Ltd Sustainable Development Report 2013
On advice from the Gundjeihmi
Aboriginal Corporation, the
ISWWG assessed critically the
following concerns of the Mirarr
Traditional Owners:
• Surface water management
and releases;
• Existing monitoring practices,
compliance framework and
management responses in
relation to surface waters;
• Downstream monitoring to provide
confidence that the environment is
being protected; and
• The integrity and reporting of,
and stakeholder access to,
relevant data.
The ISWWG report sets out 15
recommendations designed to further
enhance the water management,
monitoring and regulatory systems
at Ranger. A plan to implement the
review findings has been developed.
Jabiluka Interim
Water Management
Pond
As part of ERA’s rehabilitation
programme and with the involvement
of the Mirarr Traditional Owners, ERA
safely dismantled the Interim Water
Management Pond at Jabiluka during
the 2013 dry season. Rehabilitation
of the site is well advanced and
revegetation will continue into 2014.
The project forms part of ERA’s
progressive rehabilitation programme
and includes close collaboration
with the Gundjeihmi Aboriginal
Corporation and Mirarr Traditional
Owners. The involvement of the
Mirarr Traditional Owners is vital to
ensure that the land is rehabilitated in
a culturally appropriate manner.
Former ERA Chief Executive Rob Atkinson, Executive Officer of the Gundjeihmi Aboriginal
Corporation Justin O’Brien, Professor Mark Taylor from Macquarie University, Professor Barry Hart
from Water Science Pty Ltd and Monash University, and General Manager Technical and Major
Projects Greg Sinclair at the completion of the independent review of surface water management at
Ranger mine.
The 2012–13 wet season
represents the third season for
which continuous monitoring
of pH, electrical conductivity
and turbidity in the Magela and
Gulungul creeks (upstream and
downstream of the Ranger mine)
has been the primary early warning
monitoring method employed by the
Supervising Scientist Division. The
monitoring stations are equipped
with autosamplers that collect water
samples triggered by in-stream
events such as increases in electrical
conductivity or turbidity exceeding
defined threshold levels.
The Supervising Scientist Division’s
2012-2013 Annual Report states
that “water qualities measured in
Magela and Gulungul creeks for
the 2012-2013 wet season were
comparable with previous wet
seasons, with the results indicating
that the aquatic environment in the
creek has remained protected from
mining activities.”
Owners, released the findings and
15 recommendations of the
Independent Surface Water
Working Group (ISWWG).
The ISWWG was established in
May 2012 to review surface water
management and monitoring
associated with the Ranger mine.
The ISWWG comprised
representatives from ERA, the
Gundjeihmi Aboriginal Corporation,
the Supervising Scientist Division
and the Northern Land Council,
and included an Independent Chair
(Professor Barry Hart, Water Science
Pty Ltd and Monash University),
and an Independent Science
Advisor (Professor Mark Taylor,
Macquarie University).
The outcome of the report and
the consensus agreed to between
the parties delivered a watershed
agreement and helped improve
relations between the Mirarr
Traditional Owners and ERA.
Independent Surface
Water Working Group
In March 2013, ERA and the
Gundjeihmi Aboriginal Corporation,
representing the Mirarr Traditional
The main findings of the ISWWG
were that current Ranger mine
surface water management and
regulatory systems are of a very high
standard, and that an agreed action
plan is desirable to ensure that the
existing standard is maintained.
The pond, which previously stored
rainwater, was drained, the retaining
walls levelled, and the high density
polyethylene pond liner material
cut up and removed from the site.
With collaboration from the Mirarr
Traditional Owners, the pond area
Energy Resources of Australia Ltd Sustainable Development Report 2013
35
Environment (continued)
The Tailings Storage Facility at Ranger mine stores tailings and water that has come into contact with the mine’s uranium extraction circuit.
was then rehabilitated to create a
landform profile that recreates as
closely as possible the land contours
that existed before mining.
During November and December the
area was replanted with locally grown
native plants sourced from the local
Indigenous business Kakadu Native
Plants Nursery in Jabiru. Planting
will continue into 2014 along with
an ongoing monitoring programme.
The revegetation programme
involved ongoing consultation with
the Mirarr Traditional Owners and
their representatives, and provided
support and training to Indigenous
employees to gain accredited
industry certification as part of the
revegetation activities.
The revegetation programme
draws on ERA’s experience with
revegetation strategies developed
from the eight hectare trial landform
project at Ranger (see Trial landform,
page 38).
36 Energy Resources of Australia Ltd Sustainable Development Report 2013
Land
eRA’s land management
responsibilities include
operational works such as
rehabilitation and closure
research and capability
demonstrations such as
the trial landform, pit
3 backfilling project,
pit 1 closure, and land
Application Area
rehabilitation trials and
planning activities.
eRA also carries out land
management activities
associated with controlled
burning, weed management
and feral animal control.
Integrated Tailings,
Water and Closure
Study
In 2013 ERA completed the
Integrated Tailings, Water and
Closure Study, which provides
clear detail of the sequence, timing
and accurate costing of a range of
programmes of work to complete the
closure and rehabilitation of
the Ranger site.
These works comply with the ERA’s
Environmental Requirements and
within the time frame specified under
the Ranger Section 41 Authority.
Closure strategies and programmes
of work required to successfully close
and rehabilitate the Ranger Project
Area once ERA completes mining
and processing activities are set out
in ERA’s mine closure plan which
has been updated to align with the
outcomes of the Integrated Tailings,
Water and Closure study.
The mine closure plan aligns with
ERA’s current plans for Ranger
operations through to 2021, in
accordance with the Ranger
Authorisation, and reflects the latest
scientific and operational knowledge
of rehabilitation techniques.
As a result of the completion of
the Integrated Tailings, Water and
Closure Study, ERA has confirmed
a preferred closure strategy, and
announced a revised provision for
rehabilitation works ($603 million on
a net present cost basis).
The proposed closure strategy
involves:
• Transfer of tailings from the
Tailings Storage Facility to Pit 3
via dredge operations;
• Disposal of brines through the
injection of the brine waste stream
from 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;
• Creation of the final landform
designed to mimic as far as
possible a pre-mining landscape;
• All associated water treatment/
management, environmental
studies, revegetation and
rehabilitation works; and
• Demolition and disposal of all
site infrastructure.
Rehabilitation works for Pit 1 and Pit 3
progressed in 2013, and detailed
planning and studies for brine
injection and tailings transfer to Pit 3
were completed.
Pit 3 backfilling
Pit 3 was ERA’s second operational
pit and was in use from 1994
until November 2012, when ERA
successfully completed open cut
mining. ERA immediately commenced
the initial backfilling project for Pit 3
(see Operations, page 12) to prepare
the pit for closure in line with the
requirements of the Integrated
Tailings, Water and Closure strategy.
Energy Resources of Australia Ltd Sustainable Development Report 2013
37
Land (continued)
A total of 30 million tonnes of low
grade material will be placed in Pit 3
as part of the initial backfill, scheduled
for completion around mid-2014. The
initial backfilling project is progressing
ahead of schedule, with 22.8 million
tonnes of low grade material placed
within the pit at 31 December 2013.
The initial backfill provides the
repository for injection and permanent
storage of brine produced by the new
Brine Concentrator (see Operating
and financial review, page 9), and
also provides the foundation for
permanent storage of tailings from
the Tailings Storage Facility and
ongoing milling operations.
Ultimately the tailings stored in Pit 3
will be covered by deep layers of
material and capped with a landform
that mimics as closely as possible the
surrounding landscape.
The success of current works to
de-water and compress the tailings
mass in Pit 1 will provide valuable
learning and experience for the final
rehabilitation and revegetation works
for Pit 3.
Pit 1 closure
Pit 1 was the Ranger mine’s first
operational pit and was exhausted in
1994. Since then, and in accordance
with current regulatory approvals,
Pit 1 has been used for storage of
tailings and process water.
The early closure and rehabilitation of
the mined out Pit 1, and the removal
of it as a contributor to the process
water inventory is an important part
of ERA’s land rehabilitation and
closure strategy.
Successful rehabilitation of Pit 1 will
provide a practical demonstration of
ERA’s landform rehabilitation skills
and techniques.
In the 2013 dry season ERA began
placing a 2.5 metre thick “pre-load”
layer of low grade rock on top of
geotextile fabric placed over the
tailings mass within Pit 1. The fabric
provides a stable load-spreading
surface for earthmoving machinery
Michelle Bush from ERA’s Environment, Health,
Safety, Water and Tailings team at the Ranger
mine trial landform.
to place and shape the low grade
material preload layer, which will
compress the tailings mass and
activate over 7,000 prefabricated
vertical wick drains.
The wick drains were installed
in 2012 and provide dewatering
pathways to a depth of up to 40
metres in the tailings mass. As the
weight of the pre-load rock layer
increases, the wicks will dewater
the upper level of the tailings,
compressing and consolidating the
tailings mass. Water expressed via
the wicks will be transferred to the
Tailings Storage Facility to maintain a
relatively dry tailings surface in Pit 1.
Once a stable surface has been
created, backfill operations using
heavy machinery are planned,
placing layers of material until the
final landform is achieved.
The new landform will then be
revegetated using knowledge gained
from ERA’s trial landform project, the
Jabiluka Interim Water Management
Pond rehabilitation experience and
other targeted research.
Trial landform
ERA’s large-scale trial landform
is providing significant practical
experience and leading research
opportunities about effective
revegetation and rehabilitation
strategies for disturbed areas of the
Ranger Project Area.
Constructed in 2009, the eight
hectare trial landform provides
an opportunity to assess erosion,
rainfall run-off, and the success
of revegetation and natural
regeneration.
The landform comprises layers
of rock and laterite, planted with
local native plants grown from
locally sourced seed, collected and
propagated by local Indigenous
business Kakadu Native Plants.
Some trees have recorded heights
of nine metres, and following the
first flowering observed in 2011,
fifteen tree species including Darwin
Woollybut (Eucalyptus miniata)
are flowering for the second
consecutive year.
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.
With support and funding from ERA
and Australian Postgraduate Awards,
Charles Darwin University PhD
student Jillianne Segura is studying
the role that water retention plays
within Kakadu and the reconstructed
waste rock landform. In October
38 Energy Resources of Australia Ltd Sustainable Development Report 2013
Ms Segura presented at the
International Society of Ecological
Restoration’s fifth World Conference
on Ecological Restoration. Ms
Segura’s paper, ‘Is there enough
water in waste rock substrates to
restore a functional tropical savannah
to mined lands in northern Australia?’
incorporated her research into the
eco-hydrology of mine restoration
strategies at Ranger uranium mine.
Weed management
ERA carries out regular weed
mapping and weed control activities
on the Ranger Project Area and
Jabiluka lease. Activities are
guided by ERA’s five-year Weed
Management Plan.
Weed mapping is conducted after
the finish of the wet season in April
and May. This is because wet season
floodwaters are a primary dispersal
mechanism for weed seeds. The
annual weed survey of the Ranger
Project Area and Jabiluka Lease
was conducted between April and
June 2013.
Thirteen Weed Management Areas
were surveyed in 2013. Eight of the
surveyed areas had an increase
in weed area since they were last
surveyed, while four had a decrease
in weed area, and one area remained
weed-free. No weed species were
found at the drill-pads and tracks
from the recent exploration activities
north of Magela Creek, indicating
that the ERA Exploration team had
maintained a high level of vehicle and
machinery hygiene.
The survey recorded 38 introduced
plant species on the Ranger Project
Area and Jabiluka Mineral Lease,
and this is fewer than the number
of species recorded in 2012. Two
species (Celosia argentea and Emilia
sonchifolia) were recorded for the
first time in 2013, but are likely to
have been present in previous years.
Gamba Grass (Andropogon
gayanus) continues to have been
prevented from establishing on the
Ranger Project Area and Jabiluka
Mineral Lease.
Energy and
greenhouse gas
emissions
The main source of energy at
the Ranger mine is diesel fuel,
which is either used directly in
heavy machinery, or used to
create electricity.
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.
In 2013, the Ranger operation’s
measured total energy consumption
was estimated at 1,483,390
gigajoules (GJ) (2012: 1,627,834 GJ).
Combined greenhouse gas emissions
for 2013 from all diesel, LPG,
petrol use and process emissions,
calculated as carbon dioxide
equivalent (CO2-e), was estimated
at 113,844 tonnes (2012: 128,725
tonnes).
The 2013 change is due to energy
savings and improved efficiency
achieved in the mine through a
reduced fleet, reduced energy
demand associated with downhill
haulage for the Pit 3 backfill, and
the use of a mobile discriminator.
Diesel savings were partially offset
by continued work on the Ranger
3 Deeps exploration decline and
completion of the Brine Concentrator.
During 2013 ERA continued work on
energy efficiency activities designed
to comply with Energy Efficiency
Opportunity Legislation.
Product stewardship
Product stewardship of uranium
involves the consideration of health,
safety, environment and social
aspects across the full use of
the product.
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. These
aspects of uranium stewardship
are also regulated by the Australian
Safeguards and Non-Proliferation
Office and the United Nations
International Atomic Energy
Agency (IAEA).
ERA plays a key role in developing
product stewardship and supporting
research for the wider industry
through its work with leading
international organisations, including
the IAEA and the International
Commission on Radiological
Protection (ICRP). ERA also works
closely with key industry associations,
including the World Nuclear
Association (WNA).
These scientific organisations are
at the cutting edge of radiation
protection, ensuring 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
the completion 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
contribute occupational exposure
data as part of a worldwide study of
uranium miners. The data highlighted
the low occupational doses at Ranger
and the protection of workers within
the uranium industry.
Energy Resources of Australia Ltd Sustainable Development Report 2013
39
Land (continued)
ERA also maintains Australian
certification (AS 4801) of its
Safety and Health Management
System, including ERA’s Radiation
Management System.
The backfill of Pit 3 as part of the rehabilitation progamme is ahead of schedule.
Waste management
ERA is collaborating with the
Australian Nuclear Science and
Technology Organisation to
investigate options for managing
contaminated hydrocarbon wastes.
These wastes 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 currently be
moved off site and are stored in steel
drums in a secure facility on site.
The work with Australian Nuclear
Science and Technology Organisation
involved a review of the levels of
contamination in the wastes which
found that approximately half of the
waste can be safely treated off-site
by conventional waste oil
management processes.
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 standards
of behaviours for Company decisions
and actions.
ERA’s environment policy recognises
that exemplary environmental
management is crucial to long term
success. It requires compliance
with all applicable legislation and
other commitments and aims to
continuously improve environmental
management performance.
ERA maintains international
certification (ISO 14001) of its
Environmental Management
System, which includes ERA’s
Water Management System.
40 Energy Resources of Australia Ltd Sustainable Development Report 2013
Employment
With the completion of
open cut mining in late
2012 and the shift to
stockpile processing and
the continuation of cost
saving programmes, eRA’s
workforce was reduced by
18 per cent during 2013.
Where possible, employees
affected by reduced
requirements have been
redeployed within the Rio
tinto group.
As at 31 December 2013,
eRA’s total workforce was
519 people comprising 495
staff and 24 contractor
positions across a range
of full-time, job-sharing,
part-time and secondment
arrangements. this
compares with 639 full-time
equivalent positions at the
same time last year.
Local Indigenous employee Benita Alangale in the water laboratory at Ranger mine.
ERA also directly employed
19 apprentices, four school-
based apprentices, and
10 Indigenous trainees.
ERA’s female employment
participation declined slightly
during 2013 down to 18 per
cent (2012: 20 per cent), with
13 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 balance
work and life commitments.
Indigenous employment has declined
slightly in 2013 to 16 per cent
(2012: 17 per cent). This is due to a
significant portion of staff reduction
occurring in operational activities.
The average rolling staff turnover
in 2013 was 29.25 per cent (2012:
25 per cent). The closure of open
pit mining at Ranger mine and the
subsequent reduction of the mining
fleet resulted in a higher than average
turnover rate. However, a highly
successful redeployment programme
resulted in affected employees
moving to employment elsewhere in
the Australian Rio Tinto Group.
Redeployment and
future staffing levels
With the completion of open cut
mining in late 2012 and the shift to
stockpile processing ERA has
undergone significant structural and
cultural change.
A key impact of these changes
has been a continued reduction in
employment levels as ERA adjusts to
different operating requirements and
a smaller operation.
The construction and commissioning
of the Brine Concentrator in
September 2013 contributed to a
reduction in construction workforce
needs, and efficiency improvements
in the Pit 3 backfill project resulted
in further reductions in operational
staffing levels.
Consequently redeployment support
is a critical component of workforce
management strategies.
During 2013 ERA worked closely with
Rio Tinto to identify redeployment
opportunities with the Rio Tinto
business for mine haul drivers and
machinery operators. This resulted in
the successful redeployment of the
vast majority of workers affected by
changes in business size and scope.
Looking ahead, ERA will continue
to work with Rio Tinto to identify
redeployment opportunities for
further anticipated reduction in
workforce requirements.
Indigenous
employment
ERA is a principal employer in the
West Arnhem region.
ERA’s Indigenous employees are
Energy Resources of Australia Ltd Sustainable Development Report 2013
41
Employment (continued)
seeking to enter the workforce or find
new employment.
The programme, which is part of
ERA’s Indigenous Employment
and Diversity programme, aims
to help local people develop the
additional skills needed to enter the
local workforce.
This support can assist people to
obtain a driver’s licence, learn basic
first aid, and become competent with
basic use of work-related equipment.
The programme also identifies
potential employment needs among
local businesses.
Participants who complete the
Work Ready Programme also
gain nationally recognised
accreditation with a Certificate II
in Resource Infrastructure.
Cultural Awareness
ERA’s Cultural Awareness
Programme provides an essential
introduction to the cultural,
environmental and historical values
of the Kakadu region and the Mirarr
Traditional Owners.
Delivered in partnership with the
Gundjeihmi Aboriginal Corporation
representing the Mirarr Traditional
Owners, the Cultural Awareness
training forms part of ERA’s
induction programme.
During the year, 47 new employees
and long term contractors attended
Cultural Awareness training.
Education
Partnership
2013 marked the fourth full year
of operation for the award winning
Education Partnership between ERA
and the West Arnhem College.
In January the West Arnhem College
held a graduation ceremony for the
first two students from Gunbalanya
Campus in Arnhem Land to reach and
complete Year 12 in 2012, providing
an inspirational example of the great
potential of local students. In 2013
The health and safety of the workforce is a foremost priority at ERA. The Ranger mine Emergency
Response Team practise a confined space rescue and resuscitation.
employed in positions at many
levels within the Company, from
operations to human resources to
leadership roles.
At 31 December 2013, Indigenous
employees represented 16 per
cent of all ERA full-time equivalent
employees. ERA employed 10
Indigenous trainees across a range
of operation departments. Trainees
are matched with mentors who work
on addressing trainees’ 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, workplace
literacy and numeracy training,
and supporting students from local
communities in work experience and
school-based apprenticeships.
Indigenous Enterprise
Development
During 2013 ERA worked closely
with the Gundjeihmi Aboriginal
Corporation and local businesses to
identify and develop employment and
training opportunities for members
of local Indigenous communities as
part of a new Indigenous Enterprise
Development Scheme.
As part of the scheme, ERA, the
Gundjeihmi Aboriginal Corporation
and Kakadu Native Plants have
worked together to develop an
Indigenous Revegetation Workforce.
The Indigenous Revegetation
Workforce have been involved with
the important land management
project being undertaken by ERA in
close collaboration with the Mirarr,
to rehabilitate the Jabiluka Interim
Water Management Pond (see Water,
page 33).
As part of the Indigenous
Revegetation Workforce training,
the trainees will be working
towards nationally recognised skills
accreditation through a Certificate III
in Land Management.
In addition to revegetation work
at Jabiluka, the Indigenous
Revegetation Workforce will work
on other landform and rehabilitation
projects across the Ranger Project
Area, and assist with weed and fire
monitoring and management.
Work Ready
Programme
ERA worked with local businesses
and training providers during 2013 on
a Work Ready Programme aimed at
school leavers and other local people
42 Energy Resources of Australia Ltd Sustainable Development Report 2013
Dale Gumurdul, Arijay Camp, Jai Nabulward, Christella Namundja and Kirsty Gamarradj are the second round of students to ever graduate Year 12 from
the West Arnhem College in Gunbalanya. They completed their studies in 2013.
During the year ERA employed four
school-based apprentices. This
programme allowed them to obtain a
Certificate II qualification while
still enrolled in school at the West
Arnhem College.
In addition, students and teachers
from the Jabiru and Gunbalanya
campuses participated in tours of
the Ranger mine. These visits help
students learn about employment
opportunities at the Ranger mine
and to answer questions that
teachers or students have about the
Ranger mine.
the number of students staying on
to complete Year 12 at Gunbalanya
Campus increased to six, with five
students graduating.
The Education Partnership provides
quality education and training
opportunities leading to real
employment and career options
for students and families in the
West Arnhem region. It provides 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.
This includes opportunities for work
experience placements and school-
based apprentices at ERA, visits
to ERA by teachers and students,
school presentations from ERA
experts, and support for school-based
education programmes involving
resource industry development.
Energy Resources of Australia Ltd Sustainable Development Report 2013
43
Community
eRA’s relationships,
partnerships and activities
play an important role
in supporting the local
Jabiru community, and
contributing to the regional
and northern territory
economies.
eRA engages with a wide
range of organisations,
community groups and
government agencies across
a broad range of issues,
including cultural heritage,
education, employment and
funding opportunities.
Mining Superintendent David Meador leading a visitor tour of Ranger mine as part of the ERA
Community Information Day.
Relationship with
Mirarr Traditional
Owners
The Gundjeihmi Aboriginal
Corporation represents the Mirarr
Traditional Owners in discussions and
negotiations with ERA on matters of
mutual interest.
This includes water management,
cultural heritage and environmental
protection, employment and
training, housing and town planning,
involvement in decision making
processes, royalties, and the future of
mining at Ranger.
In January 2013 a suite of
agreements covering the Ranger
Project Area were executed by the
Mirarr Traditional Owners, ERA,
the Northern Land Council, and the
Commonwealth Government. These
agreements cover the existing mining
operations and address a range of
historical issues. They also provide
a structured approach for ongoing
engagement and collaboration
between the Gundjeihmi Aboriginal
Corporation and ERA.
The agreements entitle the Mirarr
to greater participation in the
benefits from mining on their
land. This includes an increased
share of royalties, establishment
of a regional socio-economic
sustainability trust. In addition, the
agreement resulted in the formation
of a relationship committee with
44 Energy Resources of Australia Ltd Sustainable Development Report 2013
ERA has a continued presence at the annual local Mahbilil Festival held in Jabiru. ‘Mahbilil’ means
‘afternoon breeze’ in the local Kunwinjku language.
ERA to promote information sharing
and collaboration and an agreed
approach to increasing opportunities
for local Aboriginal participation in
business development, training and
employment.
The Gundjeihmi Aboriginal
Corporation and ERA are represented
on the Kakadu West Arnhem Social
Trust and will each contribute funds
on an annual basis.
Examples of initiatives to be
supported by the trust include
the Children’s Ground, a broad
community social and health
programme, and Culture First, an
education initiative focussed on local
Indigenous children.
The Mirarr Traditional Owners are
also represented via the Gundjeihmi
Aboriginal Corporation on the
Closure Criteria Committee
Working Group and are formal
members of the Ranger Minesite
Technical Committee.
The Mirarr Traditional Owners
and ERA worked together on the
Independent Surface Water Working
Group (ISWWG), which began work
in 2012 and reported in March 2013
on surface water management
and monitoring associated with the
Ranger mine (see Water, page 33).
ERA will continue to work closely
with the Gundjeihmi Aboriginal
Corporation and other stakeholders
on progress on the recommendations
of the ISWWG and other surface
water management activities at
Ranger mine.
The Gundjeihmi Aboriginal
Corporation and Mirarr Traditional
Owners are also participating in
rehabilitation planning, including
decommissioning and rehabilitation
of the Jabiluka Iterim Water
Management Pond (see Environment,
page 35).
Both the Gundjeihmi Aboriginal
Corporation and ERA are integral to
the future of Jabiru and the region,
and are collaborating around town
governance, housing, local and
Northern Territory Government
engagement, infrastructure and local
business development.
Going forward, ERA will continue
to engage with the Gundjeihmi
Aboriginal Corporation representing
the Mirarr Traditional Owners on
issues of common interest.
Royalty payments
ERA’s royalty payments are a major
source of income for the Indigenous
community and the Northern Territory
Government.
ERA makes royalty payments of 5.5
per cent of net sales revenue from
Ranger mine production.
In 2013, 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.
In 2013, ERA’s royalties totalled
$18.4 million (2012: $20.6 million).
As ERA is now processing ore
stockpile, under the current
operating agreements and legislative
framework, royalty payments will
continue to decline in line with
forecast production rates, unless the
Ranger 3 Deeps underground mine
is developed.
Collaboration on
future of Jabiru
ERA is pleased to note progress with
respect to the future of Jabiru.
In June 2013 the Commonwealth
Government introduced legislation
into Parliament that allowed for the
inclusion of Jabiru and surrounding
lands in Schedule 1 of the (Aboriginal
Land Rights (Northern Territory)
Act 1976).
ERA has provided strong and active
support for the inclusion of Jabiru
in the Act. This is a significant step
towards formally recognising the
Mirarr as traditional landowners of
the long-running Jabiru native title
claim area, which includes the Jabiru
township.
This formal recognition of Mirarr
title to land, enshrined in land
rights legislation, is also welcome
progress toward resolving the future
governance of Jabiru and developing
a long term vision for the town.
ERA will continue to support the
finalisation of arrangements required
to transfer these lands from the
Commonwealth to the Kakadu
Aboriginal Lands Trust, including
establishment of a new town lease
agreement between the Gundjeihmi
Aboriginal Corporation and the
Northern Territory Government.
Community
engagement
ERA engages with a wide range of
stakeholders and community groups
within the local Jabiru community
and in other parts of the Northern
Territory.
This engagement is designed to
provide members of the public,
community groups, and other
stakeholders with opportunity to
learn about and understand
ERA’s operations.
In addition ERA’s community
engagement provides support to help
protect and promote cultural heritage,
community health, small business
development, including Indigenous
business, and education and sport
opportunities for young people.
During 2013 ERA maintained a
local presence and information
source at the ERA Community
Office in Jabiru, and provided formal
quarterly business updates with key
stakeholders and community groups
in Jabiru.
Energy Resources of Australia Ltd Sustainable Development Report 2013
45
Community (continued)
Ranger 3 Deeps
Social Impact
Assessment
As part of the Ranger 3 Deeps
Prefeasibility Study, ERA is examining
the flow-on effects on the local and
wider communities created by an
underground mining operation.
The Ranger 3 Deeps Social Impact
Assessment will identify potential
positive and negative social impacts
of the proposed underground mine.
The assessment will consider the
potential impacts on stakeholders in
the local Jabiru community, and in
the wider Alligator Rivers region, as
well as impacts across the Northern
Territory and at the national level.
Expected to be completed in mid-
2014 and made available as part
of Environmental Impact Statement
documents, the Social Impact
Assessment will be provided to
the Commonwealth and Northern
Territory Governments to complement
approvals for the proposed
underground mine.
The inaugural Kakadu Triathlon was held in Jabiru in May 2013 and had 91 participants.
Community
partnerships
ERA provides support to the
community through community
partnerships, in-kind support
and donations of equipment and
resources.
In 2013, ERA’s community
partnership and sponsorship
programme provided support for local
community-based events, schools
and students, sport, the arts and
regional festivals.
ERA sponsors the George Chaloupka
Fellowship programme run by the
Museum and Art Gallery of the
Northern Territory Foundation. The
George Chaloupka Fellowship
promotes and supports research
and conservation of Aboriginal rock
art located in Arnhem Land Plateau
region in the Northern Territory of
Australia.
In November the $28,000 Fellowship
was awarded to Ms Tristen Jones of
the Australian National University.
The Fellowship was awarded to
support Ms Jones’s rock art research
project in the East Alligator River
precinct in western Arnhem Land.
ERA continued its support for
the Mahbilil Festival in Jabiru in
September. The Mahbilil Festival is
the feature community and cultural
event for Jabiru and the West Arnhem
region, which celebrates the diversity
of the region through music, dance,
art and entertainment. As a long
term major sponsor of the festival,
ERA was proud to be involved again
this year through its community
information stall along with many
other stallholders.
Community
Information Day
ERA held a successful Community
Information Day in September to
provide an opportunity for local
community members, tourists and
other people to visit Ranger mine,
and to learn about ERA’s operations
and work to protect the environment.
46 Energy Resources of Australia Ltd Sustainable Development Report 2013
Footy Means Business
During 2013 ERA continued to support Rio Tinto’s Footy Means Business programme, which works with
the Australian Football League (AFL) to provide leadership and sports development opportunities for young
Indigenous men.
ERA supported Jabiru AFL players Travis Vigona, Peter Cooper and Dylan Guyamala to take part in leadership
development and football skills clinics in Melbourne and Sydney. At the end of the programme, participants
competed for the Rio Tinto Cup at the Melbourne Cricket Ground.
Managing Director of Rio Tinto Australia David Peever with Dylan Guymala, Peter Cooper and Travis Vigora who participated in the ‘Footy means
Business’ programme in 2013.
A free barbecue and information stall
was set up in Jabiru for the day and
buses ran regular tours out to the
mine site, with ERA staff on hand to
explain the mine’s operations.
Over 70 people took part in tours,
and many more attended the stall
and barbecue. The positive response,
particularly in relation to ERA’s
operations, revealed a genuine
interest among many members of the
public to learn about ERA.
Community Support
ERA’s support for cultural and
sporting activities in 2013 included
sponsorship of the National
Indigenous Music Awards in August
and the inaugural Kakadu Triathlon in
Jabiru in May.
The National Indigenous Music
Awards celebrate traditional and
contemporary artists from around the
country, with female artist Jessica
Mauboy winning National Artist of
the Year.
Over 91 people took part in the
highly successful Kakadu Triathlon,
organised by ERA and Darwin
Triathlon as a fundraiser for
CareFlight. The triathlon involved a
250 metre swim in the Jabiru town
pool, a 10 kilometre bike ride and a
2.5 kilometre run. The event gained
support from 36 sponsors, including
Veolia Water, ERA, Spotless, West
Arnhem Shire Council, West Arnhem
College, Jabiru Fire Station and
Jabiru Police Station.
Energy Resources of Australia Ltd Sustainable Development Report 2013
47
FiNANciAL
REPORT
2013
48
Energy Resources of Australia Ltd Financial Report 2013
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
2013 ASX Announcements
Ten Year Performance
Index
Corporate Directory
50-75
76
77-81
82
83
84
85
86-121
122
123-124
125-126
127
128
129
130
Energy Resources of Australia Ltd Financial Report 2013
49
Directors’ Report
Directors
1. mR peteR mcmAHon
3. mR Rob AtkinSon
chairman
BEcon(Hons), MEcon, MSc
chief Executive
BE(Hons) Mining & Petroleum Engineering
Appointed as Managing Director in September 2008
and Chief Executive in September 2008. Resigned as
a Director and Chief Executive in September 2013 to
take up the role of Rio Tinto Copper Chief Operating
Officer based in London. 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 was the Chairman of the Australian
Uranium Association. Mr Atkinson has been appointed
as a Vincent Fairfax Fellow and was a member of the
Advisory Board of the Melbourne Business School,
Centre for Ethical Leadership.
Appointed as a Director in November 2012 and
Chairman in January 2013. 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 was
a non-executive Director and Chairman of Inova
Resources Limited until November 2013.
2. mS AnDReA Sutton
chief Executive
BE (Hons) Chemical, GradDipEcon, GAICD
Appointed as Managing Director in September 2013
and Chief Executive in September 2013. Ms Sutton
brings extensive operational, technical and corporate
experience to ERA from her 19 years with Rio Tinto.
Ms Sutton was previously Managing Director with the
Rio Tinto Support Strategy Review team. Prior to that,
Ms Sutton held various roles within the Rio Tinto Group
including General Manager Operations at the Bengalla
Mine and General Manager Infrastructure with Rio Tinto
Iron Ore.
5
2
1
7
4
6
50 Energy Resources of Australia Ltd Financial Report 2013
4. DR Helen GARnett
6. mR JoHn peGleR
independent Non-Executive director
BSc(Hons), PhD, PSM, FTSE, FAICD
independent Non-Executive director
BE (Mining), MAusIMM, MAICD
Appointed as a Director in January 2005. Chair of the
Audit and Risk Committee and member of Remuneration
Committee. From 2003 to 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 and 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, Director of the Museum
and Art Gallery, NT Foundation, and Director of Sugar
Research Australia.
5. mR peteR tAyloR
Non-Executive director
BA, BSc, LLB, LLM, FAICD
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.
Appointed as a Director in July 2009. Member of the
Audit and Risk Committee and Chair of Remuneration
Committee. Mr Pegler also is a non-executive Director
and Chairman of Bandanna Energy Limited and non-
executive Director of WDS Ltd and CS Energy Limited.
He is a Past President and a Life Member of the
Queensland Resources Council and a past Chairman
and Director of the Australian Coal Association Ltd.
Mr Pegler formerly was Chief Executive Officer of
Ensham Resources Pty Limited and previously has
held operational roles within BP Australia Limited and
the Rio Tinto Group including President Director of
major gold producer PT Kelian Equatorial Mining in
Indonesia and Managing Director Group Procurement
Eastern Hemisphere.
7. mRS Helen neWell
Non-Executive director
BCom (Hons), MBA, GAICD
Appointed as a Director in November 2012. Mrs
Newell is currently Vice President Infrastructure and
Transformation, Rio Tinto Energy. 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, the
Toll Group and Asciano. Mrs Newell is also a Rio
Tinto Director of Port Waratah Coal Services Limited,
Dalrymple Bay Coal Terminal Pty Ltd and the
Ascham School.
Energy Resources of Australia Ltd Financial Report 2013
51
Directors’ Report (continued)
Executive Committee
1. mS AnDReA Sutton
Managing director and chief Executive
BE (Chemical), GradDipEcon, GAICD
3. mR tim eckeRSley
general Manager, Operations
B.Sc. Agric (Hons)
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.
Appointed as Managing Director in September 2013
and Chief Executive in September 2013. Ms Sutton
brings extensive operational, technical and corporate
experience to ERA from her 19 years with Rio Tinto.
Ms Sutton was previously Managing Director with the
Rio Tinto Support Strategy Review team. Prior to that,
Ms Sutton held various roles within the Rio Tinto Group
including General Manager Operations at the Bengalla
Mine and General Manager Infrastructure with Rio Tinto
Iron Ore.
2. mR Steeve tHibeAult
Chief Financial Officer and Company Secretary
BA (Accounting, Finance)
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
senior finance roles with Rio Tinto Alcan and Alcan
Aluminium Limited.
52 Energy Resources of Australia Ltd Financial Report 2013
1
2
3
4. DR GReG SinclAiR
6. mR tHomAS Wilcox
general Manager, Technical and Major Studies
BAppSc (Chemistry), PhD, FAusIMM
Company Secretary and Legal Counsel
LLB, BCom
Dr Sinclair was appointed as General Manager Technical
and Major Studies in May 2007. Dr Sinclair has over
28 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.
Mr Wilcox was appointed as joint Company Secretary
and Legal Counsel in November 2013. Mr Wilcox joined
Rio Tinto in 2009 and previously served as legal counsel
in London and Melbourne with Rio Tinto Exploration.
Prior to joining the Rio Tinto Group, Mr Wilcox was
employed in private legal practice since 2003.
5. mR AlAn tietZel
chief Advisor Agreements
BA BCom Dip Ed MBA
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.
4
5
6
Energy Resources of Australia Ltd Financial Report 2013
53
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
HELD ATTENDED
HELD ATTENDED
HELD ATTENDED
HELD ATTENDED
10
10
10
10
10
5
5
1
10
10
9
10
9
5
5
1
3
3
-
3
-
-
-
1
3
3
-
3
-
-
-
1
6
6
-
7
-
-
-
1
6
6
-
7
-
-
-
1
2
3
-
2
-
1
-
1
2
3
-
2
-
1
-
1
DIRECTOR
P McMahon
H Garnett
P Taylor
J Pegler
H Newell
R Atkinson1
A Sutton2
D Klinger3
Note 1
Note 2
Note 3
Resigned as a Director on 23 September 2013.
Appointed as a Director on 23 September 2013.
Resigned as a Director on 8 February 2013.
Mr Atkinson was invited to Audit and Risk Committee meetings prior to his resignation as a Director and attended all such meetings
held during that time.
Ms Sutton was invited to Audit and Risk Committee meetings following her appointment as a Director and attended all such meetings
held during that time.
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 2014 are shown below:
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
42,500
-
-
-
161
-
18,405
-
29,222
6,331
1,188
8,895
-
-
9,368
-
-
2,888
-
-
12,884
-
12,350
8,953
DIRECTORS
P McMahon
H Garnett
P Taylor
J Pegler
H Newell
A Sutton
54
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued) Remuneration report
The Remuneration Report is set out under the following main
headings:
A.
B.
C.
D.
E.
F.
G.
Board oversight of remuneration
Principles used to determine non-executive Directors’
remuneration
Principles used to determine executive remuneration
Details of remuneration
Executive service agreements
Share based compensation
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.
Board oversight of remuneration
A
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.
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 to non-executive Directors. 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:
•
•
•
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. At the 2013
Annual General Meeting, the 2012 Remuneration Report was
approved with 89.32 per cent of shareholders who cast a
vote, voting in favour. The aggregate amount of non-executive
Directors’ remuneration paid in 2013 was approximately
$622,000 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:
Chairman
Non-executive Director
Audit and Risk Committee
Chairman*
Audit and Risk Committee
Member*
Remuneration Committee
Chair*
2014
$162,000
$ 90,000
2013
$162,000
$90,000
$20,000
$20,000
$13,000
$13,000
$5,000
$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 (other than
the Remuneration Committee Chair).
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’).
•
the responsibilities of and time spent by the non-executive
Directors on the affairs of ERA, including preparation time;
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.
55
Energy Resources of Australia Ltd Financial Report 2013
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 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 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 60 per cent of base salary
for the senior executives and the Chief Executive, delivered in
any one year through a blend of PSP and MSP awards. In 2013,
awards were made under the PSP and the MSP.
Excluding post employment and non-monetary benefits, the
proportion of total direct remuneration, assuming maximum
award levels and maximum levels of performance, provided by
way of variable at risk components, assuming maximum levels
of performance, as at 31 December 2013 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 will differ from
these percentages depending on measured Company and
individual performance and the current blend of share plans.
Base salary
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
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.
56
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued) 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 2013 relating to performance in 2012,
as 2013 calculations are not finalised at the date of this report.
The Company’s business performance measures for 2012 used
in the determination of short term incentive plan payments were:
•
•
•
Financial - ERA net earnings and cash flow.
Health and safety - ERA All Injury Frequency Rate, Semi
Quantitative Risk Assessments and closure rates of
Significant Potential Incidents.
Business - ERA drummed production, completion of
mining in Pit 3 and progress on the construction of the
Brine Concentrator and Ranger 3 Deeps exploration
decline projects.
Bonus Deferral Plan
In 2013, 25 per cent of the Chief Executive’s (Mr Atkinson) 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 Bonus Deferral Plan (BDP).
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 (one third) and the
HSBC Global Mining Index (one third), along with improvement
in Rio Tinto EBIT margin (one third) relative to global mining
comparators. This is reviewed at 31 December of the fifth 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, 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. Should this occur
within the first 36 months from date of grant of the award, the
number of shares that can vest will be reduced pro-rata over the
36 month period. The Rio Tinto Remuneration Committee has
discretion to adjust the performance condition to ensure a fair
measure of performance.
As a transitional measure, awards granted in 2013 will vest 50
per cent after four years and 50 per cent after five years.
The same percentage will be satisfied in 2014 through the
deferred award of shares in Rio Tinto Limited under the terms of
the Rio Tinto BDP.
Rio Tinto releases awards to participants as either Rio Tinto
plc or Rio Tinto Limited shares. 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.
Long term incentive plans
In 2012, the Company’s Remuneration Committee considered
the application of the Rio Tinto long term incentive plan 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 2013. During 2014, the Remuneration
Committee will review the position for future years.
Share based remuneration dependent on performance
Performance Share Plan
In 2013 the Rio Tinto Performance Share Plan (PSP) was revised
to incorporate a simple structure to align executive reward with
shareholder returns and operational performance over a long-
term horizon. The 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
Share based remuneration not dependent on
performance
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 for senior executives employed from the Rio Tinto
57
Energy Resources of Australia Ltd Financial Report 2013 plc group of companies. In 2012, the Rio Tinto Remuneration
Committee approved and implemented a new global employee
share purchase plan. The new plan is offered to eligible
employees. Under the plan, employees may acquire shares
up to the value of US$5,000 per year capped at 10 per cent 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.
58
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued) Details of remuneration
D
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)
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2012
167
12
20
175
110
110
90
90
108
103
90
10
80
585
580
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
1
2
16
10
10
-
-
10
9
-
-
-
37
36
182
13
22
191
120
120
90
90
118
112
90
10
80
622
616
P McMahon1
D Klingner2
H Garnett
P Taylor3
J Pegler
H Newell3,4
M Coulter3,5
Total 2013
Total 2012
Note 1
Note 2
Note 3
Note 4
Note 5
Appointed as a Director on 20 November 2012; appointed as Chairman on 8 February 2013.
Resigned as a Director and Chairman on 8 February 2013.
Amounts paid directly to Rio Tinto Limited.
Appointed as a Director on 20 November 2012.
Resigned as a Director on 20 November 2012.
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 2013. This
includes details of the key elements of remuneration and a summary of total remuneration for 2013.
Rob Atkinson (Chief Executive to 23 September 2013)
Base salary
Mr Atkinson resigned as Chief Executive and Managing Director on 23 September 2013. Mr Atkinson’s base salary was 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
employee population.
On 1 March 2013, Mr Atkinson’s base salary was $399,094 (1 March 2012: $399,094).
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 2013 was determined by assessing individual
and business performance against objectives set for 2012.
59
Energy Resources of Australia Ltd Financial Report 2013 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 to Mr Atkinson in 2013, based on the fair
value calculations performed by individual advisors, was 90 per
cent of base salary. The eventual value of the award will depend
on performance during the period 2013 to 2017.
The following individual objectives were set for Mr Atkinson for
2012 were:
•
Continue to improve employee engagement and safety
during a time of significant change and uncertainty
• Maximise the safe recovery of reserves from Pit 3
•
Effective cost management of operational costs, capital
costs and provisions
Continue to execute process and pond water management
at a high level including construction progress on the Brine
Concentrator
Continue constructive engagement with the Gundjeihmi
Aboriginal Corporation on behalf of the Mirarr Traditional
Owners
Demonstrate progress on Ranger 3 Deeps and surface
exploration programmes.
•
•
•
STIP outcomes
Mr Atkinson’s achievement against his 2012 personal objectives
was assessed as very good. In particular:
•
•
•
•
•
•
ERA achieved an All Injury Frequency Rate of 0.52 and a
low severity rate. In addition ERA continued to have a strong
Indigenous workforce representation of 17 per cent and a
female employment participation rate of 20 per cent
ERA safely completed the mining of Pit 3 ahead of schedule
in November 2012
ERA achieved a total of $55 million of cash savings in 2012,
and at the end of 2012 the total cumulative savings were
$75 million
Safely completed a 2.3 metre lift of the Tailings Storage
Facility and the Brine Concentrator project remained on
schedule and budget, in addition the independent review of
surface water monitoring and reporting systems commenced
Key terms of the Ranger Mining Agreement finalised in
2012, with the agreement executed in January 2013 and
discussions with the Gundjeihmi Aboriginal Corporation on
plans for the progressive rehabilitation of the water pond on
the Jabiluka lease commenced
The Gundjeihmi Aboriginal Corporation became a formal
member of the Minesite Technical Committee
•
• Ground was broken on 1 May 2012 for the Ranger 3 Deeps
exploration decline, the box cut was successfully excavated
and portal access tunnel completed in October 2012
Backfill of the box cut was completed by December
2012 and as at 31 December 2012, development of the
exploration decline had progressed to approximately 57
metres
The Ranger 3 Deeps Prefeasibility Study was progressed on
schedule and budget.
•
60
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued) Total remuneration
The table below provides a summary of Mr Atkinson’s total remuneration disclosed for the years of 2011, 2012 and 2013. 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 Company’s remuneration arrangements. The remuneration details set out on page 65 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 65.
(STATED IN $’000)
Base salary paid1
STIP cash bonus2
STIP deferred shares3
LTIP share based payments
Superannuation
Other benefits4
Total remuneration
% change from previous year5
% of STIP cash bonus awarded
% of STIP cash bonus forfeited
2013
2012
2011
287
198
66
181
88
87
907
(4%)
66%
34%
396
189
63
223
92
84
375
208
26
221
89
82
1,047
1,001
5%
67%
33%
14%
65%
35%
Note 1
Note 2
Note 3
Note 4
Note 5
2013 salary paid in financial year to 23 September 2013. Salaries are reviewed with effect from 1 March.
Bonus payment relates to prior year performance.
Value of deferred share awards granted under Bonus Deferral Plan.
Other benefits include accommodation, vehicle and other allowances.
2013 salary annualised for comparison.
Andrea Sutton (Chief Executive from 23 September 2013)
Base salary
Ms Sutton was appointed as Chief Executive and Managing Director on 23 September 2013. Ms Sutton’s base salary is reviewed
annually, with reference to the underlying performance of ERA, the Rio Tinto Group and Ms Sutton; global economic conditions, role
responsibility, an assessment against relevant comparator groups, internal relativities and base salary budgets applying to the broader
employee population.
On 23 September 2013, Ms Sutton’s base salary was $380,000.
STIP objectives and outcomes
Ms Sutton was employed by another Rio Tinto entity in 2012, as such STIP objectives or outcomes are not reported.
LTIP awards granted
As Ms Sutton was employed by another Rio Tinto entity in 2012, LTIP awards are not reported as remuneration.
61
Energy Resources of Australia Ltd Financial Report 2013 Total remuneration
The table below provides a summary of Ms Sutton’s total remuneration disclosed for 2013 for services rendered to ERA. 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 Company’s remuneration arrangements. The remuneration details set out on page 65, 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 65.
(STATED IN $’000)
Base salary paid1
STIP cash bonus
STIP deferred shares
LTIP share based payments2
Superannuation
Other benefits3
Total remuneration
% change from previous year
% of STIP cash bonus awarded
% of STIP cash bonus forfeited
2013
105
-
-
34
21
53
213
-
-
-
Note 1
Note 2
Note 3
Salary paid in financial year from 23 September 2013 to 31 December 2013. Salaries are reviewed with effect from 1 March.
No LTIPs were issued for services to ERA. However, remuneration relates to the progressive vesting whilst employed by ERA.
Other benefits include relocation, vehicle and other allowances.
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 employee population.
At the end of 2012 and 2013, the base salaries of the Company’s key management personnel (other than the Chief Executive) were:
BASE SALARY A’$000 (UNLESS OTHERWISE SPECIFIED)
Steeve Thibeault
Tim Eckersley1
Greg Sinclair
Alan Tietzel
Dan Janney2,5
Chris Tziolis3,5
Peter Eaglen4,5
2013
2012
%
CHANGE
312
305
290
341
-
-
-
312
305
290
341
US238
262
247
-
-
-
-
-
-
-
Note 1
Note 2
Note 3
Note 4
Note 5
Tim Eckersley’s employment with ERA commenced on 10 September 2012.
Dan Janney’s employment with ERA ended on 22 August 2012.
Chris Tziolis’ employment with ERA ended on 5 October 2012.
Peter Eaglen’s employment with ERA ended on 31 January 2012.
Where key management personnel’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 accepted management’s recommendation that there be no increase in the base salary for the Company’s
key management personnel in 2013.
62
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued) STIP objectives and outcomes
Steeve Thibeault
Tim Eckersley
Greg Sinclair
Alan Tietzel
SUMMARY OF INDIVIDUAL OBJECTIVES*
Demonstrate leadership in health, safety and environment
Continue to develop framework for cost optimisation throughout ERA
Streamline procurement practices, in line with Business Review objectives
Complete review and update of rehabilitation provision
Revise and enhance framework for effective management of risk and compliance processes
•
•
•
•
•
• Optimise cash flow management and investment strategy
•
•
•
•
•
•
•
•
•
•
•
As Mr Eckersley joined ERA in September 2012 and was not with the business for a full year,
individual performance objectives for 2012 were not established
Demonstrate leadership in health, safety and environment
Complete the Integrated Tailings, Water and Closure Prefeasibility study on time and on budget
Complete the independent review of surface water management in collaboration with the
Gundjeihmi Aboriginal Cororation on behalf of the Mirarr Traditional Owners and the Supervising
Scientist Division
Progession of the Ranger 3 Deeps Preafeasibility Study in accordance with Ranger 3 Deeps
project timeline
Target generation and progression of the Ranger surface exploration programme
Demonstrate leadership in health, safety and environment
Facilitate communication and provide leadership in implementing Business Review initiatives
Continue to develop constructive engagement, information sharing and reputational
enhancement with government and other stakeholders
Lead stakeholder engagement on major projects to support project development and the future
of Jabiru township
Finalise a suite of agreements with Mirarr Traditional Owners, Northern Land Council and
government
*Individual objectives relate to the 2012 financial year.
63
Energy Resources of Australia Ltd Financial Report 2013 A summary of the individual targets and performance for each of the Company’s key management personnel (other than the Chief
Executive) for the 2012 financial year (STIP paid in 2013) is set out in the table below.
MEASURES
Steeve Thibeault
Financial performance
Business performance
Health and Safety
Individual
Total
Tim Eckersley
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
WEIGHT (%)
SCORE (OUT
OF 200%)
WEIGHTED
SCORE (%)
10.0
15.0
15.0
60.0
100.0
10.0
15.0
15.0
60.0
100.0
10.0
15.0
15.0
60.0
100.0
10.0
15.0
15.0
60.0
100.0
82.1
137.5
167.8
123.0
-
82.1
137.5
167.8
138.3
-
82.1
137.5
167.8
137.0
-
82.1
137.5
167.8
112.0
-
8.2
20.6
25.2
73.8
127.8
8.2
20.6
25.2
83.0
137.0
8.2
20.6
25.2
82.2
136.2
8.2
20.6
25.2
67.2
121.2
LTIP awards
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 2013, 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 2013 to 2017.
64
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued) Executive directors and other key management personnel total remuneration
SHORT TERM BENEFITS
CASH
SALARY
($000)
CASH
BONUS
($000)
OTHER10
($000)
TERMINATION
PAYMENTS
($000)
POST
EMPLOY-
MENT
BENEFITS
SUPER-
ANNUA-
TION
PENSION
($000)
SHARE
BASED
PAY-
MENTS
CASH &
EQUITY
SETTLED
($000)
Executive directors
R Atkinson1
A Sutton2
Other senior executives
S Thibeault3
T Eckersley4
G Sinclair5
A Tietzel6
D Janney7
C Tziolis8
P Eaglen9
Total 2013
Total 2012
2013
2012
2013
2013
2012
2013
2012
2013
2012
2013
2012
2012
2012
2012
287
396
105
321
310
363
92
299
287
401
338
185
196
21
1,776
1,825
198
189
-
100
101
125
-
99
89
124
126
113
76
79
646
773
87
84
53
82
169
32
61
41
55
80
119
58
63
6
375
615
-
-
-
-
-
-
-
-
-
-
-
-
583
-
-
583
88
92
21
61
69
70
17
64
63
22
36
32
19
4
326
332
209
245
34
83
86
75
-
65
70
108
111
74
72
6
574
664
TOTAL
($000)
869
1,006
213
647
735
665
170
568
564
735
730
462
1,009
116
3,697
4,792
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
Note 10
Performance related cash bonus: 66 per cent awarded in 2013, 34 per cent forfeited. 67 per cent awarded in 2012, 33 per cent forfeited.
No cash bonus is disclosed for 2013 as payments made were in respect to services rendered to another Rio Tinto entity in 2012.
Performance related cash bonus: 64 per cent awarded in 2013, 36 per cent forfeited. 68 per cent awarded in 2012, 32 per cent forfeited
Performance related cash bonus: 68 per cent awarded in 2013, 32 per cent forfeited. No cash bonus is disclosed for 2012 as payments made were in respect of
services rendered to another Rio Tinto entity in 2011.
Performance related cash bonus: 68 per cent awarded in 2013, 32 per cent forfeited. 65 per cent awarded in 2012, 35 per cent forfeited.
Performance related cash bonus: 61 per cent awarded in 2013, 39 per cent forfeited. 65 per cent awarded in 2012, 35 per cent forfeited.
Resigned as General Manager Operations on 22 August 2012. Performance related cash bonus: 69 per cent awarded in 2012, 31 per cent 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 payments for short term incentive plan bonus
and pro rata vesting of long term incentive plan. Maximum performance related cash bonus: 62 per cent awarded in 2012, 38 per cent forfeited.
Resigned as General Manager Environmental Strategy on 31 January 2012. Performance related cash bonus: 64 per cent awarded in 2012, 36 per cent forfeited.
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 AASB2
“Share-based Payment”. The fair value of awards granted under the Management Share Plan (MSP), the Bonus Deferral Plan (BDP),
the Performance Share Plan (PSP) and the Share Savings Plan (SSP) 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.
65
Energy Resources of Australia Ltd Financial Report 2013
Executive service agreements
E
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;
Conditional share awards granted from 2013 and held for less than three years at the date of termination are reduced pro-rata;
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 – Commenced 8 September 2008 and resigned 23 September 2013
Base salary (excluding superannuation, allowances and other benefits) as at 23 September 2013 of $399,094 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 120 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.
A Sutton – Chief Executive
Term of agreement – Open, commenced 23 September 2013
Base salary (excluding superannuation, allowances and other benefits) as at 23 September 2013 of $380,000 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 2013 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. Mr Thibeault commenced employment with the Company in July 2009 but entered into a
new service agreement on 1 December 2012.
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 2013 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 2013 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.
66
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued) 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 2013 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.
67
Energy Resources of Australia Ltd Financial Report 2013 F
Share based compensation
Rio Tinto Share Option Plan
In 2013 the Rio Tinto Share Option Plan was discountinued. No options were granted in 2013. Details of the costs of the share based
payment plans applied by the Company are provided at Note 32 of the Financial Statements.
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
22/04/2004
9/03/2005
7/03/2006
17/03/2009
Rio Tinto plc
22/04/2004
9/03/2005
7/03/2006
17/03/2009
EXERCISE
PRICE
(PRE RIGHTS
ISSUE)
EXERCISE
PRICE
(POST RIGHTS
ISSUE)
VALUE PER
OPTION AT
GRANT DATE
VALUE PER
OPTION
POST RIGHTS
ISSUE
EXPIRY
DATE
22/04/2014
9/03/2015
7/03/2016
17/03/2019
22/04/2014
9/03/2015
7/03/2016
17/03/2019
$
34.41
47.04
71.06
49.56
£
13.29
18.26
27.11
20.01
$
18.30
30.93
54.95
33.45
£
10.98
15.09
22.40
16.53
$
6.17
8.93
17.09
13.36
£
2.81
4.09
7.40
6.62
$
6.18
8.93
17.09
13.36
£
2.33
3.38
6.11
8.29
EARLIEST
EXERCISE
DATE
22/04/2007
9/03/2008
7/03/2009
17/03/2012
22/04/2007
9/03/2008
7/03/2009
17/03/2012
68
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued) Rio Tinto Performance Share Plan
Share awards under the Rio Tinto Performance Share Plan (PSP) are granted at the discretion of the Rio Tinto Remuneration
Committee in line with Rio Tinto guidelines. In 2013 the PSP was revised, as a transitional provision 50 per cent potentially vest after
four years and 50 per cent potentially vest after five years. 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
22 March 2010
21 March 2011
19 March 2012
27 May 2013
27 May 2013
Rio Tinto plc
22 March 2010
21 March 2011
19 March 2012
MARKET PRICE AT AWARD
PERFORMANCE PERIOD
ENDS*
MARKET PRICE AT
31 DECEMBER 2013
$75.03
$81.00
$65.85
$53.11
$53.11
£37.30
£40.58
£36.14
31 December 2013
31 December 2014
31 December 2015
31 December 2016
31 December 2017
31 December 2013
31 December 2014
31 December 2015
$68.18
$68.18
$68.18
$68.18
$68.18
£34.10
£34.10
£34.10
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 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 (MSP) 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:
MARKET PRICE
AT AWARD
PERFORMANCE PERIOD
ENDS*
PRICE AT
31 DECEMBER 2013
AWARD DATE
Rio Tinto Limited
22 March 2010
21 March 2011
19 March 2012
27 May 2013
Rio Tinto plc
22 March 2010
21 March 2011
19 March 2012
$75.03
$81.00
$65.85
$53.11
£37.30
£40.58
£36.14
31 December 2012
31 December 2013
31 December 2014
31 December 2015
31 December 2012
31 December 2013
31 December 2014
Note * Vesting dependent upon continued employment with a Rio Tinto Group company.
$68.18
$68.18
$68.18
$68.18
£34.10
£34.10
£34.10
69
Energy Resources of Australia Ltd Financial Report 2013 Rio Tinto Bonus Deferral Plan
Share awards under the Rio Tinto Bonus Deferral 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 shares affecting remuneration in this or future
reporting periods are as follows:
AWARD DATE
Rio Tinto Limited
BONUS DEFERRAL PLAN
21 March 2011
19 March 2012
27 May 2013
MARKET PRICE AT AWARD
VESTING DATE*
PRICE AT
31 DECEMBER 2013
$81.00
$65.85
$53.11
100% 1 December 2013
100% 1 December 2014
100% 1 December 2015
$68.18
$68.18
$68.18
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 2013 are set out below:
P Taylor
T Eckersley
A Tietzel
2009 Rio Tinto Limited scheme commencing 1 January 2010
2010 Rio Tinto Limited scheme commencing 1 January 2011
2008 Rio Tinto Limited scheme commencing 1 January 2009
70
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued) 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 JOINING1
BALANCE AT END
OF THE YEAR2
GRANTED
AS REMUN-
ERATION
EXERCISED
DURING THE
YEAR
OTHER
CHANGES2
VESTED &
EXER-
CISABLE
UN–VESTED
Rio Tinto plc
Key management personnel
S Thibeault
D Janney
Rio Tinto Limited
Executive directors
R Atkinson
A Sutton1
2013
2012
2012
2013
2012
2013
Key management personnel
G Sinclair
A Tietzel
C Tziolis
2013
2012
2013
2012
2012
1,186
1,186
2,033
2,168
2,168
2,888
-
760
4,495
4,495
396
Non-executive directors3
P Taylor
M Coulter
2013
2012
2012
12,987
15,407
11,268
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
760
-
-
-
(3,619)
(2,420)
(2,259)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,186
1,186
2,033
2,168
2,168
2,888
-
-
4,495
4,495
396
9,368
12,987
9,009
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Note 1
Note 2
Note 3
Where a KMP joined during the year, balance at start of the year reflects holdings at time of commencement with ERA.
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.
Changes to balances for non-executive Directors do not relate to remuneration for services provided to the Company.
71
Energy Resources of Australia Ltd Financial Report 2013 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 JOINING1
GRANTED
AS REMU-
NERATION VESTED LAPSED
AWARDS
CAN-
CELLED
OTHER
CHANGES2
BALANCE
AT END
OF YEAR3
Rio Tinto plc
Key management personnel
S Thibeault
Rio Tinto Limited
Executive directors
R Atkinson
A Sutton
Key management personnel
S Thibeault
T Eckersley
G Sinclair
A Tietzel
C Tziolis
P Eaglen
Non-executive directors3
P Taylor
H Newell
M Coulter
2013
2012
2013
2012
2013
2013
2012
2013
2012
2013
2012
2013
2012
2012
2012
2013
2012
2013
2012
2012
3.523
5,440
85
79
(1,569)
(1,996)
-
-
-
-
-
-
-
-
-
-
-
-
-
11,236
(2,310)
5,001
(2,828)
-
1,506
1,339
2,322
-
1,125
1,030
-
-
-
(702)
-
(849)
(989)
2,621
(1,365)
1,619
(1,591)
960
(516)
(834)
-
-
-
-
-
-
-
(1,786)
(2,617)
-
-
(1,601)
-
-
-
-
-
-
13,881
11,708
8,953
1,339
-
3,176
3,176
3,300
3,259
5,242
5,214
2,270
1,869
11,067
9,802
6,296
6,296
13,235
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,039
3,523
22,807
13,881
8,953
2,845
1,339
4,796
3,176
3,576
3,300
6,498
5,242
1,880
1,869
4,645
3,882
7,186
13,926
11,067
13,482
-
6,296
4,674
16,308
Note 1
Note 2
Note 3
Where a KMP joined during the year, balance at start of the year reflects holdings at time of commencement with ERA.
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.
Changes to balances for non-executive Directors do not relate to remuneration for services provided to the Company.
72
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued) Shareholdings
The number of shares held in ERA or Rio Tinto Limited during the financial year by each Director of ERA are set out below.
Energy Resources of Australia Ltd
BALANCE
AT START OF
THE YEAR1
RECEIVED
DURING THE
YEAR
P McMahon
R Atkinson
H Newell
Rio Tinto Limited
P McMahon
D Klingner
P Taylor
J Pegler
R Atkinson
A Sutton
M Coulter
2013
2013
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
-
-
161
161
18,405
18,405
29,787
29,787
23,528
18,491
6,331
6,331
888
888
8,895
908
-
-
-
-
-
-
-
-
5,405
5,037
-
-
2,001
2,828
-
3,860
OTHER
CHANGES
DURING
THE YEAR
42,500
22,958
-
-
-
-
-
-
(812)
-
-
-
(2,001)
(2,828)
-
(2,458)
BALANCE
AT END OF
THE YEAR2
42,500
22,958
161
161
18,405
18,405
29,787
29,787
28,121
23,528
6,331
6,331
888
888
8,895
2,310
Note 1
Note 2
Where a Director was appointed during the year, balance reflects holdings at the time of commencement with the Company.
Where a Director resigned during the year, balance reflects holdings at time of resignation as a Director of the Company.
G
Additional information
Further details relating to options
Value of options exercised during the year
G Sinclair
2013
2012
VALUE OF
OPTIONS
EXERCISED
DURING THE
YEAR
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.
73
Energy Resources of Australia Ltd Financial Report 2013 Principal activities
The principal activities of the consolidated entity during the
course of the year consisted of the mining, processing and sale
of uranium oxide.
Dividends
No dividends have been paid by ERA to members in respect of
the 2013 financial year.
Operating and financial review
Details of ERA’s review and results of operations are included in
the Chairman’s Report on page 4, the Chief Executive’s Report
on page 6 and the Operating and Financial Review section on
page 9.
Significant changes to the state of affairs
In the opinion of the Directors, other than matters reported in
the Directors’ Report, the Chairman’s Report and the Chief
Executive’s Report, there were no significant changes in the state
of affairs of the consolidated entity during the year ended 31
December 2013.
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)
(ii)
(iii)
the operations of the consolidated entity;
the results of those operations; or
the state of affairs of the consolidated entity subsequent
to the financial year ended 31 December 2013.
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 financial statements.
A general review of developments for ERA is presented in the
Operating and Financial Review section on page 9.
Annual General Meeting
The 2014 Annual General Meeting will be held on 9 April 2014 in
Darwin, in the Northern Territory of Australia. Notices of the 2014
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 Company Secretaries of the Company, and all
former Directors and Company 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, Company 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 Environment (formerly the
Department of Sustainability, Environment, Water, Population and
Communities); the Northern Land Council; the Commonwealth
Department of Industry (formerly the Department of Resources,
Energy & Tourism) and the Gundjeihmi Aboriginal Corporation
(representatives of the Mirarr Traditional Owners).
74
Energy Resources of Australia Ltd Financial Report 2013Directors’ Report (continued)
The Supervising Scientist Division confirmed in its most recent
report, relating to the operating year to 30 June 2013, 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 2013.
Further details of ERA’s environmental performance are included
in the “Environment” section of the Annual Report on page 33.
Corporate governance
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
developed by the Australian Securities Exchange 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 on pages 77 to 81.
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. 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.
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.
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.
AUDIT SERVICES
PricewaterhouseCoopers
Audit and review of financial reports
Total Remuneration for audit
services
Taxation services
Non-audit services
Total Remuneration
2013
$000
2012
$000
230
230
-
-
361
361
-
-
230
361
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 76.
Signed at Brisbane this 7 February 2014 in accordance with a
resolution of the Directors.
Non audit services
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.
P McMahon
Director
Brisbane
7 February 2014
Details of the amount paid or payable to the auditors for audit
services are set out below.
75
Energy Resources of Australia Ltd Financial Report 2013 Auditor’s Independence
Declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Energy Resources of Australia Ltd for the year ended 31 December
2013, I declare that to the best of my knowledge and belief, there have been:
a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Auditor’s Independence Declaration
b)
As lead auditor for the audit of Energy Resources of Australia Ltd for the year ended 31 December
This declaration is in respect of Energy Resources of Australia Ltd and the entities it controlled during
2013, I declare that to the best of my knowledge and belief, there have been:
the period.
a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Energy Resources of Australia Ltd and the entities it controlled during
the period.
John O'Donoghue
Partner
PricewaterhouseCoopers
7 February 2014
John O'Donoghue
Partner
PricewaterhouseCoopers
7 February 2014
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place, Level 19, 2 Southbank Blvd, SOUTHBANK VICTORIA 3006, Australia
T +61 3 8603 1000, F +61 3 8613 5555, www.pwc.com
Liability limited by a scheme approved under Professional Standards Legislation
76
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place, Level 19, 2 Southbank Blvd, SOUTHBANK VICTORIA 3006, Australia
T +61 3 8603 1000, F +61 3 8613 5555, www.pwc.com
Liability limited by a scheme approved under Professional Standards Legislation
Energy Resources of Australia Ltd Financial Report 2013 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)
(b)
(c)
(d)
(e)
confirming the appointment and removal of a Chief
Executive proposed by Rio Tinto and the terms and
conditions of the Chief Executive’s employment;
appointment and removal of a Company Secretary;
appointment of the Chair of the Board and members of
Board Committees;
any matters set out in the Schedule of Matters
Reserved for Decision or Consideration by the Board;
and
approval, subject to the Constitution, the Corporations
Act 2001 and the ASX Listing Rules, of each of the
following:
(i)
(ii)
(iii)
(v)
(vi)
(vii)
(viii)
(ix)
the Issue of new shares or other securities in
the Company;
incurring of debt (other than trade creditors
incurred in the normal course of business)
capital expenditure in excess of $5,000,000;
the acquisition, divestment or establishment of
any significant business assets;
changes to the discretions delegated from the
Board;
the annual operating budgets plan;
changes to the capital and operating approval
limits of senior management; and
the annual report and interim and preliminary
final reports.
Composition
From 1 January 2013 to 8 February 2013, the Board of ERA
consisted of seven Directors, six of whom were non-executive.
During this time Dr Klingner was the Chairman and an
independent, non-executive Director. Dr Garnett, Mr McMahon
and Mr Pegler served as independent non-executive Directors.
Mr Taylor and Mrs Newell, who are current executives of Rio
Tinto, also served as non-executive Directors. Mr Atkinson was
an executive Director and held the position of Chief Executive
until 23 September 2013.
On 8 February 2013, the number of Directors was reduced to six
with the resignation of Dr Klingner as a Director. Mr McMahon
was elected as Chairman of the Board on 8 February 2013.
On 23 September 2013, Mr Atkinson resigned as a Director and
Chief Executive. Ms Sutton was elected as a Director and Chief
Executive of ERA on 23 September 2013.
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 50 to 51. 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,
77
Energy Resources of Australia Ltd Financial Report 2013
Corporate Governance Statement (continued)
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.
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 5 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).
•
•
•
•
•
78
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) had 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 previously an executive of
Rio Tinto, however, a sufficient period of time (three years) had
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 8 February 2013 to 31 December 2013, 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, Mr McMahon, is an independent non-executive
Director. Mr McMahon’s other appointments are set out on page
50. The Board considers that none of his other commitments
interfere with the discharge of his duties to ERA.
The Chief Executive is Ms Sutton, 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 and four extraordinary
meetings during 2013. In addition, there were 13 meetings held
in 2013 of subcommittees established by the Board. The Board
meeting attendance details for Directors in 2013 are set out on
page 54.
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;
Energy Resources of Australia Ltd Financial Report 2013 (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 and Company
Secretaries. 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 next performance self assessment will be conducted in 2014.
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-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 2013 Annual General
Meeting, shareholders approved the 2012 Remuneration Report
with 89.32 per cent of shareholders who cast a vote, voting in
favour.
In 2012, the Board established a Remuneration Committee. At 31
December 2013, the Remuneration Committee comprised three
non-executive independent Directors, being Mr Pegler (Chair),
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.
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
55 of the Remuneration Report. 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 2013 comprised three non-executive independent
Directors. Two Directors constitute a quorum. The present
members of the Audit and Risk Committee are Dr Garnett (Chair),
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 2013. Attendance details of the 2013 meetings of the
Audit and Risk Committee, and the qualifications and experience
of the members, are set out in the Directors’ Report on pages 50
and 51 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 2013 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 2013
are outlined on page 75.
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
79
Energy Resources of Australia Ltd Financial Report 2013 Corporate Governance Statement (continued)
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:
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.
OBJECTIVE
OUTCOME
Women to represent 20 per
cent of the management
(being manager level and
above) and the Board by
2015.
Target of 33 per cent
Indigenous people and 25 per
cent female participation in
new apprenticeships by 2014.
As at 31 December 2013 female
participation at manager, general
manager and Board level is
10 per cent. Women comprise
50 per cent of Directors. Total
female participation is 18 per
cent.
As at 31 December 2013, ERA
has 18 full time apprentices,
9 of whom are Indigenous (50
percent). In addition, ERA has
six school based apprentices.
Target Indigenous
employment of 20 per cent by
the end of 2013.
ERA ended 2013 with an
Indigenous employment rate of
16 per cent.
•
As at 31 December 2013, the proportion of women employed by
ERA was as follows:
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 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.
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 ERA securities. In regard
to his own dealings, the Chairman is required to notify the
Chair of the Audit and Risk Committee.
No dealings in ERA securities 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.
Board of directors
Executive committee
and managers
Company
50%
4%
18%
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.
Particulars of the interests held by Directors are outlined on page
54 of the Remuneration Report.
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 process covering all of
ERA’s material business risks.
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. The Board
has in place a number of systems to identify and manage
business risks.
80
Energy Resources of Australia Ltd Financial Report 2013 These include:
•
•
•
•
•
•
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 2013, 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 2016; exploration and the potential
development of the Ranger 3 Deeps resource; stakeholder
support of the Company’s strategic initiatives; rehabilitation of
the Ranger Project Area; and internal controls relating to the
Company’s license to operate.
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 emissions and impact
of climatic conditions.
The Chief Executive and Chief Financial Officer give statements,
in writing, to the Board regarding the financial 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. From 2013, all General Managers of the
Company make a declaration that they:
•
understand the key requirements of each business integrity
element of the Rio Tinto’s The Way We Work; and
have engaged with their direct reports to:
•
- promote awareness of the business integrity values; and
- ensure compliance with the Company’s expectations
around each value.
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. 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.
81
Energy Resources of Australia Ltd Financial Report 2013 Consolidated Statement of
Comprehensive Income
For the year ended 31 December 2013
Revenue from continuing operations
Changes in inventories
Purchased materials (uranium oxide)
Materials and consumables used
Employee benefits and contractor expenses
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
13
4
4
5
CONSOLIDATED
2013
$’000
370,144
14,140
2012
$’000
422,849
108,169
-
(55,595)
(88,459)
(128,851)
(172,512)
(212,415)
(18,407)
(10,371)
(20,639)
(7,228)
(232,169)
(243,651)
-
(32,402)
(10,761)
(5,744)
(68,044)
(29,465)
(14,869)
(5,046)
(186,541)
(254,785)
50,712
36,026
(135,829)
(218,759)
-
–
(135,829)
(218,759)
(135,829)
(218,759)
(135,829)
(218,759)
28
28
(26.2)
(26.2)
(42.3)
(42.3)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
82
Energy Resources of Australia Ltd Financial Report 2013
Consolidated Balance Sheet
As at 31 December 2013
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
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
Accumulated lossess
Total equity
The above balance sheet should be read in conjunction with the accompanying notes.
CONSOLIDATED
NOTES
2013
$’000
2012
$’000
7
8
9
10
11
12
13
14
15
16
17
18
19
20
20
357,208
467,345
20,107
42,154
248,522
208,374
2,305
516
628,142
718,389
112,584
203,632
530,346
88,897
63,960
137,884
203,632
666,167
38,155
62,048
999,419
1,107,886
1,627,561
1,826,275
72,512
91,223
100,242
78,005
163,735
178,247
529,804
529,804
693,539
578,409
578,409
756,656
934,022
1,069,619
706,485
390,533
706,485
390,301
(162,996)
(27,167)
934,022
1,069,619
83
Energy Resources of Australia Ltd Financial Report 2013 Consolidated Statement of
Changes in Equity
For the year ended 31 December 2013
CONSOLIDATED
Balance at 1 January 2012
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
20
Balance at 31 December 2012
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
20
CONTRIBUTED
EQUITY
$’000
RESERVES
$’000
RETAINED
EARNINGS
$’000
NOTES
TOTAL
$’000
706,485
390,459
191,592
1,288,536
-
-
-
-
-
-
-
-
(218,759)
(218,759)
-
-
(218,759)
(218,759)
(158)
(158)
-
-
(158)
(158)
706,485
390,301
(27,167)
1,069,619
-
-
-
-
-
-
-
-
232
232
(135,829)
(135,829)
-
-
(135,829)
(135,829)
-
-
232
232
Balance at 31 December 2013
706,485
390,533
(162,996)
934,022
The above statement of changes in equity should be read in conjunction with the accompanying notes.
84
Energy Resources of Australia Ltd Financial Report 2013
Consolidated Cash Flow
Statement
For the year ended 31 December 2013
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 and evaluation
Payments for rehabilitation
Interest received
Financing costs paid
Income taxes (paid)/refunded
CONSOLIDATED
2013
$’000
2012
$’000
NOTES
406,432
449,582
(294,468)
(398,873)
111,964
(66,186)
(73,327)
11,161
(1,465)
(29)
50,709
(48,645)
(28,293)
22,428
(3,211)
3,688
(3,324)
Net cash (outflow)/inflow from operating activities
27
(17,882)
CASH FLOW 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 FLOW FROM FINANCING ACTIVITIES
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
(91,133)
(160,750)
-
29
(91,133)
(160,721)
(1,106)
(1,106)
(1,196)
(1,196)
(110,121)
(165,241)
467,345
632,584
(16)
2
Cash and cash equivalents at end of year
7
357,208
467,345
The above cash flow statement should be read in conjunction with the accompanying notes.
85
Energy Resources of Australia Ltd Financial Report 2013
Notes to the Consolidated
Financial Statements
1 Summary of significant
accounting policies
The principal accounting policies adopted in the preparation
of these 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.
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.
(iii) Critical accounting estimates
The presentation of financial statements requires the use of cer-
tain 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 judge-
ment or complexity, or areas where assumptions and estimates
are significant to the financial statements are disclosed in Note 2.
(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.
(b) Principles of consolidation
(i) Subsidiaries
On 11 September 2013, ERA’s only subsidiary EWL Science Pty
Ltd was deregistered. ERA has no other subsidiaries.
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.
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 2013 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.
86
(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.
Energy Resources of Australia Ltd Financial Report 2013
(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.
(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 per cent 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
statement of comprehensive income 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.
87
Energy Resources of Australia Ltd Financial Report 2013 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).
Assets or liabilities arising with the tax consolidated entities
are recognised as amounts receivable from or payable to other
entities in the Group.
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.
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.
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 entity has
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.
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.
(h) Trade and other receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised 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.
88
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) 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.
(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)
(b)
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
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
Brine Concentrator - seven 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 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.
89
Energy Resources of Australia Ltd Financial Report 2013
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.
(m) Goods and Services Tax (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.
(p) Derivatives
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-
90
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) accumulating sick leave are recognised when the leave is taken
and measured at the rates paid or payable.
(t) Contributed equity
Ordinary shares are classified as equity.
(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 one member
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.
(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 redundancy. 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.
(s) Cash and cash equivalents
For the purposes of the statement of cash flows, cash
includes cash on hand and deposits held at call, net of any
bank overdrafts.
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 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.
(w) Share based payments
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
91
Energy Resources of Australia Ltd Financial Report 2013 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.
liabilities. The standard is not applicable until 1 January 2015 but
is available for early adoption. The derecognition rules have been
transferred from AASB 139 Financial Instruments: Recognition
and Measurement and have not been changed. There will be no
impact on the Group’s accounting for financial liabilities, as the
new requirements only affect the accounting for financial liabilities
that are designated at fair value through profit or loss and the
Group does not have any such liabilities.
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.
(ii) AASB 13 Fair Value Measurement and AASB 2011-8 Amend-
ments to Australian Accounting Standards arising from AASB 13
(effective 1 January 2013).
AASB 13 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 mea-
surement 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 the notes to the financial
statements. The Group will adopt the new standard from its
operative date, which means that it will 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 an impact on the entity in the current or
future reporting periods and in forecast transactions.
2
Critical accounting estimates
and judgements
(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.
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.
(z) New accounting standards and interpretations
Certain new accounting standards and interpretations have
been published that are not mandatory for 31 December 2013
reporting periods. The Group’s assessment of the impact of these
new standards and interpretations is set out below.
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.
(i) AASB 9 Financial Instruments, AASB 2009-11 Amendments
to Australian Accounting Standards arising from AASB 9, AASB
2010-7 Amendments to Australian Accounting Standards arising
from AASB 9 (December 2010) and AASB 2012-6 Amendments
to Australian Accounting Standards – Mandatory Effective Date
(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 establish an environment similar to adjacent
areas of Kakadu National Park.
of AASB 9 and Transition Disclosures (effective from 1 January
2015).
AASB 9 Financial Instruments addresses the classification,
measurement and derecognition of financial assets and financial
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.
92
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) A Prefeasibility Study was conducted during 2012 and
completed in early 2013. As a result of the study, the preferred
rehabilitation plan was modified for the year ended 31 December
2012. Following finalisation of the study in 2013, no material
modifications have been made to the rehabilitation plan. The
provision for rehabilitation represents the net present cost at 31
December 2013, based on current disturbance, of the preferred
plan within the requirements of the Ranger Project Area Authority.
The ultimate cost of rehabilitation is uncertain and can vary
in response to many 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.
A key sensitivity in estimating the rehabilitation provision is the
discount rate applied to the underlying cash flows. ERA has
maintained a real discount rate of 2.5 per cent.
(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. A key assumption is the approval and
development of Ranger 3 Deeps mine, should this not occur it is
unlikely tax assets would remain recoverable.
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 2012 (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 rates, asset carrying values
and provisions for rehabilitation. A full statement of ERA Ore
Reserves and Mineral Resources as at 31 December 2013 is on
pages 20 and 21.
(d) Asset carrying value
ERA has two cash generating units (CGU), the Ranger Project
Area (RPA) and the Jabiluka mineral lease. The Ranger CGU
includes all assets and liabilities related to activities on the RPA,
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 has considered a range of possible impairment indicators,
including the failure of Leach Tank No. 1 and market consensus
price and foreign exchange expectations.
On 7 December 2013, Leach Tank No. 1 at the ERA Ranger
processing plant failed causing a spill that was contained on site.
Processing operations were suspended and clean-up operations
commenced. ERA has commissioned a full investigation into
the incident.
On 9 December 2013, ERA received notifications from the
Northern Territory Department of Mines and Energy and the
Commonwealth Minister for Industry to suspend processing
operations at the Ranger Mine and not to recommence
without regulatory approval, including a requirement from the
Commonwealth to demonstrate the integrity of the Ranger
processing plant and that human safety and the surrounding
environment remains protected.
ERA has considered the implications of the incident with
respect to stakeholder concerns, environmental protection and
economic considerations. ERA considers that upon completion
of all investigations and any rectifications, processing will
recommence.
ERA’s financial modelling also includes the development of
Ranger 3 Deeps mine, which remains subject to ERA Board and
regulatory approvals, and which the Company has assigned a
high probability of development. Should development of Ranger 3
Deeps not occur, the Ranger CGU would face impairment.
Market consensus uranium price and exchange rate is
determined by surveying a sample of brokers and financial
institutions to gather their estimation of both the long term
uranium price and AUD exchange rate. In 2013, the results
of this survey have shown a softening of the uranium market
and continued strength of the Australian dollar; however the
magnitude of this is not significant enough to cause impairment,
when other factors such as sunk capital are considered.
When ERA assesses CGUs for recoverability, the Company
uses the greater of fair value less costs to sell or value in use.
Historically, ERA has used the fair value less costs to sell method
for the Ranger Project Area, 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
93
Energy Resources of Australia Ltd Financial Report 2013 prices, discount rate, exchange rates, rehabilitation, capital
and production costs in order to assist in the judgment of the
recoverable amount.
Estimates and judgement associated with the Jabiluka
undeveloped property are disclosed in Note 12.
(e) Inventory net realisable value
The calculation of net realisable value is sensitive to key
assumptions about the future including: uranium price, Australia/
US dollar exchange rate and where applicable costs to complete.
The sales price of uranium oxide is denominated in US dollars,
so fluctuations in the Australian/US dollar exchange rate will
affect the proceeds received from sales and consequently the
recoverable amount.
At 31 December 2013, a $21.3 million (pre-tax) adjustment was
made to finished goods inventory to record it at its net realisable
value. This was due to high non-cash costs and low December
2013 half year production, which drove the total unit cost of
inventory above the expected sales price. The net realisable
value adjustment has been included in ‘Changes in inventories’ in
the statement of comprehensive income.
94
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) 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
Total revenue from continuing operations
2013
$’000
2012
$’000
355,868
395,399
271
1,230
356,139
396,629
13,073
25,257
932
963
14,005
26,220
370,144
422,849
95
Energy Resources of Australia Ltd Financial Report 2013 NOTES
2013
$’000
2012
$’000
22
22
294,247
302,370
5,166
67,965
299,413
370,335
4,790
139,029
143,819
14,073
74,277
88,350
232,169
4,184
14,223
18,407
-
1,465
30,937
32,402
(91)
783
(146)
7,667
28,013
66,186
6,240
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
48,645
6,773
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 Indigenous 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/(gain)
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
96
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) 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% (2012 – 30%)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Impairment of non-current assets
R&D tax concession
Amortisation
Rehabilitation expenditure
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 (Note 14B)
2013
$’000
2012
$’000
-
-
(50,937)
(35,897)
225
(129)
(50,712)
(36,026)
(48,197)
(28,419)
(2,740)
(7,478)
(50,937)
(35,897)
(186,541)
(254,785)
(55,962)
(76,435)
-
(2,801)
22,283
(14,464)
7
225
20,413
(3,449)
29,161
(5,624)
37
(129)
(50,712)
(36,026)
(29)
34
Tax consolidation legislation
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).
97
Energy Resources of Australia Ltd Financial Report 2013 6 Dividends
Dividends paid or declared
No dividends have been paid or declared for the year ended 31 December 2013 (2012: nil).
Dividends franking account
Franking credits available for subsequent financial years
based on a tax rate of 30% (2012 – 30%)
2013
$’000
2012
$’000
234,095
234,095
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
2013
$’000
2012
$’000
3,294
353,914
357,208
1,361
465,984
467,345
Cash at bank/Deposits at call
Cash assets and deposits bear floating interest rates between 0.0 per cent and 3.3 per cent (2012 – 0.0 per cent and 4.3 per cent).
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
2013
$’000
2012
$’000
12,188
34,448
7,968
(49)
7,919
7,846
(140)
7,706
20,107
42,154
Impairment of receivables
No trade receivables are past due. There is no impairment of trade receivables.
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.
98
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued)
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 trade and other 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
Finished product U3O8 at net realisable value
Total current Inventory
2013
$’000
23,730
27,721
2,602
2012
$’000
23,021
35,852
4,531
-
144,970
194,469
248,522
-
208,374
Inventory expense
Obsolescence of inventory provided for and recognised as an expense during the year ended 31 December 2013 amounted to
$426,427 (2012: $284,677).
Write-downs of inventories to net realisable value recognised as an expense during the year ended 31 December 2013 amounted to
$21,331,679 (2012 – Nil). The expense has been included in ‘Changes in inventories’ in statement of comprehensive income.
10 Other assets
Prepayments
11 Inventories – non-current
Ore stockpiles at cost
2013
$’000
2,305
2012
$’000
516
2013
$’000
2012
$’000
112,584
137,884
99
Energy Resources of Australia Ltd Financial Report 2013
12 Undeveloped properties
Jabiluka: Long-term care and maintenance development project
Balance brought forward
Amount capitalised during the year
Total undeveloped properties
2013
$’000
2012
$’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 mineral 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 development and life of the ore body together with the term and continuity 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.
100
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) 13 Property, plant and equipment
CONSOLIDATED
MINE LAND AND
BUILDINGS
$’000
PLANT AND
EQUIPMENT
$’000
MINE
PROPERTIES
$’000
REHABILITATION
$’000
TOTAL
$’000
YEAR ENDED 31 DECEMBER 2013
Opening net book amount
14,699
Additions
Disposals
Change in estimate
Transfers
-
-
-
85
416,648
91,133
(783)
-
(85)
35,307
199,513
-
-
-
-
-
-
5,998
-
666,167
91,133
(783)
5,998
-
Depreciation/amortisation charge
(4,790)
(139,029)
(14,073)
(74,277)
(232,169)
Impairment charge
Closing net book amount
Cost
-
9,994
111,169
Accumulated depreciation/amortisation
(101,175)
Net book amount
YEAR ENDED 31 DECEMBER 2012
Opening net book amount
Additions
Disposals
Change in estimate
Transfers
9,994
20,584
-
-
-
-
-
367,884
1,139,046
(771,162)
367,884
377,204
160,750
(751)
-
-
Depreciation/amortisation charge
(5,885)
(120,555)
(20,009)
Impairment charge
Closing net book amount
Cost
Accumulated depreciation/amortisation
Net book amount
-
14,699
111,084
(96,385)
14,699
-
416,648
1,048,781
(632,133)
416,648
-
35,307
421,700
(386,393)
35,307
-
21,234
421,700
(400,466)
21,234
-
131,234
396,911
-
530,346
2,068,826
(265,677)
(1,538,480)
131,234
530,346
55,316
288,150
-
-
-
-
-
-
76,609
-
(97,202)
(68,044)
199,513
390,913
741,254
160,750
(751)
76,609
-
(243,651)
(68,044)
666,167
1,972,478
(191,400)
(1,306,311)
199,513
666,167
Assets under construction
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
2013
$’000
3,130
2012
$’000
182,519
101
Energy Resources of Australia Ltd Financial Report 2013 Impairment charge Ranger cash generating unit
No impairment charge has been recorded in 2013 (2012: $68,044,433).
In 2012, the lower long term uranium price and exchange rate assumptions adopted by the ERA Board and a continued increase
in cost to meet its rehabilitation obligations resulted in a reduction in the fair value of the Ranger CGU to the extent that a non cash
impairment of $68 million was recognised, using a 9.25 per cent discount rate.
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 was allocated completely to this component of property, plant and equipment.
102
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) 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
Other
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
Research and development tax offset
Property, plant and equipment
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)
(Under)/over provided in prior years credited to the income statement
Credited to equity (Note 5)
Closing balance at 31 December
2013
$’000
2012
$’000
-
19,188
23,405
39,639
858
122
9,845
18,615
23,405
33,558
752
-
83,212
86,175
(83,212)
(86,175)
-
-
86,175
(2,740)
(223)
83,212
93,722
(7,478)
(69)
86,175
70,944
25,003
914
36,776
13,797
-
67,683
65,936
4,407
2,092
4,765
1,300
171,043
122,574
1,438
(372)
2,157
(401)
172,109
124,330
(83,212)
(86,175)
88,897
38,155
124,330
48,197
(447)
29
95,876
28,419
69
(34)
172,109
124,330
103
Energy Resources of Australia Ltd Financial Report 2013 15 Investment in trust fund
NON-CURRENT
Trust Fund
2013
$’000
2012
$’000
63,960
62,048
Trust fund
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 2013 was 3.70 per cent (2012: 4.78 per cent).
16 Payables
CURRENT
Trade payables
Amounts due to related parties
Other payables
Total payables
17 Provisions – current
CURRENT
Employee benefits
Leach tank remediation
Rehabilitation
Total current provisions
2013
$’000
2012
$’000
66,271
4,433
1,808
90,242
8,000
2,000
72,512
100,242
2013
$’000
2012
$’000
11,535
1,300
78,388
91,223
11,778
-
66,227
78,005
Leach tank remediation
Following the collapse of Leach Tank No. 1 on 7 December 2013, a provision for $1,300,000 has been raised to cover the remaining
investigation and deconstruction costs. These costs are expected to be incurred early in 2014.
Movements in provisions
Movements in the rehabilitation provision during the financial year is set out below:
CONSOLIDATED – 2013
Carrying amount at the start of the year
Payments
Transfer from non-current provision
Carrying amount at the end of the year
104
REHABILITATION
$’000
66,227
(73,327)
85,488
78,388
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued)
CONSOLIDATED – 2012
Carrying amount at the start of the year
Payments
Transfer from non-current provision
Carrying amount at the end of the year
18 Provisions – non-current
NON-CURRENT
Employee benefits
Rehabilitation
Carrying amount at the end of the year
Movements in provisions
Movements in the rehabilitation provision during the financial year is set out below:
CONSOLIDATED – 2013
Carrying amount at the start of the year
Change in estimate
Unwinding of discount
Additional provisions recognised
Transfer to current provision
Carrying amount at the end of the year
CONSOLIDATED – 2012
Carrying amount at the start of the year
Change in estimate
Change in discount rate
Unwinding of discount
Additional provisions recognised
Transfer to current provision
Carrying amount at the end of the year
REHABILITATION
$’000
25,128
(28,293)
69,392
66,227
2013
$’000
2012
$’000
4,728
525,076
529,804
4,780
573,629
578,409
REHABILITATION
$’000
573,629
127
30,937
5,871
(85,488)
525,076
REHABILITATION
$’000
540,157
22,355
19,296
26,255
34,969
(69,392)
573,629
105
Energy Resources of Australia Ltd Financial Report 2013 19 Share capital
SHARE CAPITAL
A Class shares fully paid
Total contributed equity
2013
SHARES
2012
SHARES
517,725,062
517,725,062
2013
$’000
706,485
706,485
2012
$’000
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.
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
2013
$’000
2012
$’000
1,033
389,500
390,533
801
389,500
390,301
801
232
1,033
959
(158)
801
389,500
389,500
-
-
389,500
389,500
(27,167)
191,592
(135,829)
(218,759)
-
-
(162,996)
(27,167)
Nature and purpose of reserves
The share based payments reserve is used to recognise the fair value of equity instruments issued to employees but not exercised.
106
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) 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.
21 Contingencies
Contingent liabilities
Legal actions against the Company.
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 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
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
2013
$’000
2012
$’000
83,242
95,337
2013
$’000
2012
$’000
2,882
4,928
7,810
3,468
4,375
7,843
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.
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
2013
$’000
138
554
784
1,476
In order to maintain current rights of tenure to mining tenements, the consolidated entity will be required to outlay an amount of
$138,439 in the year ending 31 December 2014 in respect of tenement lease rentals.
2012
$’000
73
291
485
849
107
Energy Resources of Australia Ltd Financial Report 2013
ERA is liable to make payments to the Commonwealth as listed below:
(i)
(ii)
(iii)
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 (NT) Act 1976 for rent for the duration of the agreement. This amounts to $932,900 per
annum for 2014 and is indexed for future years.
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 of
Ranger net sales revenue until 30 June 2012. On execution of a suit of agreements between ERA, the Commonwealth and
the Northern Land Council a revised rate of 2.5 per cent of Ranger net sales revenue was payable to the Commonwealth
from 1 July 2012 and 1.75 per cent of Ranger net sales revenue payable to the Northern Land Council or an entity
representing the Mirarr Traditional Owners as directed by the Northern Land Council (amounts paid during 2013:
$14,223,368. 2012: $15,948,383).
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 2013: $4,183,344. 2012: $4,690,701).
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)
(ii)
Up front payment of $3,400,000 on the commencement of production at Jabiluka.
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 Traditional 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
2013
$’000
2012
$’000
230
-
230
361
-
361
108
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued)
24 Related parties
Directors
The names of persons who were Directors of ERA at any time during the financial period are as follows:
P McMahon, D Klingner (resigned 8 February 2013), H Garnett, A Sutton (appointed 23 September 2013), R Atkinson (resigned
23 September 2013), P Taylor, J Pegler and H Newell.
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
2013
$’000
3,382
363
574
2012
$’000
4,376
368
664
4,319
5,408
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 55 to 73.
Loans with Directors and key management personnel
There were no loans with Directors or key management personnel during 2013 (2012: nil).
Transactions with Directors and Director-related entities
There were no transactions with Director related entities other than Rio Tinto Limited during 2013 (2012: Nil). Details of transactions
with Rio Tinto Limited are outlined below.
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.
109
Energy Resources of Australia Ltd Financial Report 2013 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 reimbursements 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
2013
$’000
2012
$’000
1,600
1,600
12,787
11,800
14,669
46,528
49,774
2,925
1,855
12,827
-
-
-
-
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 (2013: $Nil and 2012:
$28,461,857).
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 received from and payable to each class of other related parties at balance
date were as follows:
2013
$’000
2012
$’000
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
87,060
206,527
2,992
94
4,433
8,000
All related party transactions were conducted on arm’s length terms and conditions and at market rates.
110
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued)
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
EQUITY HOLDING
2013 %
2012 %
-
100
The above controlled entity was wholly-owned and no dividends were paid to the parent entity (2012: $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. EWL Sciences Pty Ltd was subsequently deregistered on 11 September 2013.
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 2013, 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:
Revenue from external customers
Other revenue
Total segment revenue
Segment result
Income tax benefit
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
2013
$’000
2012
$’000
356,139
396,629
14,005
26,220
370,144
422,849
(186,541)
(254,785)
50,712
36,026
(135,829)
(218,759)
1,627,561
1,826,275
1,627,561
1,826,275
693,539
693,539
91,133
232,169
783
756,656
756,656
160,750
243,651
722
111
Energy Resources of Australia Ltd Financial Report 2013
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
Total revenue
SEGMENT REVENUES
FROM SALES TO
EXTERNAL CUSTOMERS
2013
$’000
2012
$’000
63,044
58,894
227,215
291,984
65,609
44,521
355,868
395,399
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 2013 are in Australia with the exception of inventories in transit or at
converters of $69,727,008 (2012 – $55,973,835). 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 2013.
112
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) 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
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
(Increase)/decrease in other assets
(Increase)/decrease in investment in trust fund
(Decrease)/increase in payables
(Decrease)/increase in current tax liabilities
(Increase)/decrease in net provision for deferred tax assets
(Decrease)/increase in provisions
Net cash inflow/(outflow) provided from operating activities
28 Earnings per share
Basic earnings per share
Diluted earnings per share
2013
$’000
2012
$’000
(135,829)
(218,759)
783
722
232,169
243,651
-
30,937
1,338
16
68,044
26,255
1,037
(2)
22,047
25,046
(14,848)
(107,408)
(1,789)
(1,912)
(27,730)
-
(50,742)
(72,322)
(17,882)
(135)
(2,829)
20,004
3,698
(36,001)
(26,647)
(3,324)
2013
CENTS
(26.2)
(26.2)
2012
CENTS
(42.3)
(42.3)
Earnings used in the calculation of basic and diluted earnings per share: 2013: $(135,828,888) (2012: $(218,758,940))
Weighted average number of ordinary shares on issue used in calculation of basic earnings per share: 2013: 517,725,062 shares
(2012: 517,725,062).
Options
Options granted to employees under the share-based payment plans are for options in Rio Tinto plc and Rio Tinto Limited. 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.
113
Energy Resources of Australia Ltd Financial Report 2013
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 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 not Group policy to hedge against foreign exchange risk.
The Group’s exposure to foreign currency risk at the reporting date was as follows:
Trade receivables
Trade payables
2013
USD
$’000
10,873
283
2012
USD
$’000
35,738
896
Group sensitivity
At 31 December 2013, had the Australian Dollar weakened/strengthened by 10 per cent 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 $853,185 higher/lower (2012:
$2,399,099 higher/lower).
At 31 December 2013, had the Australian Dollar weakened/strengthened by 10 per cent 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 $20,634 higher/lower (2012: $58,624
higher/lower).
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.
114
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) TRADE RECEIVABLES
AA
A
BBB
Other
2013
$’000
2012
$’000
-
-
-
-
12,188
34,448
-
-
Liquidity and capital risk
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.
The Group currently has no debt and $357,207,723 of cash on hand or at call (Note 7). No debt covenants exist.
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.
115
Energy Resources of Australia Ltd Financial Report 2013 30 Parent entity financial information
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
2013
$’000
2012
$’000
628,142
718,389
1,627,561
1,826,275
163,735
693,539
178,248
756,656
706,485
706,485
389,500
389,500
1,033
801
(162,996)
(27,167)
(135,829)
(218,759)
(135,829)
(218,759)
(i)
(ii)
No guarantees have been provided by the parent entity.
The commitments for the parent entity are consistent with those reported in Note 22 for the consolidated entity.
31 Events occuring after the reporting period
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.
116
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) 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 Payment’, 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
The Performance Share Plan (PSP) was revised in 2013 with details listed in the Remuneration Report.
The fair value awards granted under the PSP have been calculated at their dates of grant using a Monte Carlo valuation model
which takes into account the Total Shareholder Returns (TSR) performance conditions. No forfeitures are assumed. 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 2013, 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 – 2013
Rio Tinto Limited
14,536
9,613
(12,306)
Weighted average fair value
at grant date
Rio Tinto plc
Weighted average fair
value at grant date
CONSOLIDATED - 2012
$62.99
$34.52
$50.90
979
£34.25
-
-
-
-
Rio Tinto Limited
9,972
4,079
561
Weighted average fair value
at grant date
Rio Tinto plc
Weighted average fair value
at grant date
$70.91
2,899
$44.79
727
$52.08
(2,647)
£34.31
£34.46
£34.38
-
-
-
-
-
-
-
-
-
-
-
-
11,843
3,300
$52.36
$75.81
979
574
£34.25
£36.35
(76)
14,536
$44.79
$62.99
-
-
979
£34.25
-
-
-
-
The weighted average share price at the date of exercise of rights to shares exercised during the year ended 31 December 2013 was
Nil (no shares were exercised) (2012: Nil).
The weighted average remaining contractual life of rights to shares outstanding at the end of the period was 3 years (2012: 2 years).
Where shares 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.
117
Energy Resources of Australia Ltd Financial Report 2013 Share Option Plan
The Share Option Plan was discontinued in 2013 and as such no awards were made. 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. Expected volatilities are based on the historical volatility of Rio Tinto’s share return.
A summary of the status of options granted under the plan at 31 December 2013, 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
EXERCIS-
ABLE
AT END OF
THE YEAR
CONSOLIDATED – 2013
Rio Tinto Limited
Weighted average
exercise price
Rio Tinto plc
Weighted average
exercise price
CONSOLIDATED - 2012
Rio Tinto Limited
Weighted average
exercise price
Rio Tinto plc
Weighted average
exercise price
10,789
$40.01
1,186
£16.53
17,402
$33.67
3,219
£16.53
-
-
-
-
-
-
-
-
324
(3,730)
$40.81
$41.70
-
-
-
-
(2,033)
£16.53
-
-
(6,613)
$23.33
-
-
-
-
-
-
-
-
-
-
7,383
7,383
$43.90
$43.90
1,186
1,186
£16.53
£16.53
10,789
10,789
$40.01
$40.01
1,186
1,186
£16.53
£16.53
The weighted average share price at the date of exercise of options exercised during the year ended 31 December 2013 was $65.21
(2012: $67.53).
The weighted average remaining contractual life of share options outstanding at the end of the period was 0 years (2012: 0 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.
118
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) Share Savings Plan
The Share Savings Plan was replaced with the MyShare Savings Plan in 2013, and as such no awards were made. 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 2013, and changes during the year, is presented below:
BALANCE
AT START
OF THE
YEAR
38,446
$54.55
51,255
$55.08
CONSOLIDATED – 2013
Rio Tinto Limited
Weighted average
exercise price
CONSOLIDATED - 2012
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
-
-
-
-
(1,355)
(9,082)
(7,664)
20,345
3,434
$54.40
$48.73
$61.25
$54.62
$59.26
(2,003)
(1,221)
(9,585)
38,446
13,435
$59.28
$58.34
$55.91
$54.55
$53.64
The weighted average share price at the date of exercise of conditional grants of shares exercised during the year ended
31 December 2013 was $60.85 (2012: $68.39).
The weighted average remaining contractual life of share options outstanding at the end of the period was 1 year (2012: 2 years).
Where shares 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.
MyShare Savings Plan
The MyShare plan was introduced to all eligible staff members in 2013 and is described in the Remuneration Report. Awards under
these plans are settled in equity and accounted for accordingly. The fair value of each award on the day of grant is set equal to the
share price on the day of grant.
A summary of the status of options granted under the plan at 31 December 2013, 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 – 2013
Rio Tinto Limited
Weighted average
exercise price
-
-
6,305
$56.41
-
-
-
-
(51)
6,254
$59.06
$56.39
-
-
The weighted average share price at the date of exercise of conditional grants of shares exercised regularly during the year ended 31
December 2013 was Nil.
The weighted average remaining contractual life of share options outstanding at the end of the period was 2 years.
Where shares 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.
119
Energy Resources of Australia Ltd Financial Report 2013 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. No forfeitures were assumed. A summary of the status of shares granted under the share
plan at 31 December 2013, 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 – 2013
Rio Tinto Limited
14,939
8,048
(2,069)
(4,917)
Weighted average fair value
at grant date
Rio Tinto plc
Weighted average fair
value at grant date
CONSOLIDATED - 2012
$71.01
2,544
$53.72
$63.45
85
£38.67
£37.30
$75.03
(1,569)
£37.30
-
-
-
-
-
-
16,001
$61.68
1,060
£40.58
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
$67.21
10,431
$58.83
1,505
$58.19
(4,413)
$52.01
(4,979)
£30.02
£35.62
£37.75
£19.82
$67.00
-
-
$71.01
2,544
£38.67
-
-
-
-
-
-
-
-
The weighted average share price at the date of exercise of conditional grants of shares exercised regularly during the year ended 31
December 2013 was $68.07 (2012: $60.17).
The weighted average remaining contractual life of conditional grants of shares outstanding at the end of the period was 3 years
(2012: 3 years).
The model inputs for conditional rights granted during the year ended 31 December 2013 included:
(a)
(b)
(c)
(d)
(e)
rights are granted for no consideration and have a three year life
exercise price: – (2012: – )
grant date: 27 May 2013 (2012: 19 March 2012)
expiry date: 14 February 2016 (2012: 19 March 2015)
share price at grant date: $53.11 (2012: $65.85)
Where shares 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.
120
Energy Resources of Australia Ltd Financial Report 2013Notes to the Consolidated Financial Statements (continued) Bonus Deferral Plan
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. 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 share price on the day of grant less a small adjustment for the timing of dividends vesting. No forfeitures are
assumed.
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 – 2013
Rio Tinto Limited
Weighted average fair
value at grant date
CONSOLIDATED – 2012
Rio Tinto Limited
Weighted average fair
value at grant date
1,265
1,149
(1,359)
(309)
$69.35
$53.11
$55.57
$81.00
292
973
$81.00
$65.85
-
-
-
-
-
-
-
-
746
$53.11
1,265
$69.35
-
-
-
-
The weighted average share price at the date of exercise of conditional grants of shares exercised during the year ended 31
December 2013 was $65.14 (2012: Nil).
The weighted average remaining contractual life of share options outstanding at the end of the period was 2 years (2012: 2 years).
Where shares 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
2013
$’000
1,338
2012
$’000
1,037
121
Energy Resources of Australia Ltd Financial Report 2013 Directors’ Declaration
In the Directors’ opinion:
(a)
the financial statements and notes set out on pages 82 to 121 are in accordance with the Corporations Act 2001 (Cth),
including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2013 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 the Chief Financial Officer required by section 295A of
Corporations Act 2001 (Cth). This declaration is made in accordance with a resolution of the directors.
P McMahon
Brisbane
7 February 2014
122
Energy Resources of Australia Ltd Financial Report 2013
Independent Auditor’s Report
Independent auditor’s report to the members of Energy
Resources of Australia Ltd
Report on the financial report
We have audited the accompanying financial report of Energy Resources of Australia Ltd (the
Independent auditor’s report to the members of Energy
company), which comprises the balance sheet as at 31 December 2013, the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the year ended
Resources of Australia Ltd
on that date, a summary of significant accounting policies, other explanatory notes and the directors’
declaration for Energy Resources of Australia Ltd (the consolidated entity). The consolidated entity
Report on the financial report
comprises the company and the entities it controlled at year’s end or from time to time during the
We have audited the accompanying financial report of Energy Resources of Australia Ltd (the
financial year.
company), which comprises the balance sheet as at 31 December 2013, the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the year ended
Directors’ responsibility for the financial report
on that date, a summary of significant accounting policies, other explanatory notes and the directors’
The directors of the company are responsible for the preparation of the financial report that gives a
declaration for Energy Resources of Australia Ltd (the consolidated entity). The consolidated entity
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
comprises the company and the entities it controlled at year’s end or from time to time during the
and for such internal control as the directors determine is necessary to enable the preparation of the
financial year.
financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the
directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Directors’ responsibility for the financial report
Statements, that the financial statements comply with International Financial Reporting Standards.
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
Auditor’s responsibility
and for such internal control as the directors determine is necessary to enable the preparation of the
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
Statements, that the financial statements comply with International Financial Reporting Standards.
obtain reasonable assurance whether the financial report is free from material misstatement.
Auditor’s responsibility
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
in the financial report. The procedures selected depend on the auditor’s judgement, including the
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
In making those risk assessments, the auditor considers internal control relevant to the consolidated
obtain reasonable assurance whether the financial report is free from material misstatement.
entity’s preparation and fair presentation of the financial report in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
in the financial report. The procedures selected depend on the auditor’s judgement, including the
accounting policies used and the reasonableness of accounting estimates made by the directors, as well
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
as evaluating the overall presentation of the financial report.
In making those risk assessments, the auditor considers internal control relevant to the consolidated
entity’s preparation and fair presentation of the financial report in order to design audit procedures
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
our audit opinion.
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors, as well
Independence
as evaluating the overall presentation of the financial report.
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
123
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Energy Resources of Australia Ltd Financial Report 2013 Independent Auditor’s Report (continued)
Auditor’s opinion
In our opinion:
(a)
the financial report of Energy Resources of Australia Ltd is in accordance with the Corporations
Act 2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity's financial position as at 31 December
2013 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001.
(b)
the financial report and notes also comply with International Financial Reporting Standards as
disclosed in Note 1.
Report on the Remuneration Report
We have audited the remuneration report included in pages 55 to 73 of the directors’ report for the
year ended 31 December 2013. The directors of the company are responsible for the preparation and
presentation of the remuneration report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the remuneration report, based on our audit
conducted in accordance with Australian Auditing Standards.
Auditor’s opinion
In our opinion, the remuneration report of Energy Resources of Australia Ltd for the year ended 31
December 2013 complies with section 300A of the Corporations Act 2001.
PricewaterhouseCoopers
John O’Donoghue
Partner
Melbourne
7 February 2014
124
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Energy Resources of Australia Ltd Financial Report 2013 Shareholder Information
Energy Resources of Australia Ltd is a for-profit company limited by shares, incorporated and domiciled in Australia.
The financial statements were authorised by Directors on 7 February 2014. The Directors have the power to amend and reissue the
financial statements.
The shareholder information set out below was applicable as at 31 January 2014.
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
8,077
4,527
1,545
1,521
80
51.28
28.74
9.81
9.66
0.51
NUMBER
OF SHARES
2,977,034
11,758,457
11,310,663
38,713,922
452,964,986
15,750
There were 4,879 holders of less than a marketable parcel of ordinary shares.
100.00
517,725,062
Equity security holders
The names of the twenty largest registered holders of quoted equity securities are listed below:
Peko Wallsend Ltd
North Limited
HSBC Custody Nominees (Australia) Limited
HSBC Custody Nominees (Australia) Limited
JP Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
National Nominees Limited
QIC Limited
Boda Investments Pty Ltd
Ganra Pty Ltd
UBS Nominees Pty Ltd
John E Gill Trading Pty Ltd
Ariki Investments Pty Limited
Brazil Farming Pty Ltd
BNP Paribas Noms Pty Ltd
Burleigh Heads Holdings Pty Ltd
ABN Amro Clearing Sydney Nominees Pty Ltd
Pages Super Pty Ltd
Merril Lynch (Australia) Nominees Pty Limited
NUMBER
OF SHARES
177,535,718
176,543,136
22,467,245
20,746,410
16,747,463
12,121,141
4,194,005
1,365,554
868,572
651,429
555,019
531,000
500,000
500,000
486,153
475,000
404,542
400,000
390,994
% OF
ISSUED
SHARES
0.58
2.27
2.18
7.48
87.49
100.00
% OF
ISSUED
SHARES
34.29
34.10
4.34
4.01
3.23
2.34
0.81
0.26
0.17
0.13
0.11
0.10
0.10
0.10
0.09
0.09
0.08
0.08
0.08
125
Energy Resources of Australia Ltd Financial Report 2013
Shareholder Information (continued)
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 Annual General Meeting will be held at 10am on Wednesday 9 April 2014 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 state-
ments, 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.
126
Energy Resources of Australia Ltd Financial Report 2013
2013 ASX Announcements
19 December 2013
Ranger processing plant incident - update
10 December 2013
Notification received from regulators
9 December 2013
Containment of tank failure - update
9 December 2013
Failure of tank and containment at Ranger mine
28 November 2013
Ranger 3 Deeps further exploration drilling results released
26 November 2013
Resignation & Appointment of Company Secretary
22 November 2013
ERA Financial Community Presentation October 2013
10 October 2013
September 2013 Quarter Operations Review
19 September 2013
Opening of Brine Concentrator at Ranger mine
16 September 2013
Financial Community Presentation September 2013
13 September 2013
ERA appoints new Chief Executive and Managing Director
30 August 2013
Ranger 3 Deeps First Exploration Drilling Results Released
1 August 2013
ERA 2013 Half Year Results Presentation
31 July 2013
31 July 2013
10 July 2013
29 April 2013
10 April 2013
10 April 2013
10 April 2013
9 April 2013
ASX Interim Report 30 June 2013
June 2013 Half Year Results
June 2013 Quarter Operations Review
Financial Community Presentation April 2013
2013 Annual General Meeting - Results of Voting
2013 AGM Chief Executive’s Address
2013 AGM Chairman’s Address
March 2013 Quarter Operations Review
21 March 2013
ERA and GAC complete independent review of surface water
13 March 2013
Ranger 3 Deeps mine environmental approval processes
5 March 2013
5 March 2013
5 March 2013
Annual General Meeting Proxy Form
Notice of Annual General Meeting
Annual Report to Shareholders
12 February 2013
Director Resignation
1 February 2013
Financial Community Presentation February 2013
31 January 2013
Annual Statement of Reserves and Resources
31 January 2013
ERA 2012 Full Year Results
24 January 2013
Ranger Mining Agreement Finalised
16 January 2013
ERA lodges Ranger 3 Deeps underground mine referral
10 January 2013
December 2012 Quarter Operations Review
Details of these announcements are available at www.energyres.com.au.
127
Energy Resources of Australia Ltd Financial Report 2013 Ten Year Performance
YEAR ENDED 31
DECEMBER
Sales Revenue ($000)
Earnings Before Interest
and Tax ($000)
Profit/(Loss) Before Tax
($000)
Income Tax Expense/
(Benefit) ($000)
Profit/(Loss) After Tax
($000)
Total Assets ($000)
Shareholders’ Equity ($000)
Long Term Debt ($000)
Current Ratio
Liquid Ratio
Gearing Ratio (%)
Interest Cover (times)
Return on Shareholders’
Equity (%)
Earnings Per Share (cents)
Dividends Per Share (cents)
Payout Ratio (%)
Share Price ($) 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 Concen-
trates (tonnes U3O8)
Sales – Other Concentrates
(tonnes U3O8)
Sales – Total (tonnes U3O8)
2013
2012
2011
2010
2009
2008
2007
2006
2005
20041
356,139 396,629 651,381 572,283 768,297 496,359 357,080 312,698 262,036 236,270
(199,431) (278,266) (220,633)
47,726 374,737 317,957 108,012
68,745
65,452
42,773
(186,541) (254,785) (206,340)
59,427 382,053 312,569
98,366
62,247
59,620
39,239
(50,712)
(36,026)
(52,741)
12,423 109,479
90,784
22,277
18,640
18,554
2,193
76,089
47,004 272,574 221,785
(135,829) (218,759) (153,599)
37,046
1,627,561 1,826,275 1,948,972 1,423,396 1,359,131 1,170,409 985,353 869,350 864,162 862,875
934,022 1,069,619 1,288,536 951,076 966,574 758,926 606,021 552,491 539,764 509,819
-
5.2
3.1
-
4.7
-
4.0
2.9
-
(156.7)
-
7.1
6.0
-
(177.9)
-
3.1
2.2
-
33.5
-
3.4
2.1
-
47.8
-
1.8
1.0
-
7.79
-
3.8
2.3
-
-
-
3.6
2.1
-
6.3
-
3.8
2.3
-
6.5
-
1.5
0.8
-
5.6
41,066
43,607
(14.5)
(26.2)
-
-
1.26
(4.81)
-
1.80
519
(20.5)
(42.3)
-
-
1.27
(3.00)
-
2.07
594
(264.8)
-
2.3
0.15
84.8
(374.5)
3.8
2.6
0.17
86.2
(11.9)
(29.7)2
-
-
1.23
(2.54)
-
2.49
567
(270.9)
1.2
1.6
0.18
87.9
4.9
24.6
8.0
32
11.13
45.24
2.96
4.99
523
89.87
1.4
2.4
0.19
87.2
31.6
142.9
39.0
27
23.89
16.72
1.42
5.07
521
29.2
116.3
28.0
24
19.00
16.34
1.47
3.98
519
523.17
2.2
2.3
0.26
88.3
427.33
3.5
2.0
0.30
88.2
13.1
39.9
20.0
28
19.50
48.88
1.03
3.20
419
181.6
2.9
1.9
0.31
88.2
8.0
22.9
17.0
74
20.80
90.98
0.82
2.90
385
113.3
3.3
2.0
0.26
87.5
7.6
21.5
17.0
80
10.02
47.70
1.70
2.80
354
116.0
2.2
2.3
0.29
88.3
7.3
19
17.0
88
6.59
34.7
2.58
2.67
273
143.7
0.8
2.1
0.28
88.8
2,960
3,710
2,641
3,793
5,240
5,339
5,412
4,748
5,910
5,137
2,767
2,665
3,258
4,373
5,497
5,272
5,324
5,760
5,552
5,024
48
2,815
558
3,223
1,908
5,167
653
5,026
–
5,497
–
5,272
–
5,324
–
5,760
136
5,688
581
5,605
Restated to comply with IFRS
Post rights issue
Note 1
Note 2
Definition of statistical ratios
Current Ratio
Liquid Ratio
foreign exchange
Gearing Ratio
Interest Cover
Return on Shareholders’ Equity
Earnings per Share
=
=
=
=
=
=
current assets/current liabilities
(current assets-inventory-prepayments-foreign exchange hedge asset on borrowings)/(current liabilities-bank overdraft –
hedge liability)
(long term debt + term creditors)/(shareholders’ equity + long term debt + term creditors)
earnings before interest and tax/interest expense
profit after tax/average shareholders’ equity
profit after tax/weighted average number of shares issued
128
Energy Resources of Australia Ltd Financial Report 2013
Index
2013 Announcements
2014 Objectives
Auditor’s Independence Declaration
Business strategy
Business risks
Brine Concentrator
Chairman’s Report
Chief Executive’s Report
Company Profile
Code of Business Conduct
Community
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes
in Equity
Consolidated Statement of
Comprehensive Income
Corporate Governance Statement
Director’s Declaration
Directors’ Report
Employment
Environment
Energy and greenhouse gas
emissions
Financial performance
Financial Report
Future supply
Health and safety
Independent Auditor’s Report
Independent Surface Water
Working Group
Indigenous Employment
Jabiluka Interim Water Management
Pond Rehabilitation
Land
Markets and Customers
Mine Manager of the Year
Notes to Consolidated Financial
Statements
Operationing and Financial Review
Operations
Pit 1 closure
Pit 3 backfill
Radiation monitoring
127
Ranger 3 Deeps exploration decline
Ranger 3 Deeps Social Impact
Assessment
Regulatory Framework
Relationship with Mirarr Traditional
Owners
Royalty Payments
Shareholders Information
Sustainable Development Overview
Trial Landform
Water
Waste Management
Weed Management
8
76
15
17
34
4
6
3
3
44
83
85
84
82
77
122
50
41
33
39
9
48
18
23
123
35
41
35
37
22
13
86
9
12
38
37
25
15
46
28
44
45
125
32
38
33
40
39
129
Energy Resources of Australia Ltd Financial Report 2013 Corporate Directory
Head Office
Level 3, Energy House
18-20 Cavenagh 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
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Energy Resources of Australia Ltd Financial Report 2013 E
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www.energyres.com.au
This report is printed with the environment in mind.