E
N
E
R
G
Y
R
E
S
O
U
R
C
E
S
O
F
A
U
S
T
R
A
L
I
A
L
T
D
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
4
Surrounding environment remained
protected, as confirmed by the
Supervising Scientist
Ranger 3 Deeps Exploration
Decline completed
Produced 1,165 tonnes
of uranium oxide
Strong cash position
maintained
Reduction in
employee numbers
with end of Pit 3
initial backfill
Implemented process
safety improvement
action plan
Powering tomorrowANNUAL REPORT 2014
THE YEAR IN REVIEW 2014
2014 – Year in Review
Surrounding
environment
remains protected,
as confirmed by the
Supervising Scientist,
Commonwealth
Department of the
Environment
Ranger 3 Deeps
Exploration Decline
project completed
on schedule and on
budget
Refer to page 14 for
further detail
Refer to page 17 for
further detail
Major activities of
the $57 million
Prefeasibility Study
into underground
mining substantially
completed
Draft Environment
Impact Statement
for proposed
underground mining
operation submitted
to regulators
Brine Concentrator
processed 844
megalitres of water
in first full year of
operations
Processing
operations resumed
following recovery
from Leach Tank 1
failure. No impact
on the surrounding
environment
Refer to page 14 for
further detail
More than $23
million in additional
cost savings in 2014
as part of ERA’s
ongoing Business
Review
Refer to page 18 for
further detail
Refer to page 19 for
further detail
Refer to page 14 for
further detail
Refer to page 13 for
further detail
Produced 1,165
tonnes and sold
3,148 tonnes of
uranium oxide
Refer to page 14 for
further detail
Ahead of schedule
on the rehabilitation
of Pit 3, with 33.7
million tonnes
backfilled, and
brine injection
infrastructure
installed
69 female
employees (18 per
cent of employees)
and 47 Indigenous
employees (12 per
cent of employees)
Net loss after tax
– $188 million.
$293 million in
cash on hand
Refer to page 48 for
further detail
Refer to page 12 for
further detail
Capping in Pit 1
rehabilitation
nearing completion
Revegetation of
Jabiluka pond
rehabilitation site
completed with
additional 4,679
native tubestock
planted
Refer to page 15 for
further detail
Refer to page 15 for
further detail
Refer to page 15 for
further detail
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
1
THE YEAR IN REVIEW 2014
Sales Revenue ($M)
Drummed Production Tonnes (t)
.
4
1
5
6
.
3
2
7
5
.
6
9
6
3
.
1
6
5
3
.
2
9
7
3
3
7
9
3
,
0
1
7
3
,
0
6
9
2
,
1
4
6
2
,
5
6
1
1
,
2010
2011
2012
2013
2014
2010
2011
2012
2013
2014
Net Profit After Tax ($M)
Indigenous Employees (FTE’s)
9
9
3
0
1
7
4
1
8
9
7
6
.
3
5
1
-
8
.
8
1
2
-
8
.
5
3
1
-
8
.
7
8
1
-
7
4
2010
2011
2012
2013
2014
2010
2011
2012
2013
2014
Operating Cashflow ($M)
All Injury Frequency Rate (per 200,000 hrs worked)
9
.
4
5
1
.
2
4
7
2
.
1
1
9
.
0
3
.
3
-
9
.
7
1
-
0
.
4
5
-
3
7
.
0
7
5
.
0
2
5
.
0
2010
2011
2012
2013
2014
2010
2011
2012
2013
2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
2
SUBSECTION
Navigate our Annual Report to see
how we’re Powering Tomorrow.
Throughout the report these icons are used to highlight key areas of our activity
Safety
Environment
Communities and Government
People
Operations
Business performance
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
3
CONTENTS
Contents
2014 Annual Report
2014 – Year in Review .......................................................................... Inside front cover
Company Profile ........................................................................................................... 5
Chairman’s Report ........................................................................................................ 6
Chief Executive’s Report ............................................................................................... 8
2015 Objectives .......................................................................................................... 10
Operating and Financial Review .................................................................................. 12
Financial Performance ........................................................................................... 12
Operations ............................................................................................................ 14
Business Strategy .................................................................................................. 16
Future supply .............................................................................................................. 22
Ranger Ore Reserves ............................................................................................. 23
Markets and customers ............................................................................................... 26
Health and safety........................................................................................................ 30
Radiation monitoring .................................................................................................. 32
Regulatory framework ................................................................................................ 36
Sustainable Development Report
Overview .................................................................................................................... 40
Environment ............................................................................................................... 41
Land ........................................................................................................................... 45
Employment ............................................................................................................... 48
Community ................................................................................................................. 51
Financial Report............................................................................................. 56
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
4
COMPANY PROFILE
ERA is demonstrating strong environmental
management practices as it continues to make
progress on the rehabilitation of the exhausted
Pit 1 and Pit 3 open cut mines.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
5
COMPANY PROFILE
Company Profile
Energy Resources of Australia Ltd (ERA) operates the
Ranger uranium mine in the Northern Territory of
Australia. As Australia’s longest continually operating
uranium producer, ERA has been reliably supplying
customers in Asia, Europe and North America for
more than three decades.
ERA sells its product to international
power utilities under strict
international and Australian
Government safeguards and non-
proliferation conditions to ensure
that Australian uranium is only used
for peaceful purposes.
Ranger is one of only three mines
in the world to have produced
in excess of 110,000 tonnes of
uranium oxide (U3O8).
ERA is currently processing
stockpiled ore following the
completion of open cut mining
in 2012 and has been conducting
underground exploration of the
Ranger 3 Deeps mineral resource as
it prepares for a potential transition
to underground mining.
ERA is demonstrating strong
environmental management
practices as it continues to make
progress on the rehabilitation of
the exhausted Pit 1 and Pit 3 open
cut mines.
Located eight kilometres east of
Jabiru and 260 kilometres east of
Darwin, in Australia’s Northern
Territory, the 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.
Acknowledgement
ERA acknowledges the Mirarr
people, Traditional Owners of the
land on which ERA operates.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
6
CHAIRMAN’S REPORT
Chairman’s Report
In last year’s annual report, I outlined the key areas
of strategic focus for the Company during 2014.
These included recovering momentum and regaining
community and stakeholder confidence following the
leach tank failure and paving the way for a future as
an underground miner with a significantly smaller
environmental footprint that can contribute to the
global energy market and local economy.
PETER MCMAHON
CHAIRMAN
I can report that during 2014 the
Company’s key developments reflected
the strategic focus set by the Board.
The Supervising Scientist,
Commonwealth Department of the
Environment, confirmed there was no
detrimental impact to the surrounding
environment or to the Kakadu
National Park as a result of the leach
tank failure. Although our protective
spill containment systems worked as
designed, we do recognise that the
failure caused concern among our
stakeholders and the community.
Both the Board and management
understand the importance of
ensuring the safety and environmental
performance of the Ranger mine and
the need to maintain stakeholder
confidence in the operations at Ranger.
Following the leach tank failure,
the Company worked closely and
openly with stakeholders on detailed
investigations and reviews into the
cause of the failure and on ensuring
the integrity of other key assets.
Most importantly, ERA management
introduced permanent changes to
process safety to help prevent any
recurrence.
Momentum was recovered during
the year with Ranger achieving a safe
and successful restart of processing
operations. Ahead of receiving
regulatory approvals, the Board
agreed a scope of work in April to
be undertaken to bring the plant to
readiness for restart. By year end 2014
Ranger production was within our
market guidance.
The completion of the Ranger 3 Deeps
Exploration Decline and the associated
underground exploration drilling
program has helped pave the way to a
potential underground mine.
In 2011 the Board approved the
$57 million Prefeasibility Study into
the Ranger 3 Deeps project. The
major activities contributing to the
Prefeasibility Study were substantially
completed in 2014.
Following the public comment
period on the Ranger 3 Deeps draft
Environmental Impact Statement, a
supplementary Environmental Impact
Statement will be lodged to allow for
a government determination on the
project later in 2015.
The Company is committed to
meeting its rehabilitation obligations.
Our credentials in this regard were
demonstrated in 2014 with substantial
progress in major rehabilitation projects.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
7
CHAIRMAN’S REPORT
ERA continues to make appropriate
provision for the completion of
rehabilitation. In addition, we
maintain with the Commonwealth
Government the Ranger
Rehabilitation Trust Fund to provide
security against the estimated
costs of closing and rehabilitating
the mine immediately. This is
independently assessed and the
Trust is made up of cash and bank
guarantees.
We have also continued to work
with the Gundjeihmi Aboriginal
Corporation, representing the
Mirarr Traditional Owners.
In particular the Relationship
Committee, established under
the Mining Agreement, met
regularly in 2014 and is helping
promote information sharing and
collaboration. The committee
is important in providing an
opportunity to discuss issues of
importance to the relationship,
overseeing compliance with the
Mining Agreement and allowing
collaboration on issues such as
the future of Jabiru, local housing
needs, water management and
local employment.
We are at a critical juncture in
ERA’s 30 year history and it comes
at a time when global concern
about climate change continues to
reinforce the key role to be played by
nuclear power in generating reliable,
low emissions base load power.
This discussion is taking place
in Australia and overseas, and is
reflected in new commitments to
nuclear energy, ranging from the
approval for restart of Japanese
reactors to China’s nuclear
expansion program. The majority of
the growth in nuclear generation
capacity is expected to come from
Asia, including India.
While in the short term the market
will remain characterised by
oversupply and softer demand,
which contribute to weakness
in spot prices, the spot price
recovery from lows of US$28.23
per pound in mid-2014 to a year-
end price of US$35.50 per pound
is a positive trend. It is forecast
to strengthen in the medium to
long term.
Japan’s decision to give final
approval for the restart of two
reactors for Kyushu Electric Power
Co. in November helped mark a
shift in market sentiment. This was
supported by China’s commitment
to cap its carbon emissions by 2030
and increase the share of non-fossil
fuels in its energy production.
It has also been reinforced by
commentary on the importance of
nuclear power in addressing climate
change. For example, in December
75 leading conservation scientists
from around the world argued in
an open letter to environmentalists
that nuclear power generation
needed to be part of the future
global energy mix to reduce
greenhouse gas emissions and
protect biodiversity.
World-wide there are
currently 436 operating
reactors, with 71 under
construction, and a further
174 planned.
In this context Ranger 3 Deeps is an
important part of positioning the
Company to take advantage of the
projected recovery in uranium prices
and to support the demand for
low emissions power generation.
ERA remains focused on managing
its operations responsibly and
meeting its commitments under the
current Mining Agreement, while
continuing to progress the Ranger
3 Deeps underground mine project.
In closing I would like to express
my appreciation to all the ERA
team for their efforts during a
demanding year.
Peter McMahon
Chairman
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
8
CHIEF EXECUTIVE’S REPORT
Chief Executive’s Report
ERA made a strong return to full operations in 2014
after receiving all regulatory and stakeholder approvals
in June for a progressive restart of processing activities
following the failure of Leach Tank 1 in December 2013.
ANDREA SUTTON
CHIEF EXECUTIVE
There has been a necessary reduction
in workforce size associated with
the completion of open cut mining
operations and the fact that we are
processing stockpiled, lower grade ore.
ERA’s Ranger 3 Deeps underground
mine project is progressing, with a
draft Environmental Impact Statement
submitted to the Northern Territory
and Commonwealth governments
in October.
The draft Environmental Impact
Statement was open for public
comment for 10 weeks. Feedback will
be incorporated into a supplementary
Environmental Impact Statement.
The major activities contributing to
the Prefeasibility Study into Ranger 3
Deeps were substantially completed
by year end. The Prefeasibility Study
assesses the technical, operational,
economic, environmental and social
impacts of underground mining. An
independent Social Impact Assessment
which formed part of the draft
Environmental Impact Statement found
that proceeding with the underground
mine would deliver significant and
sustainable benefits to the local
community.
2014 also saw the completion of the
underground Exploration Decline and
associated infrastructure. Completion
of the underground exploration drilling
program and a cross-cut into the main
ore body to obtain further data to
optimise the underground mine design
were also achieved during the year.
Throughout a safe recovery operation,
ERA also delivered on key strategic
projects, continued structural changes
towards a leaner and more agile
business and worked to rebuild and
strengthen relations with our key
stakeholders.
During the year ERA milled 1.3 million
tonnes of stockpiled ore and produced
1,165 tonnes of uranium oxide, secured
sales of drummed uranium of $379
million and reported a net loss after tax
of $188 million.
The business also achieved savings of
more than $23 million and exceeded
the $150 million target set for the
end of 2014. This continues to be a
focus for the business and further
initiatives are underway. Delivery of
cash generation initiatives and cost
reductions is a key part of structural
and operational changes necessary
to create a leaner and more agile
organisation for the transition to
underground mining.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
9
CHIEF EXECUTIVE’S REPORT
The drilling results show high grade
intersections and as announced on
17 September 2014, an increase
in the resource model estimate
to 34,761 tonnes of uranium
oxide. A total of 47,000 metres
of underground exploration
drilling was completed. Both
the Exploration Decline and the
exploration drilling occurred on
time and within budget.
A key focus of activities for ERA in
the first half of 2014 was recovery
from the failure of Leach Tank 1 on
7 December 2013.
A taskforce was established
by the Commonwealth and
Northern Territory governments to
provide a coordinated regulatory
response to the recovery works
and investigations. The taskforce
included representatives from the
Commonwealth Department of
Industry (now the Department
of Industry and Science), the
Northern Territory Department of
Mines and Energy, NT Worksafe,
the Supervising Scientist,
Commonwealth Department of
the Environment, the Gundjeihmi
Aboriginal Corporation and the
Northern Land Council.
Restart was approved by regulators
on 5 June 2014 following
independent inspection and
certification of critical assets as
being fit for service.
A key outcome of the investigations
and recovery works was the
development of the ERA Process
Safety Improvement Action Plan,
which will be reviewed on a quarterly
basis by the Commonwealth and
Northern Territory governments.
The plan has introduced
improvements to ERA’s Process
Safety systems and imposed
tighter governance of critical asset
surveillance and maintenance
regimes.
ERA’s safety performance in 2014
showed a decline compared with
2013. The All Injury Frequency Rate
(AIFR) was 1.27 (2013: 0.91). There
were eight lost time injuries and one
medical treatment case. In response
we have undertaken a range of
measures including increased
safety training and prestart safety
planning for maintenance crews.
We also developed 17 critical
control management plans for
identified critical risks.
ERA’s progressive rehabilitation
program reached significant
milestones in 2014. In effect, the
2014/15 wet season represents
“peak storage” for the Tailings
Storage Facility and marks a key
turning point for ERA as tailings
are progressively transferred into
Pit 3 following the initial backfilling
and installation of drainage in the
Pit and as the Brine Concentrator
reduces the volume of process
water in the Tailings Storage Facility.
In Pit 1, ERA completed the pre-
load rock capping to compress the
tailings. A clay barrier is also being
placed over the pre-load layer to
allow the Pit 1 rainwater catchment
to be formally reclassified from
process water to pond water,
significantly reducing inputs to the
Tailings Storage Facility. From 2017
the final rock backfill will be placed
ahead of shaping the final landform
and preparing for revegetation.
In addition, ERA continued to
work with Gundjeihmi Aboriginal
Corporation and the Mirarr
Traditional Owners on a range of
issues, including the rehabilitation
and revegetation of the site of the
former Interim Water Management
Pond at Jabiluka.
Working and collaborating with
the Mirarr Traditional Owners and
other community stakeholders
continues to be a central focus of
our business.
ERA and the Gundjeihmi Aboriginal
Corporation are represented on
and contribute to the new Kakadu
West Arnhem Social Trust, which
administers funding for cultural,
educational and other social
programs in the region.
ERA and the Gundjeihmi Aboriginal
Corporation also continue to
engage through a number of
formal structures that support
regular meetings and sharing of
information.
More broadly in the community,
ERA continued support for local
festivals, engaged with local schools
and students through the Education
Partnership with the West Arnhem
College which entered its fifth year,
funded the fifth and final year of
the $28,000 Chaloupka Foundation
Fellowship for Aboriginal rock art
and raised funds for CareFlight
through the Jabiru Triathlon.
2014 has been a challenging and
rewarding year, in which we have
successfully and safely achieved
full mill throughput, identified
and acted on opportunities for
improvement, demonstrated
industry leading expertise in
rehabilitation, and readied the
organisation for the potential
transition to underground mining.
These achievements are testament
to the quality, dedication and
expertise of our people and the
continued support of our key
stakeholders. I look forward to
working with the ERA team again
in 2015.
Andrea Sutton
Chief Executive
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
10
10
2015 OBJECTIVES
2015 Objectives
The Company’s objective is to prepare for a future as an underground miner with a significantly smaller
environmental footprint, generating shareholder value and contributing to the local economy.
AREA
OBJECTIVES
Health,
Safety and
Environment
Implement the recommendations of the Process Safety Improvement Action Plan
Committed to the goal of zero harm
•
• Focus on strong safety leadership with extensive employee and contractor engagement
• Demonstrate a sound understanding of critical risk profiles within the organisation and monitor
using Critical Control Management Plans
• Fully integrate underground health and safety standards into existing management system in
preparation for the potential transition to Ranger 3 Deeps mining operation
• 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 through risk assessment and
effective environmental management plans
Financial
Maximise cash generation and shareholder value
• Optimise the business to adapt to lower production levels and market conditions
• Maximise value from potential development options, including Ranger 3 Deeps
• Continue to identify further opportunities for operational efficiencies and cost savings
• Work with suppliers to improve delivery of goods and services in a cost effective way
Ranger 3
Deeps
Evaluate and identify the optimal development pathway for Ranger 3 Deeps
• Submit supplementary Environmental Impact Statement
• Engage and work collaboratively with the Gundjeihmi Aboriginal Corporation and other key
stakeholders to gain support for the project
• Secure statutory approvals for the project
• Execution of the optimal development option for Ranger 3 Deeps commences
Operations
Economically produce uranium from stockpiled ore while integrating rehabilitation activities
• Maximise production of uranium oxide
• Optimise Brine Concentrator operations for a consistent production rate of 1.8 gigalitres of clean
water per annum
Rehabilitation
Continue progressive rehabilitation of the Ranger Project Area
• Successfully convert Pit 1 into a pond water catchment
• Commission Pit 3 tailings and brine management infrastructure and commence transfer of
dredged tailings from the Tailings Storage Facility to Pit 3
• Progress definition of closure criteria through the closure criteria working group
Communities
and
Government
Develop a shared understanding and strengthen relationships with key stakeholders
• Actively engage, through effective dialogue and information sharing, with the Gundjeihmi
Aboriginal Corporation on behalf of the Mirarr Traditional Owners, to achieve mutually beneficial
outcomes for the business and Traditional Owners
People
• Secure appropriate approvals to ensure ongoing business operations through engagement with
governments, government agencies, Traditional Owners and other key stakeholders
• Engage with governments, government agencies and other key stakeholders to ensure timely
outcomes on development projects and operations
• 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 the ERA workforce
• Continue to support and develop ERA’s leaders through leadership programs 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
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
11
2015 OBJECTIVES
… prepare for a future as an underground
miner with a significantly smaller environmental
footprint, generating shareholder value and
contributing to the local economy.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
12
OPERATING AND FINANCIAL REVIEW
Operating and Financial Review
A new assessment
of opportunities
for improving
efficiency as part
of preparations for
underground mining
is now underway.
Financial Performance
CASH FLOW
Operating cash flow was negative
$54 million for the 12 months
ending 31 December 2014
(2013: negative $18 million). The
absence of production in the first
half of the year was offset by
cash generated from sales from
inventories, a sustained focus on
cash preservation and delivery of
business improvement initiatives.
Total cash flow result for the
year is inclusive of expenditure
of $83 million for exploration and
evaluation, $12 million for capital
expenditure and $57 million for
rehabilitation projects. The cash
balance for the year decreased from
$357 million at 31 December 2013 to
$293 million at 31 December 2014.
EARNINGS
ERA recorded a net loss after tax
of $188 million for the 12 months
ending 31 December 2014 (2013:
loss of $136 million).
REVENUE
In the delivery of reliable, long
term supply of uranium oxide to
customers, ERA principally focusses
on sales into long term contracts.
Earnings were impacted by a draw
down in inventory associated with
the plant suspension, the purchase
of uranium oxide and exploration
and evaluation expenditure relating
to the Ranger 3 Deeps Exploration
Decline and Prefeasibility Study.
This was partially offset by reduced
non-cash costs and increased sales
revenue.
ERA began a progressive restart of
operations in June and returned
to full mill throughput in the
September quarter.
In 2014 ERA’s revenue from the sale
of uranium oxide was $379 million
(2013: $356 million).
Sales of uranium oxide were 3,148
tonnes (2013: 2,815 tonnes).
Sales in the first half of 2014 were
supplied by existing levels of finished
goods inventory on hand. ERA
purchased uranium oxide to meet
committed sales in the third quarter
of 2014.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
13
OPERATING AND FINANCIAL REVIEW
In 2014, weakness in both the
spot and long term uranium oxide
indicators continued, adversely
affecting ERA’s average realised
sale price.
The average realised sale price of
uranium oxide achieved by ERA
in 2014 was US$49.50 per pound
(2013: US$53.92).
Sales of uranium oxide are
denominated in US dollars. In 2014,
the Australia dollar continued to
fall relative to the strengthening US
dollar, exerting a positive influence
on ERA’s revenue, particularly in the
fourth quarter of the year.
COSTS
All operating costs incurred
(excluding the purchase of
uranium oxide) while the plant
was suspended were allocated
to the Statement of Financial
Performance rather than absorbed
into inventories.
Expenditure on contractors
increased due to progress on the
Ranger 3 Deeps Exploration Decline
and Prefeasibility Study along with
costs associated with the leach tank
recovery works.
Raw materials and consumable costs
were lower due to the suspension of
processing operations.
Further savings have been achieved
through improved procurement
practices, reduction in the
directly employed workforce and
contractors, and continued focus
on driving down corporate and
overhead costs.
A lower asset cost base combined
with reduced production in 2014
associated with the plant shutdown
delivered a further decrease in
non-cash costs (depreciation).
Depreciation is largely calculated on
a units of production basis.
With the construction of the Brine
Concentrator in 2013 and no
significant new capital development
projects, capital expenditure in
2014 decreased to $12 million
(2013: $91 million).
DIVIDENDS
ERA Directors have determined that
a dividend for 2014 will not be paid.
No dividend was paid in 2013.
FINANCIAL POSITION
Net assets have decreased during
the year by approximately $188
million. Impacting this was a
decrease in cash, property, plant
and equipment along with lower
inventory holdings. These were
partially offset by an increased
deferred tax asset.
Total liabilities have decreased
primarily due to a reduction in the
rehabilitation provision.
ERA maintains approximately
$293 million of cash on hand.
REHABILITATION PROVISION
ERA’s Integrated Tailings, Water
and Closure Study has continued
to optimise the rehabilitation
plan for the Ranger Project Area.
This review resulted in a decrease
to the provision of $74 million.
The provision for rehabilitation
represents the net present cost for
rehabilitation as at 31 December
2014 and stands at $512 million
(2013: $603 million). The key
changes related to the use of more
efficient technology in thickening
tailings transferred from the existing
Tailings Storage Facility to Pit 3.
The overall rehabilitation strategy
remains unchanged.
BUSINESS REVIEW
ERA’s Business Review identified
opportunities to operate more
efficiently and reduce costs.
Introduced in 2011, the Business
Review established cumulative
operating cost saving targets
of $150 million by the end of
2014. During 2014, the review
achieved cost savings of more than
$23 million, and exceeded the
cumulative cost saving target of
$150 million.
A new assessment of opportunities
for improving efficiency as part
of preparations for underground
mining is now underway.
Further savings have been
achieved through improved
procurement practices,
reduction in the directly
employed workforce and
contractors, and continued
focus on driving down
corporate and overhead costs.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
14
OPERATING AND FINANCIAL REVIEW
Operations
During 2014 the restart of the
Ranger processing operations
involved a progressive ramp up as
processing facilities were returned
to service.
In line with production guidance,
ERA produced 1,165 tonnes of
uranium oxide in 2014 (2013:
2,960 tonnes).
PLANT PERFORMANCE
Following the progressive ramp up
of operations, both of the main
mills and the laterite mill performed
at capacity and were fed with
stockpiled ore.
The volume of ore treated during
the year was 1.3 million tonnes
(2013: 2.3 million tonnes). Average
mill head grade was 0.11 per cent
(2013: 0.15).
Milling rates of 305 tonnes per
hour reflected strong milling plant
performance associated with ERA’s
preventative maintenance program.
The processing shutdown in the
first half of 2014 also provided
an opportunity to conduct
maintenance on the mills and
associated equipment.
LEACH TANK RECOVERY
Following the failure of Leach
Tank 1 in December 2013, ERA
immediately suspended processing
operations and fully cooperated
with a range of investigations by
the Commonwealth Department of
Industry (now the Department of
Industry and Science), the Northern
Territory Department of Mines
and Energy, the Commonwealth
Supervising Scientist and NT
WorkSafe. ERA also commissioned
an independent investigation into
the root cause of the failure and an
independent review of the integrity
of the processing plant.
(cid:83) Preparation work in Pit 3
A government appointed taskforce
comprising representatives from
the Commonwealth Department
of Industry (now the Department
of Industry and Science), the
Northern Territory Department of
Mines and Energy, NT WorkSafe,
the Supervising Scientist, the
Gundjeihmi Aboriginal Corporation
and the Northern Land Council was
established to provide a coordinated
regulatory response to the leach
tank failure. The taskforce provided
input and oversight of recovery
works and investigations.
On behalf of the Northern Territory
and Australian Governments,
independent experts Noetic Risk
Solutions and HRL Technology
conducted an intensive investigation
of the leach tank circuit and other
critical infrastructure and ERA’s
restart plans and plant integrity
monitoring program.
Their final report was delivered
to the Northern Territory and
Commonwealth governments
in October.
In August the Supervising Scientist
confirmed there has been no
impact to the surrounding
environment as a result of the leach
tank failure.
In response to the learnings from
the leach tank recovery, ERA has
produced a detailed plan for the
improvement of process safety
management and governance
at Ranger, the Process Safety
Improvement Action Plan.
BRINE CONCENTRATOR
2014 was the first full year
of operation for the Brine
Concentrator (See Environment,
page 43).
The Brine Concentrator uses
scientifically proven technology to
treat process water stored in the
Tailings Storage Facility.
During 2014 ERA worked with
manufacturer HPD, a subsidiary
of Veolia Water Solutions and
Technologies, on optimisation of
throughput and treatment settings
to maximise output.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
15
OPERATING AND FINANCIAL REVIEW
During 2014 the Brine Concentrator
produced a total volume of 844
megalitres of distillate.
PROGRESSIVE REHABILITATION
– PIT 3
The initial backfill of Pit 3 was
successfully completed in August,
with a total of 33.7 million tonnes
of waste rock placed into the pit.
ERA also completed installation
of five brine injection wells, and a
drain and extraction pump system
which will enable injection of
the waste brine from the Brine
Concentrator into the pit and the
transfer of dredged tailings from
the Tailings Storage Facility.
A dredge has been designed and
constructed to operate within the
Tailings Storage Facility and will
facilitate the transfer and pumping
of tailings to Pit 3.
This work means that in 2015 ERA
will have reached a significant
rehabilitation milestone and
tailings currently held in the Tailings
Storage Facility will be progressively
transferred to Pit 3, and the water
in the Tailings Storage Facility will
be progressively drawn down and
treated.
The in-pit drainage and extraction
pumping system installed in Pit
3 at the end of 2014 enables the
removal of water associated with
the tailings slurry mixture and water
within the backfilled rock. This
water returns to the Tailings Storage
Facility from where it can be treated
by the Brine Concentrator.
The injection wells allow brines
produced by the Brine Concentrator
to be safely stored within the
backfilled rock.
Transfer of tailings to Pit 3 will begin
in 2015, ahead of the eventual
rock capping, landforming and
revegetation with locally sourced
native plant species. Final Pit 3
rehabilitation is to be completed
by 2026.
PROGRESSIVE REHABILITATION
– PIT 1
Both Pit 1 and Pit 3 are intended
to encapsulate all mill tailings.
Pit 1 is the most advanced with
tailings having previously been
placed in the pit as required by the
Ranger Authority. That meant that
rainwater run-off from the Pit 1
catchment had to be managed as
process water and transferred to
the Tailings Storage Facility.
Current activities are associated
with dewatering of the tailings
to allow for final capping and
conversion of the pit from a process
water catchment to a pond water
catchment.
During the year ERA made
significant progress on the
rehabilitation of Pit 1, which
involved installing drainage wicks
and compressing the tailings mass
with a pre-load rock layer placed
over geotextile fabric.
The rock pre-load activates the
drainage wicks, forcing the water in
Pit 1 to travel to the surface where
it is collected and pumped to the
Tailings Storage Facility. Removal of
the water promotes consolidation
of the tailings and allows the
placement of final capping and
rehabilitation to occur.
ERA had completed the placement
of the pre-load rock layer by year
end and a trial plot constructed
within Pit 1 demonstrated the
effectiveness of an impervious clay
liner placed over the rock layer for
water management.
Analysis of rainwater run-off from
the clay liner demonstrates that
when completed the capped Pit
1 will be able to be managed
as a pond water rain catchment
area. Completion of the clay liner
will allow the final bulk rock fill
to be placed from 2017 ahead of
landforming and revegetation.
A critical outcome of this change
in water management for the Pit 1
water catchment area is a further
and significant reduction in process
water entering the Tailings Storage
Facility.
REHABILITATION – JABILUKA
POND
The other principal rehabilitation
activity undertaken in 2014 was the
continued work to revegetate the
former site of the Jabiluka Interim
Water Management Pond.
In conjunction with the Gundjeihmi
Aboriginal Corporation and
Mirarr Traditional Owners, ERA
has worked to rehabilitate and
revegetate disturbed areas of the
Jabiluka lease, including the site of
the now dismantled pond.
During 2014 the planting at Jabiluka
was completed with an additional
4,679 local native tubestock trees
planted at the landformed pond site
(see Environment page 45).
ERA’s overall approach is informed
by outcomes from the large-scale
trial landform project (see Land,
page 45). This project identifies
effective strategies for surface
landform design, erosion control
and revegetation techniques for
plant species.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
16
OPERATING AND FINANCIAL REVIEW
JABIRU AIRPORT
The Jabiru Airport is located on
the Ranger Project Area. The
airport provides a critical regional
air transport service for mining
operations, tourism, emergency
services and local communities.
In October ERA completed asphalt
resealing works on the airport
runway and turning apron.
The reseal covered an estimated
38,000 square metres to a depth
of 25 millimetres. The airport was
also recertified by the Civil Aviation
Safety Authority.
JABIRU HOUSING AND
ACCOMMODATION
ERA currently manages 279
houses in Jabiru. During 2014 ERA
continued discussions with the
Gundjeihmi Aboriginal Corporation
relating to the future use of houses
previously used to accommodate
Ranger employees. Sixty houses
were renovated and painted as part
of routine maintenance.
Business Strategy
ERA is undergoing a business
transition as it prepares for
the proposed Ranger 3 Deeps
underground mine.
This transition is in line with ERA’s
vision to be a world-class uranium
supplier that contributes to
environmental sustainability and is
trusted by Traditional Owners, the
community and its people.
ERA’s key business objectives are to:
• develop a long term resource
base on the Ranger Project Area;
• continue to operate effectively
and safely;
• build and maintain strong
stakeholder relationships; and
• demonstrate excellence in
rehabilitation practices.
ERA considers that the
implementation of these objectives
will maximise shareholder value and
benefit its stakeholders.
With the completion of open cut
mining at Ranger, the future for
ERA is focused on the potential
development of a low impact
underground mining operation.
The Ranger 3 Deeps underground
mine is scheduled to progress
in parallel with progressive
rehabilitation of disturbed surface
areas and continued management
of water inventories.
Should the proposal for the
development of the Ranger 3
Deeps underground mining
operation proceed, ERA will
continue to provide the world’s
nuclear utilities with reliable,
high quality and competitive
uranium supply.
In addition, the scheduled
development of the Ranger 3 Deeps
underground mine will position ERA
to take advantage of an expected
medium-term recovery in demand
and prices for uranium.
(cid:83) Kevin Horace at the ball mill, which is part of the ore grinding circuit of the Ranger processing plant
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
17
OPERATING AND FINANCIAL REVIEW
(cid:83) The Ranger 3 Deeps Exploration Decline was completed in 2014
ERA’s operations are located on
Aboriginal land and are surrounded
by, but separate from, the
World Heritage-listed Kakadu
National Park.
Respecting the culture and
aspirations of Indigenous people
in our community, particularly
the Mirarr Traditional Owners, is
a central element of ERA’s overall
strategy.
This respect is closely linked with
our commitment to protect the
environment. ERA continues to invest
in water management infrastructure
and progressive rehabilitation of the
Ranger Project Area.
In addition to Ranger 3 Deeps, the
Jabiluka Mineral Lease 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
The Exploration Decline project,
which was completed in 2014,
comprised a three-phase
construction program and an
underground drilling program.
The first phase of development,
completed in April 2014, involved
construction of a 185 metre
entrance portal and 1,900 metres
of tunnel development.
The second phase of development
involved construction of a low-
profile ventilation shaft and an
extension to the decline to a
distance of 2,710 metres. The third
phase involved a 40 metre cross-cut
through the ore body.
The cross-cut was designed to
gather further data to validate mine
design assumptions. The exploration
drilling program occurred in parallel
with the decline construction and
comprised a total of 47,000 metres
of close spaced drilling.
The main objectives of the Ranger
3 Deeps underground drilling
program were to:
• increase confidence in the
known mineralisation to allow
conversion to a mineral resource;
• understand the distribution
and abundance of deleterious
minerals such as carbonate;
• support the development of
prefeasibility level mine plans;
and
• explore those prospective areas
with less historical drilling,
particularly at the northern end
of the deposit.
… the scheduled
development of the Ranger
3 Deeps underground mine
will position ERA to take
advantage of an expected
medium-term recovery
in demand and prices for
uranium.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
18
OPERATING AND FINANCIAL REVIEW
(cid:83) The 185 metre long entrance portal for the Ranger 3 Deeps Exploration Decline
Analysis of drilling results has
significantly enhanced the
resolution of the geological model
and helped define the extent of the
Ranger 3 Deeps mineralised zone
(see Future Supply, page 22).
VENTILATION SHAFT
The six metre high and 5.5 metre
wide Exploration Decline tunnel is
continuously ventilated with fresh
air pumped to the working areas.
During 2014 work was completed
on the three metre diameter
vertical ventilation shaft extending
280 metres below the surface.
The ventilation shaft excavation
encountered unstable ground near
the surface in May and required
a modification in construction
techniques.
A corrugated steel cylinder – similar
to the material used to create the
decline entrance portal – was placed
vertically within the upper portion
of the ventilation shaft while the
surrounding ground was reinforced
with a mixture of cement and rock.
The ventilation shaft was successfully
commissioned in October.
RANGER 3 DEEPS
PREFEASIBILITY STUDY
The $57 million Prefeasibility Study
into the potential development of
the Ranger 3 Deeps underground
mine assessed the economic
viability of the proposed mine,
including the preferred mining
method and the expected
metallurgical performance and
production rates.
This work also included designs for
associated surface infrastructure
such as the power plant, cooling
facilities for underground air supply,
a paste plant for backfill operations,
and additional low-profile
ventilation shafts.
Environmental studies were
also undertaken in support of
the environmental assessment
process to address both Northern
Territory and Commonwealth
environmental requirements. These
studies examined a range of factors
associated with the proposed
underground mine across all
operational phases (construction,
operation and closure) including:
• radiation health and safety;
• water management;
• flora and fauna surveys;
• air quality;
• noise and vibration;
• hydrogeological assessment;
• cultural heritage;
• socio-economic assessment;
• transport; and
• closure planning.
As part of preparations for the
proposed underground mine
ERA’s core sorting plant has been
recommissioned to treat ore that
contains high carbonate content.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
19
OPERATING AND FINANCIAL REVIEW
The Prefeasibility Study has
identified long-haul open stope
mining with paste backfill as the
preferred mining technique. This
will require the construction of a
paste plant at the surface.
The study has also developed a
cost effective approach involving
reuse of processed tailings material
for the paste backfill operations
required as part of the preferred
stope and backfill mining technique.
The addition of cement to the wet
tailings mix provides the necessary
structural strength for use as paste
backfill. Reusing tailings in this
manner saves on backfill material
costs, returns the tailings to their
original underground location and
reduces the volume of tailings to be
placed in Pit 3.
The major activities contributing to
the Ranger 3 Deeps Prefeasibility
Study have been substantially
completed, on schedule and on
budget. ERA will undertake further
work to review key technical
assumptions and optimise the
development pathway. Subject
to satisfactory completion of this
additional work, it is expected that
the Board will consider progressing
to Feasibility Study in 2015.
REGULATORY APPROVAL
Regulatory approval for the Ranger
3 Deeps underground mine is
being pursued in accordance
with the Northern Territory
Environmental Assessment Act and
the Commonwealth Environment
Protection and Biodiversity
Conservation Act 1999.
The Northern Territory
Environmental Protection Agency
and the Commonwealth Department
of Environment have determined
that the proposed underground
mine requires assessment at the level
of Environmental Impact Statement
through a single assessment process.
The draft Environmental Impact
Statement for the Ranger 3 Deeps
underground mine was submitted
to the assessment agencies and the
public comment period commenced
on 3 October.
During the following ten-week
review period members of the
public and interested parties were
invited to comment on the project.
A series of public meetings and
information sessions were held in
Jabiru, Gunbalanya and Darwin
during the review period to raise
awareness of the project.
In addition, ERA held four
community information days from
June to September, and conducted
bus tours of the Ranger mine site,
at which information was provided
about the proposed mine.
During the public review
phase, hard copies of the draft
Environmental Impact Statement
were made available in Jabiru at the
ERA community office, the offices
of the Gundjeihmi Aboriginal
Corporation and the Northern Land
Council, and the West Arnhem
Regional Council.
Hard copies were also available in
Darwin at the Northern Territory
Library, the Northern Territory
Environment Centre, the Mines and
Energy Information Centre, and
offices of the Northern Territory
Environment Protection Authority
and Commonwealth Department of
the Environment.
Consideration of the submissions
received will form part of the process
for developing a supplementary
Environmental Impact Statement,
which is expected to be submitted to
the Northern Territory Environment
Protection Authority and the
Commonwealth Department of the
Environment in the first half of 2015.
More information about the draft
Environmental Impact Statement
approval process can be found at
the Department of Environment
website: 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
Exploration activities are inherently
uncertain. There is a risk that the
exploration activities undertaken
by ERA 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.
If the Ranger 3 Deeps resource
is not economically viable within
the current Ranger Section 41
Authority, an extension may be
sought. There is no guarantee that
an extension could be obtained.
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. The
ultimate cost of rehabilitation is
uncertain and while 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.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
20
OPERATING AND FINANCIAL REVIEW
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 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, the
granting of licences and other
tenements, the extension of mine life
and the approval of developments.
Capital and liquidity risks
The future liquidity and capital
requirements of ERA will depend
on many factors, including foreign
exchange rate, prices, costs,
resource and mining techniques.
In particular, if ERA wishes to
develop the Ranger 3 Deeps
underground mine, based on current
assumptions, ERA is likely to require
capital at that time. Any inability to
obtain sufficient capital would have
a material impact on ERA’s business
and financial performance.
Each year, the Company 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 the Company into the Ranger
Rehabilitation Trust Fund is then
delivered. The Trust Fund includes
both cash and financial guarantees.
The Company’s ability to access
bank guarantees can be influenced
by many factors including, cash
balance, future cash flows and
shareholder support. Guarantees
are generally renewed annually.
Should renewal not occur, additional
cash would be required to be
deposited into the Trust Fund.
Regulators and stakeholders
Regulatory approvals will be required
to commence any production from
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
unsatisfactory 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.
(cid:87) ERA General Manager Operations,
Tim Eckersley
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
21
OPERATING AND FINANCIAL REVIEW
ERA’s planning and operational activities
are built on a comprehensive water
management strategy based on industry
leading monitoring systems.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
22
FUTURE SUPPLY
Future supply
(cid:83) Underground Construction Supervisor, Ross Howard, at one of the refuge chambers in the Ranger 3 Deeps Exploration Decline
EVALUATION AND EXPLORATION
During 2014 ERA completed work
on the $120 million Exploration
Decline to enable close spaced
underground drilling of the
Ranger 3 Deeps mineral resource
to be undertaken. The major
activities contributing to the $57
million Prefeasibility Study into
the proposed Ranger 3 Deeps
underground mine were also
substantially completed (see
Operating and Financial Review,
page 18).
ERA has reviewed the Ranger 3
Deeps resource model and has
made appropriate adjustments to
the mineral resource statement.
The updated resource model
estimate is 12.2 million tonnes at
0.285% U3O8 equating to 34,761
tonnes of uranium oxide.
This compares to the previously
reported estimate of 11.9 million
tonnes at 0.274% U3O8 equating
to 32,620 tonnes of contained
uranium oxide.
During 2014, ERA also conducted
surface exploration drilling on the
Ranger Project Area at a cost of
$5.8 million (2013: $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 intersections were
encountered.
RANGER PROJECT AREA
RESERVES AND RESOURCES
During 2014, ERA processed
1,444 tonnes of uranium oxide.
Consequently, the Probable Ore
Reserves for Ranger decreased from
6,756 tonnes of uranium oxide to
6,206 tonnes of uranium oxide.
The depletion was partially offset
by a variance in the recovery of
uranium oxide (894 tonnes) from
stockpiled ores relative to the
uranium oxide predicted by the
stockpile resource model. During
the reporting period, all processed
ore was sourced from either run of
mine stocks or low grade stockpiles.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
23
FUTURE SUPPLY
For the same period, Ranger
Mineral Resources decreased by
3,623 tonnes of uranium oxide,
from 56,334 tonnes to 52,711
tonnes. The decrease was mainly
due to the placement of low grade
ores in Pit 3 as part of the initial
backfill process.
The table below sets out the
reconciliation of Ranger Ore
Reserves.
Ranger Ore Reserves
JABILUKA RESERVES AND
RESOURCES
The Jabiluka Mineral Lease (MLN1)
remains under long term care and
maintenance.
In accordance with the Long Term
Care and Maintenance Agreement,
development by ERA will not
proceed without the approval of
the Mirarr Traditional Owners.
RANGER ORE RESERVES RECONCILIATION
ORE RESERVES
Ranger Ore Reserves as at 1 January 2014
Depletion by processing (primary and laterite ores)
Favourable Stockpile model variance in Primary Stockpile
Favourable Stockpile model variance in Laterites
Ranger Ore Reserves as at 31 December 2014
*Rounding differences may occur
GOVERNANCE ARRANGEMENTS
AND INTERNAL CONTROLS
As a member of the Rio Tinto Group,
ERA applies the standards of the
Rio Tinto Ore Reserves Steering
Committee (ORSC) in the generation
and publication of Mineral Resources
and Ore Reserves. Rio Tinto has
established governance arrangements,
in which ERA participates, to support
this process.
The ORSC meets at least quarterly
and is chaired by the Rio Tinto Group
executive, Technology and Innovation.
It comprises senior representatives
from technical, financial and business
groups within the Rio Tinto Group.
The ORSC’s role includes setting
the standards and qualifications for
Competent Persons in accordance
with the JORC Code 2012 which
form the basis of Competent Person
appointment by ERA.
Rio Tinto’s Resource and Reserve
internal audit program is conducted
by independent external consulting
personnel in a program managed by
Rio Tinto Group Audit and Assurance
with the assistance of the ORSC.
Rio Tinto has continued the
development of internal systems and
controls to ensure compliance with
the JORC Code 2012 in all external
reporting including the preparation
of reported data by ERA’s Competent
Persons. As well as the establishment
of an enhanced governance process,
there have been a number of process
improvements and training initiatives
introduced by the ORSC over recent
years, including a web-based reporting
and sign-off database, annual
internal Competent Person reports
and Competent Person development
and training.
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.
URANIUM OXIDE
(U3O8 TONNES)*
6,756
(1,444)
736
158
6,206
Internal sign-off of Mineral Resources
and Ore Reserves for ERA is the
responsibility of the Chief Executive
and estimates are carried out by
Competent Persons as defined by the
JORC Code 2012. ERA’s Competent
Persons are all full time employees
of ERA.
In addition to the arrangements and
internal controls established by the
ORSC, the ERA Board oversees the
governance of resources and reserves.
This includes the annual review and
approval of the publicly reported
Ore Reserves and Mineral Resources
Statement.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
24
FUTURE SUPPLY
Ore Reserves and Mineral Resources Statement for 2014
ERA 2014 ORE RESERVES &
MINERAL RESOURCES
CUT-OFF GRADE –
STOCKPILE ORE 0.08% U3O8
CUT-OFF GRADE –
STOCKPILE ORE 0.08% U3O8
AS AT 31 DECEMBER 2014
AS AT 31 DECEMBER 2013
ORE (MT)
% U3O8
t U3O8
ORE (MT)
% U3O8
t U3O8
RANGER ORE RESERVES
Current Stockpiles
5.05
0.123
6,206
5.47
0.123
6,756
Ranger No. 3 Pit In situ
Proved
Probable
–
–
–
–
–
–
–
–
–
–
–
–
Sub-total Proved and Probable Reserves
5.05
0.123
6,206
5.47
0.123
6,756
Total Ranger No. 3
Stockpiles, Proved and
Probable Reserves
RANGER MINERAL RESOURCES
In Addition To The Above Reserve
5.05
0.123
6,206
5.47
0.123
6,756
CUT-OFF GRADE –
STOCKPILE RESOURCE 0.02% U3O8
UNDERGROUND INSITU RESOURCE
0.15% U3O8
CUT-OFF GRADE –
OPEN PIT IN SITU RESOURCE
0.02% U3O8
UNDERGROUND INSITU RESOURCE
0.15% U3O8
Current Mineralised Stockpiles
38.29
0.05
17,844
49.89
0.05
23,037
In situ resource (R3 Deeps)
Measured
Indicated
Sub-total Measured and Indicated
Resources
Inferred Resources
Total Resources
2.78
6.30
47.37
3.50
50.87
0.32
0.28
0.09
0.25
0.10
8,922
17,366
44,128
–
9.49
59.38
8,579
0.65
52,711
60.03
–
0.32
0.09
0.38
0.09
–
30,820
53,857
2,477
56,334
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
25
FUTURE SUPPLY
AS AT 31 DECEMBER 2014
CUT-OFF GRADE 0.20% U3O8
AS AT 31 DECEMBER 2013
CUT-OFF GRADE 0.20% U3O8
ORE (MT)
% U3O8
t U3O8
ORE (MT)
% U3O8
t U3O8
JABILUKA ORE RESERVES
Proved
Probable
–
13.80
Total Proved and Probable Reserves
13.80
JABILUKA MINERAL RESOURCES
In Addition To The Above Reserve
Measured
Indicated
Sub-total Measured and Indicated
Inferred Resources
Total Resources
Note: Ranger Ore Reserves and
Mineral Resources are reported in
accordance with the Australasian Code
for Reporting of Exploration Results,
Mineral Resources and Ore Reserves,
2012 Edition (JORC Code 2012). In
2013, Jabiluka Ore Reserves and
Mineral Resources were reported in
accordance with the Australasian Code
for Reporting of Exploration Results,
Mineral Resources and Ore Reserves,
2004 Edition (JORC Code 2004). On
the basis that there was no new data or
information available in 2014 that would
require the estimates to be updated,
Jabiluka Ore Reserves and Mineral
Resources continue to be reported
under the JORC Code 2004. Each of the
JORC Code 2012 and the JORC Code
2004 envisage the use of reasonable
investment assumptions, including the
use of projected long-term commodity
prices, in calculating reserve estimates.
As required by the Australian Securities
Exchange (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 2012 and the JORC Code
2004.
–
0.49
0.49
0.48
0.36
0.36
0.53
0.48
–
67,700
67,700
1,140
15,330
16,440
57,500
73,940
–
13.80
13.80
0.24
4.30
4.54
10.90
15.44
–
0.49
0.49
0.48
0.36
0.36
0.53
0.48
–
67,700
67,700
1,140
15,300
16,440
57,500
73,940
0.24
4.30
4.54
10.90
15.44
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 the above table is
sourced from the Energy Resources
of Australia Ltd (ERA) 2014 Annual
Statement of Reserves and Resources
which was released to ASX on
6 February 2014 and can be found at:
www.asx.com.au/asxpdf/20150206/
pdf/42wg9j5tpg0ksw.pdf. Neither
the information that relates to Ranger
and Jabiluka Mineral Resources or Ore
Reserves, nor the underlying resource
models, has changed since the ERA
2014 Annual Statement of Reserves and
Resources was disclosed to ASX. ERA
is not aware of any new information
or data beyond the updates already
provided to the market that materially
affects the Ore Reserves and Mineral
Resources estimate. All assumptions and
technical parameters underpinning the
estimates continue to apply and have
not materially changed.
The information in this report that
relates to Ranger and Jabiluka Mineral
Resources is based on information
compiled by geologists Stephen Pevely
(a full time employee of ERA) and
Greg Rogers (a full time employee of
ERA). The information in this report
that relates to Ranger and Jabiluka
Ore Reserves is based on information
compiled by mining engineer John
Murphy (a full time employee of
ERA). Stephen Pevely, Greg Rogers
and John Murphy are all members of
the Australasian Institute of Mining
& Metallurgy and 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 JORC Code 2012 and the
JORC Code 2004. Stephen Pevely, Greg
Rogers 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 2013 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 2014
26
MARKETS AND CUSTOMERS
Markets and customers
(cid:83) Plant Technician Brett Warhurst in the processing control room at Ranger
ERA sells its product – drummed
uranium oxide – to electric utilities
in Asia, Europe and North America.
These exports are subject to strict
safeguards and non-proliferation
conditions to ensure that Australian
uranium is only used for peaceful
purposes.
In April ERA and Rio Tinto
Uranium executed a new sales
and marketing agreement which
has seen production from ERA
and Rössing Uranium Limited
(a subsidiary of Rio Tinto plc)
combined to create a multi-sourced
marketing pool. The agreement
is now in effect and operating
successfully.
Under the agreement, Rio Tinto
Uranium purchases all uranium
oxide produced by ERA and Rössing
Uranium Limited to market and sell
to nuclear utility customers around
the world.
The price received by ERA for sales
into the combined pool reflects the
price received from customers by
Rio Tinto Uranium less an arms-
length marketing fee. Previously, Rio
Tinto Uranium provided marketing
services to ERA under an agency-
based arrangement with sales
contracts being entered into directly
between ERA and the customer.
Should the Ranger 3 Deeps
underground mine be developed
as planned, ERA’s long production
history and strong relationship
with its customer base will create
a platform for continuity of supply
and operations.
In 2014 ERA produced 1,165 tonnes
of uranium oxide (2013: 2,960
tonnes) and sold a total of 3,148
tonnes of uranium oxide (2013:
2,815 tonnes).
ERA’s average realised price in 2014
was $US49.50 per pound (2013:
$US53.92 per pound), which was
significantly higher than the spot
price over the course of the year.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
27
MARKETS AND CUSTOMERS
ERA focusses on long term
contracting with a variety of
pricing mechanisms in order
to capture the highest market
value for its product, and to
reduce its exposure to the
spot price, which historically
lags long term prices
India also has an ambitious program
to expand its nuclear power
generation, and this year saw
positive developments with regard
to the Australian Government
concluding a nuclear cooperation
agreement with India. While this
requires additional administrative
agreements to be negotiated and
concluded, it is a promising first
step towards ERA being able to
export uranium to India for use in
commercial reactors.
At Ranger, ERA’s current work
to develop the Ranger 3 Deeps
underground mine will position the
Company to take advantage
of expected future nuclear
power growth.
ERA focusses on long term
contracting with a variety of pricing
mechanisms in order to capture
the highest market value for its
product, and to reduce its exposure
to the spot price, which historically
lags long term prices.
Since the March 2011 tsunami and
accident at Fukushima, the global
uranium market continues to suffer
from reduced demand and excess
supply, resulting in depressed
prices. The spot price reached a
low of US$28.23 per pound in
mid-2014, and later recovered to
the US$35.50 per pound by
year-end, which represents only
a modest recovery above 2006
price levels.
While the Japanese reactor fleet of
54 units remains closed due to the
accident at Fukushima, the Japanese
Government and regulatory bodies
continue to work on a program to
restart reactors.
It is expected that three to four
reactors will be back on line in the
first half of 2015, and five to 10
restarted each year after that.
Continued production expansion
from existing mines, along with
secondary-supply disposition from
a variety of sources, has created a
substantial increase in supply during
a period of reduced demand.
Although these factors are
dampening price strength in the
short term, the medium and
longer term outlook for uranium
remains positive.
New reactor growth in China and
the planned restart of the Japanese
reactor fleet is expected to drive
growth from 2015 to 2025 which
is forecast to be higher than at any
period since the 1970s.
China will likely become the world’s
largest user of nuclear energy,
surpassing the United States of
America in the early part of the
next decade.
Mainland China has 21 nuclear
power reactors in operation and
27 under construction.
Planned additional reactors
include some of the world’s most
advanced, and will give China more
than a three-fold increase in nuclear
capacity to at least 58 gigawatts by
2020. This is expected to increase to
around 150 gigawatts by 2030.
World-wide there are 436
operating reactors, with 71 under
construction, and a further 174
planned. The majority of reactor
growth is occurring in Asia,
including India.
This growth is being driven by
energy security concerns and
the rapidly expanding power
requirements needed to sustain
regional economic growth, as well
as continued action on managing
air pollution associated with
coal fired power and reducing
greenhouse gas emissions.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
28
FUTURE SUPPLY
(cid:83) Pit 3 mining operations
prior to closure of the
mine at the end of 2012
(cid:88) Installation of the drainage
system in Pit 3, December
2014, to convert the
pit to receive tailings as
part of Tailings and Brine
Management program
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
29
FUTURE SUPPLY
Delivering on rehabilitation, ERA invested a
further $57 million on rehabilitation in 2014,
including the initial backfilling of Pit 3 with
more than 33 million tonnes of material.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
30
HEALTH AND SAFETY
Health and safety
Safety is a core value for ERA.
The team at ERA is committed to
zero harm.
To achieve the goal of zero
harm, ERA has established clear
accountabilities and systems,
designed to help employees,
contractors and managers take
personal responsibility for safe
behaviour.
ERA has a range of programs and
strategic approaches designed to
help new arrivals and experienced
workers alike maintain focus on safe
behaviour.
These programs and strategies are
supported by systems and processes
which provide a framework for
translating corporate goals into safe
work practices at business unit,
work team and individual levels.
ERA measures safety by the All
Injury Frequency Rate (AIFR). This is
a measure of all reportable injuries
– lost time injuries, restricted work
injuries and medical treatment cases
– per 200,000 hours worked.
Disappointingly, during 2014
there was a decline in ERA’s safety
performance compared to the
strong performance of 2013.
The AIFR was 1.27 (2013: 0.91).
ERA’s Lost Time Injury Frequency
Rate (LTIFR) per 200,000 hours for
2014 was 1.13 compared with
0.52 in 2013.
(cid:83) Emergency Services Officer Matthew Lynch
Medical treatment cases
Operator fell to the ground requiring treatment
Lost Time Injuries
Operator suffered injury to head when excavator rolled on its side
Maintainer fractured bone in hand while operating a drill
Operator injured hand in operating conveyor
Maintainer fractured thumb following impact from hammer
Field assistant rolled ankle while exiting caravan steps
Maintainer injured finger caught between belt and pulley
Operator injured elbow when metal lid fell onto arm
Contractor injured hand caught in container door
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
31
HEALTH AND SAFETY
AUDITS
ERA’s Health, Safety and
Environment Management System
includes the Water Management
and Radiation Management
Systems.
ERA’s integrated Health, Safety and
Environment Management System
provides certification to both ISO
14001 (the international standard
for environmental management
systems) and AS4801 (the
Australian standard for occupational
health and safety management
systems).
During 2014 the Health, Safety
and Environment Management
System was subject to independent
audit for the purpose of ensuring
compliance and recertification
to the relevant standards. As a
result, the Health, Safety and
Environment Management System
was recertified as compliant with
ISO 14001 and AS4801.
In addition to a series of
investigations and reviews
associated with the failure of
Leach Tank 1 in December
2013 (see Operations page 14)
ERA participated in range of
routine audits.
ERA participated in the annual
Government and Stakeholder Audit,
which monitors compliance with
government regulations and also
completed 13 government and
stakeholder inspections which take
place every four weeks throughout
the year.
SAFETY LEADERSHIP
Safety leadership is a core element
of ERA’s safety culture and involves
ongoing engagement with leaders,
employees and contractors on
safety issues, awareness and
training.
Safety leadership was a central
part of planning and delivery of
ERA’s operational activities in
2014, including the clean-up and
recovery operation associated
with the failure of Leach Tank 1,
the successful completion of the
underground Exploration Decline,
the initial backfill of Pit 3, and the
rock capping of Pit 1.
During 2014 ERA continued a
range of targeted safety campaigns
designed to raise awareness
and encourage safe behaviours
in relation to driving between
Darwin and Jabiru, prestart safety
planning for maintenance crews
and hydration and heat stress
management, particularly in the
lead up to the end of year wet
season.
The non-routine nature of work
associated with the demolition of
the damaged Leach Tank 1 and
the associated clean-up activities
required close attention to safety
inductions and management for
contractors.
During the year ten Critical Control
Management Plans (CCMPs) were
developed for the high and critical
risks in the ERA Health, Safety
and Environment Risk Register.
CCMPs systematically document
and address control measures to
manage risks including classified
plant, crane and electrical
competency of contractors, high
voltage switching, road travel and
working at heights.
PROCESS SAFETY
The introduction of the Process
Safety Improvement Action Plan
in 2014 provides a strong focus on
the integrity of key assets and the
culture of asset safety awareness.
The action plan and its
implementation are to be reviewed
on a quarterly basis by the
Commonwealth and Northern
Territory regulators.
The action plan builds on ERA’s
previous process safety review
activities, which include the
identification and analysis of
process safety hazards and a focus
on the effectiveness of critical
controls to prevent and mitigate
process safety incidents.
To achieve the goal of zero
harm, ERA has established
clear accountabilities and
systems, designed to help
employees, contractors and
managers take personal
responsibility for safe
behaviour.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
32
RADIATION MONITORING
Radiation monitoring
(cid:83) ERA Radiation Safety Advisor, Andrew Walcott, undertakes a radiation check
ERA’s Ranger mine radiation
monitoring program helps ensure
that radiation exposure to workers,
the public and the environment is
as low as reasonably achievable
(ALARA).
The radiation monitoring program
is supported by the ERA Radiation
Policy and a comprehensive
Radiation Management Plan.
These are designed to achieve the
responsibilities and performance
outcomes specified in ERA’s
overarching Health, Safety and
Environment Management System.
ERA’s Health, Safety and
Environment Management System
is certified to Australian (AS4801)
and international (ISO14001)
standards and was independently
audited and successfully recertified
in 2014.
ERA uses a variety of fixed and
personal monitoring systems to
assess radiation exposure.
Results from this monitoring
program for the first three quarters
of 2014 demonstrate that workers,
the public and the environment
were not exposed to unacceptable
levels of ionising radiation and all
results were well below regulatory
dose limits. Results for the fourth
quarter will not be known until
early in 2015.
The International Commission
on Radiological Protection (ICRP)
recommends limits 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.
The associated radiation exposure
limits (above natural background
and medical exposures) are:
• Members of the public: 1
millisievert (mSv) per annum; and
• Radiation workers: 20 mSv
per year over five years with
a maximum of 50 mSv in any
one year.
Results from ERA’s monitoring
activities are compared with these
ICRP limits.
Workers at ERA whose occupational
exposure to radiation may exceed
5 mSv per year are declared
‘designated’ workers and their
exposure is more stringently
monitored. In 2014, the designated
workgroups included Mine
Production, Mine Maintenance,
Process Production, Process
Maintenance and Electrical
Maintenance.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
33
RADIATION MONITORING
Continual monitoring throughout
the year helps ERA ensure that
doses remain at the lower end of
the spectrum for uranium workers,
as set out in the ICRP principles
of Justification, Optimisation and
Limitation.
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.
The total effective dose is the
sum of doses from three exposure
pathways: external gamma
radiation, inhalation of radon decay
products and inhalation of long
lived alpha activity in dust.
ERA provides occupational
radiation dose data for workers
at Ranger mine to the Australian
Government’s Australian National
Radiation Dose Register (ANRDR)
on a quarterly basis. The ANRDR
collects, stores, manages and
distributes radiation dose records
received by workers in the course
of their employment. The register
reflects the Australian Government’s
commitment to strengthen
occupational health and safety
requirements for individuals working
at uranium mining and milling sites.
On an annual basis, ERA also
provides a copy of personal dose
records to each designated worker.
This is in addition to designated
workers being able to obtain this
data from the ANRDR.
RESULTS
To ensure highest possible quality
control on radiation doses, the
results are reviewed internally
by ERA and externally 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
2014 will be reported in the 2014
Annual Radiation Protection and
Atmospheric Monitoring Report.
The 2014 report will be submitted
to stakeholders in March 2015
in accordance with the Ranger
Section 41 Authority. Accordingly,
only preliminary data for 2014 is
presented in this report.
The maximum and mean annual
radiation doses received thus far
in 2014 by designated and non-
designated workers are summarised
in the table below. The lower doses
in the third quarter for designated
workers are in line with the return
to normal operating conditions
after the plant-wide shutdown that
followed the leach tank failure in
December 2013.
The potential exposures to Jabiru
residents from the Ranger mine
activities are also monitored
throughout the year and are
calculated annually. The resulting
contribution from Ranger mine
remains very low in comparison to
both the public dose limit and the
natural background radiation level.
Historically the contribution from
Ranger mine has been, on average,
approximately 0.02 mSv (or 2 per
cent) of the 1.0 mSv member of
public dose limit and less than 1 per
cent of the natural background in
Australia of 2 – 3 mSv, (which varies
according to location).
RADIOLOGICAL ASSESSMENT
FOLLOWING LEACH TANK FAILURE
On 7 December 2013, Leach Tank
1 at Ranger mine failed, spilling
approximately 1,400 cubic metres
of slurry containing ground uranium
ore, water and sulphuric acid into
the processing plant area.
Following the leach tank failure
and throughout the subsequent
recovery and clean-up operations, a
series of investigations and reviews
were conducted. This included
a radiological assessment by the
Supervising Scientist.
RADIATION DOSE
DESIGNATED
WORKERS
NON-DESIGNATED
WORKERS
Q1 – Maximum (mSv)
Q1 – Mean (mSv)
Q2 – Maximum (mSv)
Q2 – Mean (mSv)
Q3 – Maximum (mSv)
Q3 – Mean (mSv)
1.74
0.52
1.47
0.37
1.09
0.23
0.84
0.41
0.51
0.09
0.40
0.15
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
34
RADIATION MONITORING
The Supervising Scientist’s
assessment was confined to the
potential impacts on human health
and the offsite environment,
including Kakadu National Park, as
a result of the tank failure.
The Supervising Scientist’s August
2014 report stated:
“Radiological assessment of
both the spill site and personal
dosimeters show that additional
radiation doses to workers involved
in the clean-up activities were low
and assessed to be of no concern to
human health.
“No increase in airborne
radionuclide concentrations as a
result of the incident was detected
at the Supervising Scientist
monitoring stations in Jabiru town
or at Jabiru East.”
(cid:83) Construction activities at Ranger
(cid:88) Jai Nadjamerrek entered an ERA
traineeship during 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
35
RADIATION MONITORING
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
36
REGULATORY FRAMEWORK
Regulatory framework
Uranium mining activities in
Australia are strictly regulated by
the Commonwealth and State or
Territory Governments.
The purpose of these regulations
is to ensure uranium mining
performance and compliance in a
range of critical areas, including
health and safety, mine safety,
safe management of toxic and
radioactive substances, waste
disposal, transport safety,
export controls, protection and
rehabilitation of the environment,
native title, exploration,
development, taxes and royalties,
labour standards and mine
reclamation.
International agreements designed
to prevent nuclear proliferation
also govern the mining and export
of uranium. Exports are subject
to strict safeguards and non-
proliferation conditions to ensure
that Australian uranium is only used
for peaceful purposes.
REGULATION OF ERA’S
OPERATIONS
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:
• Commonwealth Department of
Industry and Science;
• Northern Territory Department
of Mines and Energy;
• Commonwealth Government’s
Supervising Scientist;
• Northern Land Council;
• Alligator Rivers Region Advisory
Committee (including non-
government organisation
representatives); and,
• Alligator Rivers Region Technical
Committee (including non-
government organisation
representatives).
The Ranger and Jabiluka Minesite
Technical Committees 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, the
Northern Territory Department
of Mines and Energy, the
Commonwealth Department of
Industry and Science, and the
Commonwealth Supervising
Scientist.
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.
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 Commonwealth
Government’s Supervising Scientist,
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.
INTERNATIONAL AND
AUSTRALIAN CERTIFICATION
ERA maintains international
certification (ISO 14001) of its
Health, Safety and Environmental
Management System, which
includes the Company’s Water
Management System.
ERA also maintains Australian
certification (AS4801) of its
Health, Safety and Environment
Management System, including
the Ranger Radiation Management
System, and the new Process Safety
Improvement System.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
37
OVERVIEW
Sustainable
Development
Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABLE DEVELOPMENT REPORT 2014
38
CONTENTS
Contents
Overview .................................................................................................................... 40
Environment ............................................................................................................... 41
Land ........................................................................................................................... 45
Employment ............................................................................................................... 48
Community ................................................................................................................. 51
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
39
Due to the sensitive nature of the
surrounding environment, ERA strives for
safety leadership, environmental protection
and strong and enduring relationships with
all stakeholders.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
40
OVERVIEW
Overview
The area surrounding ERA’s operations 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 commitment to protect the
environment in 2014 was confirmed
by the Australian Government’s
Supervising Scientist, which conducts
extensive monitoring and research
programs.
ERA will continue to engage with
the Mirarr Traditional Owners,
local communities and all levels of
government to protect the natural
environment on which it operates
and maintain Jabiru as an important
regional centre, creating educational,
cultural, social and economic
development opportunities for local
people and future generations.
THE MIRARR
The Mirarr are Traditional Owners of
the lands on which ERA operates.
Mirarr country encompasses the
Ranger Project Area and the Jabiluka
Mineral 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 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 its current operations,
future projects and successful
rehabilitation.
(cid:84) Onsite water catchment
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
41
ENVIRONMENT
Environment
ERA is committed to protecting the unique environment
in which it operates.
Measures to protect the environment
include a wide range of preventative
and monitoring activities.
ERA has a particular focus on water
management and monitoring which
reflects the potential for extreme
rainfall associated with the top end
climate.
The Australian Government’s
Supervising Scientist monitors the
impact of uranium mining on the
environment and people in the
Alligator Rivers Region, including water
quality and aquatic biology indicators
in Magela Creek and other waterways
adjacent to the Ranger mine.
(cid:84) Superintendent Water
Management, Ben McTavish,
undertakes onsite testing
The Supervising Scientist uses a
structured program of audits and
inspections, in conjunction with the
Northern Territory Department of
Mines and Energy, the Northern Land
Council and the Gundjeihmi Aboriginal
Corporation, to supervise regional
uranium mining operations.
ERA’s monitoring results and the results
from the Supervising Scientist are made
available to the public.
During 2014, results from statutory
monitoring programs showed that ERA
continued to protect the surrounding
environment.
LEACH TANK INVESTIGATION
The Supervising Scientist conducted an
investigation into the environmental
impacts of the December 2013 failure
of Leach Tank 1.
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 Park, remained protected
during and following this event.
ERA’s containment systems are in place
to safeguard Kakadu National Park in
the event of plant or equipment failure
and the systems operated as designed
during the event.
The Supervising Scientist’s investigation
was one of four investigations
co-ordinated by a government-
appointed taskforce.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
42
ENVIRONMENT
The Water Management Plan sets
out the operational activities for the
full range of water management
activities across the Ranger mine site,
including water capture, storage,
supply, distribution, sampling, use,
treatment and disposal.
To ensure currency and to reflect
any changes to conditions on site,
the Water Management Plan is
updated every year and submitted to
regulatory authorities for approval.
Every two years ERA’s Health, Safety
and Environment Management
System is subject to independent
audit and certification to Australian
(AS4801) and international
(ISO 14001) standards.
WATER IS MANAGED ACCORDING
TO QUALITY
There are a number of different
classes of water within the Ranger
mine site: process water, pond
water, release water, potable water
and water including treatment plant
permeate or Brine Concentrator
distillate.
Each class of water requires a
different management approach:
• process water has been in
contact with uranium ore
during processing operations
and must be managed within
a closed system, and stored
in the Tailing Storage Facility
prior to treatment via the Brine
Concentrator;
The Supervising Scientist’s report
Investigation into the environmental
impacts of the leach tank failure at
Ranger uranium mine, December
2013 found that: “the leach tank
failure has not resulted in any
adverse impacts to human health
or the surrounding environment,
including Kakadu National Park.”
This Supervising Scientist’s
investigation also found that:
• radiation doses to workers
involved in the clean-up activities
were low and of no concern to
human health;
• there was no increase in airborne
radionuclide concentrations; and
• chemical and biological
monitoring in Magela Creek did
not detect any effects related to
the leach tank failure.
WATER
Water management is critical
to the success of ERA’s business
and environmental protection
objectives.
ERA operates in a tropical climate
that is characterised by extended
dry periods and high rainfall. These
extreme conditions pose challenges
for effective management of water
on the Ranger Project Area.
A key aspect of ERA’s approach to
water management is having the
flexibility and operational capability
to store and treat large volumes of
differing types of water based on
the quality of that water.
As a result, ERA’s operational and
planning activities are built on a
comprehensive water management
strategy based on industry leading
monitoring systems and significant
investment in infrastructure for
the storage, transfer and treatment
of water.
Over the past four years ERA has
successfully completed a range
of water management projects
including:
• construction of the $220 million
Brine Concentrator;
• a process water contingency
transfer pumping system from
the Tailings Storage Facility to
Pit 3;
• surface water and seepage
interception trenches around
stockpiles;
• increasing capacity of the Tailings
Storage Facility;
• the construction and
commissioning of a one gigalitre
capacity Retention Pond;
• use of continuous real-time
water quality monitoring
stations;
• increasing the network of
ground water monitoring bores
to over 200; and
• installation of over 7,000
prefabricated vertical drains
(wicks) across the Pit 1 tailings
area.
In addition, ERA continued
with water management works
associated with progressive
rehabilitation of Pit 1 and Pit 3
(see Operations page 15).
MANAGEMENT OF WATER
ERA’s water management
operations and planning activities
are governed by an overarching
Health, Safety and Environment
Management System.
The objectives for water
management described in the
Health, Safety and Environment
Management System are achieved
in practical terms through ERA’s
Water Management Plan.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
43
ENVIRONMENT
• pond water has been in contact
with stockpiled mineralised
material and operational areas
of the site, other than those
contained within the process
water system. Pond water is
held in the pond water system
comprising a series of sumps and
holding ponds prior to being put
through treatment plants;
• potable water is high quality
bore water used for drinking and
ablution. Water used in ablutions
is treated via septic tanks and
disposed of via transpiration
trenches;
• release water comprises clean
site run-off water collected in
purpose built storages, and
water that has been treated by
the Brine Concentrator or water
treatment plants to a quality
suitable for release;
• water treatment plant permeate
is pond water that has been
treated via ERA’s micro filtration
and reverse osmosis treatment
plants. Permeate is release
quality water and is either
irrigated on designated land
application areas during the dry
season, or released during the
wet season; and
• Brine Concentrator distillate is
process water which has been
treated by the Brine Concentrator.
This distillate is of extremely high
quality and like water treatment
plant permeate is considered
release quality water.
BRINE CONCENTRATOR
Construction of the $220
million Brine Concentrator was
completed in 2013. Process water
is heated to high temperatures
in the Brine Concentrator and
water that evaporates is cooled,
condensed and discharged as high
quality, clean distilled water (see
Operations, page 14).
Waste heat from the cooling circuit
is used to pre-heat process water
entering the Brine Concentrator to
reduce energy consumption.
With a potential maximum
production of up to 1.83 billion
litres of distillate per year, the Brine
Concentrator provides ERA with the
ability to manage the process water
inventories and manage the impacts
of heavy rainfall events.
This flexibility and control in
process water management will
play a key role in ERA’s progressive
rehabilitation activities.
During 2014 all distillate produced
met with the design specifications
for the Brine Concentrator. Veolia
Water Australia operates the Brine
Concentrator on an “operate and
maintain” basis on behalf of ERA.
The distillate is either discharged
to ERA’s constructed wetlands,
or irrigated onto land application
areas.
WATER MONITORING
ERA’s comprehensive water
monitoring system comprises over
200 groundwater bores across
the Ranger operational area and
13 continuous real-time water
quality sensing stations within local
waterways.
The water monitoring system helps
ensure that water is managed
in accordance with ERA’s Water
Management Plan, meets regulatory
requirements and provides
assurance to stakeholders through
the provision of accurate data.
The continuous real-time water
quality sensing stations are located
within the Magela and Gulungul
creek systems, upstream and
downstream of the Ranger mine.
In addition, there is an extensive
network of continuous real-time
monitoring stations throughout
ERA’s operational areas,
which assists with day-to-day
management of water inventories
and treatment processes.
Data from the water monitoring
system provides accurate details of
composition and flow rate changes
in surface water, ground water and
waterways.
This data is shared with members of
the Minesite Technical Committee,
including the Supervising Scientist,
and results are also available to the
public on ERA’s website
www.energyres.com.au.
The Supervising Scientist also
conducts independent monitoring
of waters upstream and
downstream of the Ranger mine
site. The results are published on its
website: www.environment.gov.au/
ssd/index.htm.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
44
ENVIRONMENT
The monitoring stations are
equipped with auto samplers that
collect water samples triggered by
in-stream events.
The Supervising Scientist Annual
Report 2013-2014 states that
the “water qualities measured in
Magela and Gulungul Creeks for
the 2013–14 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”.
INDEPENDENT SURFACE WATER
WORKING GROUP
In 2012 an Independent Surface
Water Working Group (ISWWG)
was established by ERA and the
Gundjeihmi Aboriginal Corporation
to undertake an independent
expert review of the surface water
management, monitoring, and
compliance systems associated with
release of water from the Ranger
mine site.
The ISWWG consisted of
representatives from ERA, the
Gundjeihmi Aboriginal Corporation,
the Supervising Scientist and the
Northern Land Council (NLC).
Professor Barry Hart (Water Science
Pty Ltd and Monash University)
was appointed as the Independent
Chair and Professor Mark Taylor
(Macquarie University) as an
Independent Science Advisor.
The ISWWG considered:
• 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, reporting, and
access to relevant data.
The outcome of the report and
the consensus agreed between
the parties delivered a watershed
agreement.
The main findings of the ISWWG
were that the current Ranger mine
surface water management and
regulatory systems are of a very
high standard, and that an agreed
action plan was desirable to ensure
that the existing standard was
maintained.
A technical working group was
established as a sub-group of
the Ranger Minesite Technical
Committee in February 2013
to review and implement the
technical and regulatory aspects
of relevant recommendations.
This group is also the forum for
reporting to stakeholders on the
progress in addressing the ISWWG
recommendations.
Of the 15 recommendations:
• Nine have been addressed
and those that are ongoing
are being embedded into
management plans or existing
review processes. These are
the recommendations on ERA
water monitoring, reporting and
management and staff training,
as well as two recommendations
on the Supervising Scientist’s
monitoring program.
• Five recommendations
are in progress. Three
recommendations relating to
the updating of the compliance
monitoring program are
nearing completion and two
recommendations regarding the
review and reintroduction of
past sediment and bushtucker
monitoring are advanced and in
final discussions.
• One recommendation
regarding the updating of
the Ranger Authorisation is
awaiting completion of other
recommendations.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
45
LAND
Land
REHABILITATION PROGRESSING AT JABILUKA
The rehabilitation of the land on the Jabiluka Mineral
Lease previously occupied by the Interim Water
Management Pond continued throughout 2014.
Following the dismantling of the
pond and the removal of the pond
liner in 2013, the pond location
and surrounding areas have been
revegetated with species endemic to
the surrounding environment.
These works are part of ERA’s
ongoing rehabilitation program and
have involved input from the Mirarr
Traditional Owners to ensure that
the land is rehabilitated in a culturally
appropriate manner.
During 2014 visits to the site were
undertaken by representatives of
Gundjeihmi Aboriginal Corporation
and the Northern Land Council with
video and photographs taken at each
visit to share with the Mirarr Traditional
Owners who provide cultural advice on
different aspects of the project.
Site surveys confirm that around 48
per cent of the 3,585 locally native
tubestock seedlings planted in 2013
survived the dry season and are now
well established.
Given the harsh conditions experienced
through the dry season this is regarded
as a satisfactory survival rate.
This year a further 4,679 tubestock
seedlings were planted on the site
in November and December to
complete the revegetation, with weed
management activities undertaken to
ensure recently disturbed areas remain
weed-free.
Plants selected for the revegetation
program are propagated by the
Indigenous owned and operated
Kakadu Native Plants nursery, and
grown from hand collected seeds.
Revegetation techniques used at the
Jabiluka site are based on successful
management strategies developed
through ERA’s long term trial landform
project which covers an eight hectare
site at Ranger.
WEED MANAGEMENT
ERA carries out regular weed control
activities on the Ranger Project Area
and Jabiluka Mineral Lease. Activities
are guided by ERA’s weed management
program which targets 13 priority
species including Annual Pennisetum,
Mission Grass and Rattlepod.
The weed season runs from October
to May. During the 2013-2014 weed
season new initiatives included the use
of residual herbicide which eliminates
the surface weed and binds to soil
particles to prevent weed germination
over an extended period.
Annual weed monitoring shows
that ERA’s program has resulted in
a reduction of 29 hectares of weed
infestation in 2013-2014, which is a
42 per cent reduction over the Ranger
Project Area.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
46
LAND
(cid:83) The Jabiluka Interim Water
Management Pond
(cid:88) The site at completion of
the revegetation program
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
47
LAND
The revegetation program at Jabiluka was
completed with more than 8,000 native
seedlings planted. The plants were grown from
hand collected seeds.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
48
EMPLOYMENT
Employment
ERA’s preparation for proposed underground mining
operations saw a further 25 per cent reduction in
workforce numbers during 2014.
The completion of the Pit 3 initial
backfill has reduced mining
operational requirements and the
continuation of the ERA Business
Review cost saving program continued
to rationalise contractor use.
A highly successful redeployment
programme over the last two
years has helped over 70 affected
employees successfully find
employment elsewhere in Rio Tinto
Group operations.
As at 31 December 2014, ERA’s total
workforce was 415 people, comprising
390 staff and 25 contractor positions
across a range of full-time, part-time
and secondment arrangements.
This compares with 519 full-time
equivalent positions at the same time
last year, and 639 at the end of 2012.
A significant portion of workforce
reductions was associated with the
mining workforce, which reduced
from 140 to 55 in 2014.
ERA also directly employed nine
apprentices, three school-based
apprentices, and three Indigenous
trainees.
At year end Indigenous employment
was approximately 12 per cent of
employees (2013: 16 per cent).
ERA has a target of 20 per cent
Indigenous employment, however
the closure of Pit 3 and the
completion of the initial backfill
project has contributed to a decline in
employment opportunities associated
with mining activities.
(cid:84) Members of the Ranger 3 Deeps
Exploration Decline team
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
49
EMPLOYMENT
ERA’s female employment
participation also remained steady
during 2014 at 18 per cent of
employees (2013: 18 per cent).
ERA also provides flexible work
arrangements for employees
to help balance work and life
commitments.
The average rolling staff turnover
in 2014 was 38.61 per cent
(2013: 29.25 per cent), in part
reflecting changes to mining
workforce needs.
INDIGENOUS EMPLOYMENT
As a major employer in Jabiru
and the West Arnhem region ERA
has a strong focus on Indigenous
employment.
ERA’s Indigenous employees are
employed in positions at many
levels within the Company, from
operations to human resources to
leadership roles.
At 31 December 2014, there were
a total of 47 Indigenous employees,
representing 12 per cent of
employees (2013: 16 per cent).
ERA employed three Indigenous
trainees in 2014. Indigenous
trainees are paired with workplace
mentors. The Mentoring Program
for Indigenous trainees is part of
ERA’s Indigenous Employment
Strategy. It includes flexible work
arrangements, workplace literacy
and numeracy training and support
for students from local communities
in work experience and school-
based apprenticeships.
Looking ahead, ERA’s Indigenous
employment focus will continue to
be on retention.
INDIGENOUS ENTERPRISE
DEVELOPMENT
During 2014 ERA continued to work
with the Gundjeihmi Aboriginal
Corporation and local businesses as
part of a new Indigenous Enterprise
Development Scheme introduced
in 2013.
The program also identifies
potential employment needs among
local businesses.
This year’s participants successfully
completed the program and gained
nationally recognised accreditation
through a Certificate II in Resource
Infrastructure: Work Preparation.
The scheme seeks to identify and
develop employment and training
opportunities for members of local
Indigenous communities.
As an example, local people have
an opportunity to participate
in an Indigenous Revegetation
Workforce, which can be engaged
to carry out regional revegetation
activities, such as progressive
rehabilitation activities at ERA,
weed management, and fire
monitoring.
As part of Indigenous Revegetation
Workforce training, the trainees
will be working towards nationally
recognised skills accreditation
through a Certificate III in Land
Management.
PRE-EMPLOYMENT PROGRAM
Local businesses, training providers
and ERA continued to support the
Pre-employment Program, designed
to assist school leavers and other
local people seeking to enter the
workforce or find new employment.
In 2014 eight women participated
in the Pre-employment Program,
seeking to develop skills to support
plans to work within Kakadu
National Park or the local tourism
and hospitality industry.
The program helps local people
develop additional skills needed
to get a job, such as getting a
driver’s licence, learning first aid,
or developing experience with
common work-related equipment.
EDUCATION PARTNERSHIP
In 2014 ERA continued working
with the West Arnhem College
on the award winning Education
Partnership.
West Arnhem College was
established in 2010 and is made up
of two school communities – Jabiru
Area School, which is located on
Mirarr land in Kakadu National Park,
and Gunbalanya School, located
in West Arnhem Land across the
East Alligator River in the Northern
Territory.
The Education Partnership provides
quality education and training
opportunities which lead to real
employment and career options for
students and families in the West
Arnhem region.
It provides an integrated program
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 employees, and support for
school-based education programs
involving resource industry
development.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
50
EMPLOYMENT
In 2014 the partnership focused
on two main areas of cooperation
which were supporting the
curriculum outcomes at the schools
and providing opportunities for
applied learning. Highlights have
included a total of seven tailored
school-based apprenticeships and
traineeships and the largest number
of indigenous students to date.
The program has enabled students
to obtain Certificate II qualifications
while still enrolled in school at the
West Arnhem College.
(cid:84) School-based apprentices Brock Hope,
Daniel De Vreede and Blake Hughes
CULTURAL AWARENESS
New employees and contractors
working at ERA are introduced to
the unique cultural, environmental
and historical vales of the Kakadu
region and the Mirarr Traditional
Owners through ERA’s Cultural
Awareness Program.
The program is an important
element of ERA’s induction
processes and ensures that new
arrivals to the business are able to
develop a greater understanding
of the context and culture in which
they operate, and to develop
understanding and respect for local
communities and culture.
This program is particularly
important with the anticipated
increase in the use of contract fly-in
fly-out workers associated with
the proposed underground mining
operation.
The program is delivered in
partnership with the Gundjeihmi
Aboriginal Corporation
representing the Mirarr Traditional
Owners. During the year 46
new employees and long-term
contractors participated in cultural
awareness training.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
51
COMMUNITY
Community
ERA is an important and active part of the local
community, and makes a significant contribution to the
regional and Northern Territory economies.
In particular, ERA makes a major
contribution to Jabiru, one of the
largest regional centres within the
Northern Territory.
Through its community relations
program 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.
In 2014, ERA spent more than
$120,000 on partnerships and
sponsorships, providing support for
local schools and students, sport, the
arts, regional festivals, local business,
and community health and child care.
RELATIONSHIP WITH MIRARR
TRADITIONAL OWNERS
The Gundjeihmi Aboriginal
Corporation represents the Mirarr
Traditional Owners in discussions and
negotiations with ERA on a range of
matters of interest to both parties.
These discussions and negotiations
encompass matters such as 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.
The Mirarr Traditional Owners were
represented via the Gundjeihmi
Aboriginal Corporation on the
taskforce established by Northern
Territory and Australian Governments
to oversee the regulatory response
to the failure of Leach Tank 1 (see
Operations, page 14).
ERA recognises that the failure of the
leach tank in December 2013 was of
great concern to the Mirarr Traditional
Owners and appreciates their
continued dialogue, participation and
input into the clean-up and recovery
operation.
(cid:84) ERA continued its sponsorship
of the Kakadu Triathlon in 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
52
A number of formal structures
are in place to ensure that the
Gundjeihmi Aboriginal Corporation
and ERA are able to meet
regularly, share information and
create opportunities for ongoing
engagement and collaboration.
During 2014, the newly formed
Relationship Committee met
on a regular basis to promote
information sharing and
collaboration, and reach agreement
on opportunities for increasing
local Aboriginal participation in
business development, training and
employment.
In addition, the Gundjeihmi
Aboriginal Corporation and ERA are
represented on the Kakadu West
Arnhem Social Trust (KWAST) and
contribute funds on an annual basis.
KWAST was founded in February
2013 as a charitable trust by Yvonne
Margarula, senior Mirarr Traditional
Owner, to share some of the royalty
payments flowing from the Ranger
mine to address the disadvantage
of Indigenous people in the Kakadu
region. A particular focus is on
achieving a long-term reduction
in systemic intergenerational
disadvantage.
The multi-million dollar trust is
supporting initiatives that deliver
long-term, positive benefit to the
local community, such as Children’s
Ground, which is delivering
culturally appropriate education,
health and allied support services
in Jabiru and outstations across
Kakadu. Other projects supported
by KWAST include the Culture
First Program at Jabiru Area School
which engages students with
culturally sensitive learning and the
continuation of support for the
Gunbang Action Group’s alcohol
management coordination program.
The Mirarr Traditional Owners
are also represented via the
Gundjeihmi Aboriginal Corporation
on the Closure Criteria Committee
Working Group and the Ranger
Minesite Technical Committee,
and are participating in
rehabilitation planning, including
the rehabilitation and revegetation
of the site of the former Jabiluka
Interim Water Management Pond
(see Land, page 45).
ERA and the Gundjeihmi Aboriginal
Corporation continue to collaborate
on town governance, housing, local
and Northern Territory Government
engagement, infrastructure and
local business development.
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.
The equivalent of 4.25 per cent
of Ranger sales revenue is paid to
Northern Territory based Aboriginal
organisations, including the
Gundjeihmi Aboriginal Corporation.
A further 1.25 per cent of Ranger
sales revenue is paid to the
Commonwealth and distributed to
the Northern Territory Government.
In 2014, ERA’s royalties totalled
$15.4 million (2013: $18.4 million).
As ERA is now processing low
grade 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 supports efforts to recognise
the Mirarr as traditional landowners
of the long-running Jabiru native
title claim area, which includes the
land on which the town of Jabiru is
located.
Legislation that allows for the
inclusion of Jabiru and surrounding
lands in Schedule 1 of the Land
Rights Act (Northern Territory)
1976 has been introduced into the
Commonwealth Parliament.
This is a significant step towards
formal recognition of Mirarr title
to land, which is central to the
governance arrangements and long
term future for Jabiru.
ERA will continue to support
the finalisation of arrangements
required to transfer these lands
from the Commonwealth to the
Kakadu Aboriginal Lands Trust.
This includes agreement on
the detail of a new town lease
between the Gundjeihmi Aboriginal
Corporation and the Northern
Territory Government.
While the legislative framework
is in place, the detail of the lease
arrangement between the Northern
Territory Government and the
Traditional Owners is still being
negotiated.
(cid:88) Superintendent Water Management,
Ben McTavish, is part of ERA’s Health
Safety and Environment team
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
53
COMMUNITY
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
54
SUSTAINABLE DEVELOPMENT COMMUNITY
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 an 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 educational and sporting
opportunities for young people.
During 2014 ERA maintained a local
presence at the ERA Community
Office in Jabiru, provided formal
quarterly business updates with
key stakeholders and community
groups in Jabiru and held four
community information days.
RANGER 3 DEEPS SOCIAL IMPACT
ASSESSMENT
The Ranger 3 Deeps Social Impact
Assessment (SIA) examined the
flow-on effects of an underground
mining operation on stakeholders
in the local Jabiru community, and
in the wider Alligator Rivers Region.
It also assessed impacts across
the Northern Territory and at the
national level.
As part of the draft Environmental
Impact Statement (see Future
Supply, page 22), the assessment
identified potential positive and
negative social impacts of the
proposed underground mine. Areas
considered included governance,
equity in benefits, future planning
and cultural heritage.
The SIA found that the proposed
underground mining operation “has
the potential for both positive and
negative impacts, but overall, has
greater potential to realise positive
social outcomes”.
Benefits included:
• 180 – 280 new jobs;
• maintaining economic
contribution (directly and
indirectly);
• supplementary production
delivering additional revenue;
• support to local and regional
business; and
• maintaining Jabiru population,
maintaining services
infrastructure and community
programs.
Risks included:
• additional fly in fly out
employees creating further
demand on health services;
• perceptions of health and well-
being impacts leading to stress,
such as from concerns over
water management or worker
health; and
• continuation or worsening of
existing negative impacts such
as issues linked to mine revenue
(royalties) and social cohesion,
and the well-being of Mirarr
Traditional Owners.
ERA proposes to maximise the
opportunities presented and
manage potential risks through a
Social Impact Management Plan.
The SIA has been provided to the
Commonwealth and Northern
Territory governments, and made
publicly available as part of the draft
Environmental Impact Statement
documents seeking approval for the
proposed underground mine.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
55
SUSTAINABLE DEVELOPMENT COMMUNITY
COMMUNITY PARTNERSHIPS
ERA’s community partnership and
sponsorship program provides
support for local community-based
events, schools and students, sport,
the arts and regional festivals.
The Mahbilil Festival celebrates
the diversity of the region
through music, dance, art and
entertainment. ERA was involved as
a major sponsor and also through
its community information stall.
COMMUNITY SUPPORT
In 2014 ERA supported the Kakadu
Triathlon in Jabiru in May and
continued its sponsorship of the
National Indigenous Music Awards
in August.
A feature of community information
provided this year included details
about ERA’s proposals for an
underground mine, including
the promotion of opportunity
to comment on the draft
Environmental Impact Statement.
The National Indigenous Music
Awards celebrate traditional
and contemporary artists from
around the country, with female
artist Jessica Mauboy taking out
consecutive National Artist of the
Year awards.
Over 107 people took part in
the successful Kakadu Triathlon,
organised by ERA and Darwin
Triathlon as a fundraiser for
CareFlight. Raising more than
$8,000, the triathlon involved
a 10 kilometre bike ride, a 2.5
kilometre run, and a 250 metre
swim in the Jabiru town pool. The
Kakadu Triathlon was named as
Community Event of the Year in the
2014 Australia Day Awards.
ERA was one of 27 triathlon
sponsors, along with West Arnhem
Regional Council, West Arnhem
College, Veolia Water, Spotless,
Jabiru Fire Station and Northern
Territory Police.
COMMUNITY INFORMATION
DAYS AND MINE TOURS
During 2014 ERA held four
Community Information Days and
a series of organised site visits,
providing an opportunity for over
600 local community members,
tourists and other groups to visit
Ranger mine.
The information days involve setting
up a free barbecue and information
stall in Jabiru for the day, and
running regular tours out to the
mine site.
ERA staff explained the mine’s
operations, work being done to
protect the environment, and
also discussed ERA’s underground
mining proposals and opportunities
to have input into the draft
Environmental Impact Statement.
The positive response, particularly
in relation to ERA’s operations,
revealed a genuine interest among
many members of the public to
learn about ERA.
This support is delivered in a
variety of ways including direct
funding, community partnerships,
in-kind support and donations of
equipment and resources.
ERA sponsors the George
Chaloupka Fellowship program,
which supports research and
conservation of Aboriginal rock art
located in Arnhem Land Plateau
region in the Northern Territory,
with the fifth Fellow recently
commencing.
The $28,000 Fellowship was
awarded to Australian National
University PhD graduate, Dr Ian
Moffat, whose research project
involves use of geophysical analysis
techniques to locate, record and
date rock art.
The George Chaloupka Fellowship
is run by the Museum and Art
Gallery of the Northern Territory
Foundation.
Previous recipients have increased
knowledge and understanding of
significant Aboriginal rock art sites
across the Arnhem Land Plateau,
including the Jawoyn site Little
Barra, the East Alligator River, and
the Main Gallery of Deaf Adder
Creek, near Nourlangie Rock.
ERA continued its long-running
support for the principal community
and cultural event for Jabiru and the
West Arnhem region, the popular
Mahbilil Festival held in Jabiru in
September.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
56
Financial
Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
57
CONTENTS
Contents
Director’s Report ........................................................................................................ 58
Auditor’s Independence Declaration ........................................................................... 84
Corporate Governance Statement ............................................................................... 85
Statement of Comprehensive Income .......................................................................... 90
Balance Sheet ............................................................................................................. 91
Statement of Changes in Equity .................................................................................. 92
Cash Flow Statement .................................................................................................. 93
Notes to the Financial Statements ............................................................................... 94
Directors’ Declaration ............................................................................................... 127
Independent Auditor’s Report ................................................................................... 128
Shareholder Information ........................................................................................... 130
2014 ASX Announcements ....................................................................................... 132
Ten Year Performance ............................................................................................... 133
Index ........................................................................................................................ 134
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
58
DIRECTORS
Director’s Report
Directors
Mr Peter McMahon
CHAIRMAN
BEcon(Hons), MEcon, MSc
Ms Andrea Sutton
CHIEF EXECUTIVE
BE (Hons) Chemical,
GradDipEcon, GAICD
Mr Bruce Cox
NON-EXECUTIVE
DIRECTOR
BCom, CPA, MBA, GAICD
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.
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 20 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.
Appointed as a Director in
November 2014. Mr Cox is
currently the President and
Chief Executive Officer of
Pacific Aluminium and is a
member of Rio Tinto Alcan’s
Executive Committee. Mr
Cox has more than 33 years’
experience with Rio Tinto and
BHP, and prior to his current
role was Managing Director
of Rio Tinto Diamonds.
Mr Cox’s career has spanned
the steel, platinum, copper,
iron ore and diamond
commodity sectors and
he has lived in Australia,
Zimbabwe, Chile, the United
Kingdom and the United
States. Mr Cox is a CPA,
Graduate of the Australian
Institute of Company
Directors and has a Bachelor
of Commerce and Masters of
Business Administration.
Ms Joanne Farrell
NON-EXECUTIVE
DIRECTOR
BSc, Grad Dip Business
Management
Appointed as a Director
in June 2014. Ms Farrell is
currently the Global Head of
Health, Safety, Environment
and Communities (HSEC)
for Rio Tinto and is
responsible for leading
the team that provides
policy, standards guidance
and governance of HSEC
matters for the Rio Tinto
group of companies.
Ms Farrell has held a
number of roles in 27 years
with Rio Tinto, including in
the Iron Ore, Aluminium,
Diamonds, Exploration and
Energy groups. She brings
extensive experience in
HSEC, human resources,
organisational effectiveness,
communications and
external relations.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
59
DIRECTORS
Directors
Dr Helen Garnett
INDEPENDENT NON-
EXECUTIVE DIRECTOR
BSc(Hons), PhD, PSM, FTSE, FAICD
Mr Peter Taylor
NON-EXECUTIVE
DIRECTOR
BA, BSc, LLB, LLM, FAICD
Mr John Pegler
INDEPENDENT NON-
EXECUTIVE DIRECTOR
BE (Mining), MAusIMM, MAICD
Mrs Helen Newell
NON-EXECUTIVE
DIRECTOR
BCom (Hons), MBA, GAICD
Appointed as a Director
in November 2012. Mrs
Newell resigned as a
Director in June 2014.
Mrs Newell is currently
Global Head of Risk, Rio
Tinto, having previously
held the role of 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.
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
of WDS Ltd and CS Energy
Limited. He is a former
Director and Chairman of
Bandanna Energy Limited,
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.
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, a non-executive
director of ABM Resources
NL, Chair of the Australian
Centre for Plant Functional
Genomics, Chair of the
Museum and Art Gallery, NT
Foundation, and Director of
Sugar Research Australia.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
60
EXECUTIVE COMMITTEE
Executive Committee
Ms Andrea Sutton
CHIEF EXECUTIVE
BE (Hons) Chemical,
GradDipEcon, GAICD
Mr James May
CHIEF FINANCIAL
OFFICER
BA (Hons) FCA
Mr Steeve Thibeault
CHIEF FINANCIAL
OFFICER AND COMPANY
SECRETARY
BA (Accounting, Finance)
Mr Tim Eckersley
GENERAL MANAGER,
OPERATIONS
B.Sc. Agric (Hons)
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 20 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.
Mr May was appointed
as Chief Financial Officer
in June 2014 and brings
financial, accounting and
business development
experience to ERA. Mr
May has over 14 years’
experience in finance
roles in the energy and
extractive resources sector.
Prior to joining ERA, Mr
May held various finance
and corporate roles within
Rio Tinto.
Mr May is a Chartered
Accountant through the
Institute of Chartered
Accountants in England
and Wales.
Mr Thibeault was
appointed as Chief
Financial Officer in July
2009 and Company
Secretary in 2009. He
resigned from both
positions on 30 May 2014.
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.
Mr Eckersley was appointed
as General Manager
Operations in September
2012. Over the last 21
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.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
61
EXECUTIVE COMMITTEE
Executive Committee
Dr Greg Sinclair
GENERAL MANAGER,
TECHNICAL AND MAJOR
STUDIES
BAppSc (Chemistry), PhD,
FAusIMM
Dr Sinclair was appointed as
General Manager Technical
and Major Studies in May
2007. Dr Sinclair has over
29 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 Alan Tietzel
CHIEF ADVISOR
AGREEMENTS
BA, BCom, Dip Ed MBA
Mr Thomas Wilcox
COMPANY SECRETARY
AND LEGAL COUNSEL
LLB, BCom
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.
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.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
62
DIRECTORS’ REPORT
Meetings of Directors
The number of Directors’ and committee meetings held and the number of meetings attended by each of the Directors of the Company
during the financial year is shown below:
DIRECTORS MEETINGS
AUDIT AND RISK
COMMITTEE MEETINGS
REMUNERATION
COMMITTEE MEETINGS
OTHER COMMITTEE
MEETINGS
HELD ATTENDED
HELD ATTENDED
HELD ATTENDED
HELD ATTENDED
13
13
13
13
13
6
7
1
13
12
13
11
13
5
7
1
4
4
-
-
4
-
-
-
4
4
-
-
4
-
-
-
3
3
-
-
3
-
-
-
3
3
-
-
3
-
-
-
2
2
1
-
1
-
-
-
2
2
1
-
1
-
-
-
DIRECTOR
P McMahon
H Garnett
A Sutton
P Taylor
J Pegler
H Newell1
J Farrell2
B Cox3
Note 1
Note 2
Note 3
Resigned as a Director on 11 June 2014.
Appointed as a Director on 11 June 2014.
Appointed as a Director on 27 November 2014.
Ms Sutton was invited to Audit and Risk Committee meetings and attended all such meetings held during the year.
Interests of Directors
The interests of each Director in the share capital of the Company and its related body corporates as at 31 January 2015 are shown
below:
ENERGY RESOURCES
OF AUSTRALIA LTD
ORDINARY SHARES
42,500
-
-
-
-
-
-
-
RIO TINTO LIMITED
ORDINARY SHARES
RIO TINTO LIMITED
OPTIONS IN
ORDINARY SHARES
RIO TINTO LIMITED
CONDITIONAL
INTERESTS IN
ORDINARY SHARES
18,405
-
9,211
35,007
6,331
19,430
5,395
33,078
-
-
2,888
7,343
-
8,090
8,111
-
-
-
9,731
12,939
-
29,302
39,189
-
DIRECTORS
P McMahon
H Garnett
A Sutton
P Taylor
J Pegler
J Farrell
B Cox
D Smith1
Note 1
Appointed as a Director on 27 January 2015.
62
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
63
DIRECTORS’ REPORT
Remuneration report
The Remuneration Report is set out under the following main
headings:
A.
(cid:37).
C.
D.
(cid:40).
(cid:41).
(cid:42).
(cid:37)oard oversight of remuneration
(cid:51)rinciples used to determine non(cid:16)e(cid:91)ecutive Directors(cid:182)
remuneration
(cid:51)rinciples used to determine e(cid:91)ecutive remuneration
Details of remuneration
(cid:40)(cid:91)ecutive 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.
A
(cid:37)oard oversight of remuneration
The Remuneration Committee has responsibility to review:
(cid:135)
remuneration framework and policies (cid:11)including key
performance indicators) for the Company’s senior
e(cid:91)ecutives(cid:30)
remuneration and performance of the Company’s senior
e(cid:91)ecutives(cid:30)
remuneration of the Company(cid:182)s non(cid:16)e(cid:91)ecutive directors(cid:30) and
remuneration disclosures made by the Company.
(cid:135)
(cid:135)
(cid:135)
The Remuneration Committee Charter is available at the
Corporate (cid:42)overnance section of (cid:40)RA(cid:182)s website.
B
Principles used to determine non-
e(cid:91)ecutive Directors(cid:182) remuneration
(cid:41)ees and payments to non(cid:16)e(cid:91)ecutive Directors re(cid:192)ect the
demands which are made on(cid:15) and the responsibilities of(cid:15) the
non(cid:16)e(cid:91)ecutive Directors. The Remuneration Committee will
review and make recommendations to the (cid:37)oard regarding non(cid:16)
e(cid:91)ecutive Directors(cid:182) remuneration. These fees are comprised
of a base fee and any fees payable to non(cid:16)e(cid:91)ecutive Directors
for their membership on established committees of the (cid:37)oard.
(cid:40)RA does not pay retirement or post(cid:16)employment benefits to
non(cid:16)e(cid:91)ecutive Directors(cid:15) however(cid:15) statutory superannuation
contributions are paid to non(cid:16)e(cid:91)ecutive Directors. (cid:44)n addition(cid:15)
from time to time(cid:15) the (cid:37)oard may approve that non(cid:16)e(cid:91)ecutive
Directors receive additional fees for services provided outside the
established committee processes.
The following principles are applied in determining the
remuneration of non(cid:16)e(cid:91)ecutive Directors:
(cid:135)
(cid:135)
(cid:135)
the responsibilities of and time spent by the non(cid:16)e(cid:91)ecutive
Directors on the affairs of (cid:40)RA(cid:15) including preparation time(cid:30)
acknowledgement of the personal risk borne as a Director(cid:30)
comparison with professional market rates of remuneration
to remain competitive with the market having regard to
(cid:135)
companies of similar si(cid:93)e and comple(cid:91)ity(cid:30) and
the desire to attract Directors of a high calibre with
appropriate levels of e(cid:91)pertise and e(cid:91)perience.
At the 200(cid:27) Annual (cid:42)eneral Meeting(cid:15) shareholders resolved
to amend the Constitution of the Company to provide that the
aggregate remuneration for non(cid:16)e(cid:91)ecutive Directors of (cid:40)RA
would be not more than (cid:7)(cid:27)00(cid:15)000 per annum. At the 201(cid:23)
Annual (cid:42)eneral Meeting(cid:15) the 2013 Remuneration Report was
approved with (cid:28)1.2(cid:26) per cent of shareholders who cast a vote(cid:15)
voting in favour (cid:11)voting comprised 3(cid:25)3(cid:15)(cid:27)3(cid:26)(cid:15)(cid:26)(cid:25)5 votes (cid:181)for(cid:182) the
resolution and 3(cid:23)(cid:15)(cid:27)1(cid:25)(cid:15)512 votes (cid:181)against(cid:182) the resolution(cid:12). North
(cid:47)imited and (cid:51)eko(cid:16)(cid:58)allsend (cid:51)ty (cid:47)td(cid:15) which are both Rio Tinto
entities(cid:15) voted a combined total of 35(cid:23)(cid:15)0(cid:26)(cid:27)(cid:15)(cid:27)5(cid:23) votes (cid:181)for(cid:182) the
resolution. The aggregate amount of non(cid:16)e(cid:91)ecutive Directors(cid:182)
remuneration paid in 201(cid:23) was appro(cid:91)imately (cid:7)(cid:25)1(cid:27)(cid:15)000 inclusive
of statutory superannuation.
The non(cid:16)e(cid:91)ecutive Directors(cid:182) fees were reviewed by the (cid:37)oard
in January 201(cid:23). The (cid:37)oard resolved that there would be no
increase in non(cid:16)e(cid:91)ecutive Directors(cid:182) fees or committee fees
in 201(cid:23). The annual fees for non(cid:16)e(cid:91)ecutive Directors for 201(cid:23)
(cid:11)e(cid:91)cluding superannuation(cid:12) are as follows:
Chairman
(cid:7)1(cid:25)2(cid:15)000
(cid:7)1(cid:25)2(cid:15)000
Non(cid:16)e(cid:91)ecutive Director
(cid:7)(cid:28)0(cid:15)000
(cid:7)(cid:28)0(cid:15)000
2014
2013
Audit and Risk Committee
Chair*
Audit and Risk Committee
Member*
Remuneration Committee
Chair*
(cid:7)20(cid:15)000
(cid:7)20(cid:15)000
(cid:7)13(cid:15)000
(cid:7)13(cid:15)000
(cid:7)5(cid:15)000
(cid:7)5(cid:15)000
* Fees are payable in addition to Chairman and non-executive Director fees.
The (cid:37)oard has resolved that no additional committee fees are
payable to members of the Remuneration Committee (cid:11)other than
the Remuneration Committee Chair(cid:12).
C
(cid:51)rinciples used to determine e(cid:91)ecutive
remuneration
The Remuneration Committee is responsible for the review of(cid:15)
and where appropriate will make recommendations to the (cid:37)oard
in respect of(cid:15) e(cid:91)ecutive remuneration.
As the Company is a member company of the Rio Tinto (cid:42)roup(cid:15)
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 (cid:42)roup(cid:15) to determine the remuneration of the
Chief (cid:40)(cid:91)ecutive and other key management personnel of the
Company (cid:11)together(cid:15) (cid:181)senior e(cid:91)ecutives(cid:182)(cid:12).
As a member of the Rio Tinto (cid:42)roup of companies(cid:15) (cid:40)RA(cid:182)s
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
63
64
DIRECTORS’ REPORT
senior e(cid:91)ecutives are seconded from Rio Tinto and are hence
drawn from the talented pool of e(cid:91)ecutives in the wider Rio Tinto
(cid:42)roup. (cid:44)t is the view of the Remuneration Committee (cid:11)which has
been endorsed by the (cid:37)oard(cid:12) that a company of (cid:40)RA(cid:182)s si(cid:93)e(cid:15)
scope and remote location would have significant difficulty in
attracting e(cid:91)ecutives of the calibre necessary to ensure superior
performance or in retaining them for significant periods if this
arrangement was not in place. (cid:56)nder these circumstances(cid:15)
the (cid:37)oard believes that the general application of the Rio Tinto
remuneration framework to (cid:40)RA(cid:182)s senior e(cid:91)ecutives(cid:15) with
appropriate review by the Company(cid:182)s Remuneration Committee(cid:15)
is of benefit to (cid:40)RA.
(cid:41)or 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 AS(cid:59) 200. Typically(cid:15)
base salaries are positioned at the median of these comparator
groups(cid:15) 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(cid:182)s financial statements. (cid:41)or the purpose of disclosure
under the Corporations Act 2001 and relevant Accounting
Standards(cid:15) the (cid:179)key management personnel(cid:180) of the Company
apart from the Chief (cid:40)(cid:91)ecutive and the non(cid:16)e(cid:91)ecutive Directors(cid:15)
have been determined to be the permanent (cid:42)eneral Managers of
the Company (cid:11)including the Chief Advisor Agreements(cid:12) reporting
directly to the Chief (cid:40)(cid:91)ecutive.
(cid:40)(cid:91)ecutive remuneration(cid:15) including base salary and short and long
term incentive plan awards(cid:15) 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(cid:15) global economic conditions and relevant comparative
information. As well as base salary(cid:15) remuneration packages may
include fringe benefits such as medical insurance(cid:15) car(cid:15) rent and
other allowances(cid:15) superannuation(cid:15) retirement entitlements and
short and long term incentives.
The annual performance evaluation and management process
includes formal consultation between the Chairman (cid:11)based on
the Remuneration Committee(cid:182)s review and recommendations(cid:12)
and the Chief (cid:40)(cid:91)ecutive of the Rio Tinto (cid:40)nergy (cid:51)roduct (cid:42)roup
regarding the Chief (cid:40)(cid:91)ecutive of the Company(cid:15) and between
the Remuneration Committee and the Chief (cid:40)(cid:91)ecutive of the
Company regarding the other senior e(cid:91)ecutives.
The e(cid:91)ecutive pay and reward framework is designed to provide
a total remuneration package which is competitive in the market(cid:30)
aligns total remuneration with delivered individual and short
and long term business performance(cid:30) strikes an appropriate
balance between fi(cid:91)ed and variable components(cid:30) 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 e(cid:91)ecutives
re(cid:84)uired to lead the Company.
The Company Secretary of the Company is subject to the same
e(cid:91)ecutive remuneration pay and reward framework.
The e(cid:91)ecutive pay and reward framework has four components:
(cid:135)
(cid:135)
(cid:135)
(cid:135)
base salary and benefits(cid:30)
short term incentive plans(cid:30)
long term incentive plans through participation in the
Rio Tinto (cid:51)erformance Share (cid:51)lan (cid:11)(cid:51)S(cid:51)(cid:12) and Rio Tinto
Management Share (cid:51)lan (cid:11)MS(cid:51)(cid:12)(cid:30) and
other remuneration such as superannuation.
Performance and non-performance related
remuneration
Total remuneration is a combination of the fi(cid:91)ed(cid:15) performance
and service related elements described in this report. The short
and long term incentive plans (cid:11)other than the Rio Tinto MS(cid:51)(cid:12) are
the variable components of the total remuneration package and
are therefore (cid:179)at risk(cid:180). They are tied to achievement of specific
business measures(cid:15) individual performance and service. The
other components are referred to as (cid:179)fi(cid:91)ed(cid:180) as they are not at
risk.
The long term incentive plan is designed to provide a target
e(cid:91)pected value of between 22.5 and (cid:23)5 per cent of base salary
for the senior e(cid:91)ecutives and the Chief (cid:40)(cid:91)ecutive(cid:15) delivered in
any one year through a blend of (cid:51)S(cid:51) and MS(cid:51) awards. (cid:44)n 201(cid:23)(cid:15)
awards were made under the MS(cid:51).
(cid:40)(cid:91)cluding post employment and non(cid:16)monetary benefits(cid:15) the
proportion of total direct remuneration, assuming maximum
award levels and ma(cid:91)imum levels of performance(cid:15) provided
by way of variable at risk components as at 31 December
201(cid:23) for the Chief (cid:40)(cid:91)ecutive and other senior e(cid:91)ecutives was
between (cid:23)(cid:27) and (cid:25)(cid:27) 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
(cid:37)ase salary is set at a level consistent with market e(cid:91)pectations
within the wider Rio Tinto remuneration framework and may
be delivered as a mi(cid:91) of cash and prescribed non(cid:16)financial
benefits. (cid:44)t is targeted broadly at the median of companies of
similar size, global reach and complexity, including other large
natural resource companies. (cid:37)ase salary is reviewed annually
and ad(cid:77)usted taking into account the individual and Company
performance, global economic conditions, role responsibilities,
an assessment against comparator groups(cid:15) 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
64
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
65
DIRECTORS’ REPORT
management personnel on calendar year performance against
challenging individual and business targets.
Short term incentive performance conditions
(cid:44)ndividual performance is reviewed against relevant targets and
ob(cid:77)ectives annually. All senior e(cid:91)ecutives of the Company have
between (cid:23)0 and (cid:26)0 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 2014 relating to performance in 2013,
as 201(cid:23) calculations are not finalised at the date of this report.
The Company’s business performance measures for 2013 used
in the determination of short term incentive plan payments were:
(cid:135)
(cid:135)
(cid:135)
(cid:41)inancial (cid:16) (cid:40)RA net earnings and cash (cid:192)ow.
Health and safety (cid:16) (cid:40)RA All (cid:44)n(cid:77)ury (cid:41)re(cid:84)uency Rate(cid:15) Semi
(cid:52)uantitative Risk Assessments and closure rates of
Significant (cid:51)otential (cid:44)ncidents.
(cid:37)usiness (cid:16) (cid:40)RA drummed production(cid:15) cost of material milled(cid:15)
volume and cost of material moved for the rehabilitation of
(cid:51)it 3(cid:15) commissioning of the (cid:37)rine Concentrator and Ranger
3 Deeps (cid:40)(cid:91)ploration Decline pro(cid:77)ect.
Bonus Deferral Plan
(cid:44)n 201(cid:23)(cid:15) 25 per cent of the Chief (cid:40)(cid:91)ecutive(cid:182)s (cid:11)Ms Sutton(cid:12) short
term incentive plan bonus pay was satisfied through the deferred
award of shares in Rio Tinto (cid:47)imited under the terms of the Rio
Tinto (cid:37)onus Deferral (cid:51)lan (cid:11)(cid:37)D(cid:51)(cid:12).
The same percentage will be satisfied in 2015 through the
deferred award of shares in Rio Tinto (cid:47)imited under the terms of
the Rio Tinto (cid:37)D(cid:51).
Long term incentive plans
(cid:44)n 201(cid:23)(cid:15) the Company(cid:182)s Remuneration Committee considered
the application of the Rio Tinto long term incentive plan to
the Company(cid:182)s senior e(cid:91)ecutives. As previously outlined(cid:15) the
Remuneration Committee believes that the general application
of the Rio Tinto remuneration framework (cid:11)including the Rio
Tinto long term incentive plans(cid:12) to (cid:40)RA(cid:182)s senior e(cid:91)ecutives
with appropriate review by the Remuneration Committee(cid:15) is of
benefit to the Company. As such the Remuneration Committee
recommended that the Company(cid:182)s long term incentive plans
remain unchanged for 201(cid:23). During 2015(cid:15) the Remuneration
Committee will review the position for future years.
Share based remuneration dependent on performance
Performance Share Plan
The Rio Tinto (cid:51)S(cid:51) provides a conditional right to Rio Tinto shares
to eligible senior management personnel within the Rio Tinto
(cid:42)roup(cid:15) including the senior e(cid:91)ecutives of the Company.
The conditional awards only vest if the performance condition
set by the Rio Tinto Remuneration Committee is satisfied by
Rio Tinto(cid:15) although the Rio Tinto Remuneration Committee
retains discretion to satisfy itself that satisfaction of the
performance condition is a genuine re(cid:192)ection of the underlying
performance of the business. (cid:51)rior to the vesting of conditional
awards(cid:15) Rio Tinto(cid:182)s Total Shareholder Return (cid:11)TSR(cid:12) performance
against the performance condition is calculated independently by
Towers (cid:58)atson.
Sub(cid:77)ect to Rio Tinto Remuneration Committee approval(cid:15) awards
vest based on the Rio Tinto (cid:42)roup(cid:182)s TSR performance against
the Morgan Stanley Capital (cid:58)orld (cid:44)nde(cid:91) (cid:11)one third(cid:12) and the
HS(cid:37)C (cid:42)lobal Mining (cid:44)nde(cid:91) (cid:11)one third(cid:12)(cid:15) along with improvement
in Rio Tinto (cid:40)(cid:37)(cid:44)T margin (cid:11)one third(cid:12) 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.
(cid:44)f Rio Tinto was sub(cid:77)ect to a change of control or a company
restructuring(cid:15) the conditional awards would only vest sub(cid:77)ect to
the satisfaction of the performance condition measured at the
time of the change of control or restructuring. Should this occur
within the first 3(cid:25) months from date of grant of the award(cid:15) the
number of shares that can vest will be reduced pro(cid:16)rata over the
3(cid:25) month period. The Rio Tinto Remuneration Committee has
discretion to adjust the performance condition to ensure a fair
measure of performance.
Rio Tinto releases awards to participants as either Rio Tinto
plc or Rio Tinto (cid:47)imited shares. Awards may(cid:15) upon vesting(cid:15) be
satisfied by Rio Tinto through the transfer of treasury shares(cid:15) the
issue of new shares or the purchase of shares in the market.
Chief Executive’s long term incentive plan
(cid:44)n 201(cid:23) the Remuneration Committee recommended that the
Chief (cid:40)(cid:91)ecutive(cid:182)s long term incentive award be delivered in Rio
Tinto shares under the Rio Tinto MS(cid:51) and under an (cid:40)RA long
term incentive plan (cid:11)(cid:40)RA (cid:47)T(cid:44)(cid:51)(cid:12). The Chief (cid:40)(cid:91)ecutive is the only
e(cid:91)ecutive who participates in this plan. The amount of the Chief
(cid:40)(cid:91)ecutive(cid:182)s long term incentive award that would otherwise have
been provided under the Rio Tinto (cid:51)S(cid:51) has been provided under
the (cid:40)RA (cid:47)T(cid:44)(cid:51).
The (cid:40)RA (cid:47)T(cid:44)(cid:51) is an award of rights that have a value calculated
by reference to the Company(cid:182)s share price (cid:11)ie phantom shares(cid:12).
(cid:58)hether or not the rights vest depends on the e(cid:91)tent to which
the relevant performance conditions have been satisfied over
the performance period. Awards have a three year performance
period commencing on 1 January of the year of grant. (cid:41)or the
201(cid:23) award(cid:15) the performance conditions will be measured over a
three year period (cid:11)from 1 January 201(cid:23) to 31 December 201(cid:25)(cid:12).
The two performance conditions are a relative TSR condition and
the achievement of (cid:40)RA strategic measures. (cid:40)ach condition will
be assessed independently. Strategic performance conditions
have been chosen to ensure that the long term incentive award
is assessed against both the Company(cid:182)s relative performance
against other uranium producers and the achievement of (cid:40)RA
strategic measures. The (cid:37)oard considers that this re(cid:192)ects the
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
65
the change of control(cid:15) but the award may be reduced pro rata to
re(cid:192)ect the acceleration of vesting. (cid:51)rior to the change of control(cid:15)
and with the consent of the ac(cid:84)uiring company(cid:15) the shares can
be converted to shares in the ac(cid:84)uirer. After a change of control(cid:15)
this can only be achieved with the consent of the employee.
Other Share Plans
The senior e(cid:91)ecutives of the Company(cid:15) together with all
employees of the Company(cid:15) may participate in Rio Tinto share
savings and share option plans applicable at particular locations.
(cid:56)p to and including 2011(cid:15) these include the Rio Tinto (cid:47)imited
share savings plan for senior e(cid:91)ecutives employed from the
Rio Tinto (cid:47)imited group of companies and the Rio Tinto plc share
savings plan for senior e(cid:91)ecutives employed from the Rio Tinto
plc group of companies. (cid:44)n 2012(cid:15) the Rio Tinto Remuneration
Committee approved and implemented a new global employee
share purchase plan(cid:15) myShare. The new plan is offered to eligible
employees. (cid:56)nder the plan(cid:15) employees may ac(cid:84)uire shares
up to the value of (cid:56)S(cid:7)5(cid:15)000 per year capped at 10 per cent of
their base salary. (cid:40)ach 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. (cid:41)urther
details are at Note 30 to the (cid:41)inancial Statements.
Share dealing policy
The participation of senior e(cid:91)ecutives in the Rio Tinto share plans
involving the awarding of Rio Tinto securities at a future date(cid:15) and
any grants of shares and options under these plans, is subject
to and conditional upon compliance with the terms of the (cid:181)Rules
for dealing in securities of Rio Tinto(cid:182) (cid:11)(cid:179)Rules for dealing(cid:180)(cid:12). The
Rules for dealing e(cid:91)pressly prohibit the limiting of e(cid:91)posure to
economic risk in relation to such securities(cid:15) and are available on
the Rio Tinto website at www.riotinto.com.
66
DIRECTORS’ REPORT
Director’s Report
appropriate mi(cid:91) of incentives to achieve an improvement in (cid:40)RA(cid:182)s
performance over the long term.
(cid:41)or the TSR performance condition(cid:15) rights vest based on (cid:40)RA(cid:182)s
TSR performance against Areva SA(cid:15) Cameco Corp(cid:15) Denison
Mines Corp(cid:15) (cid:40)nergy (cid:41)uels (cid:44)nc(cid:15) (cid:41)ission (cid:56)ranium Corp(cid:15) (cid:51)aladin
(cid:40)nergy (cid:47)imited(cid:15) Summit Resources (cid:47)imited(cid:15) (cid:56)ranium (cid:40)nergy
Corp and (cid:56)r(cid:16)(cid:40)nergy (cid:44)nc over the performance period. (cid:57)esting will
be sub(cid:77)ect to (cid:40)RA(cid:182)s ranked position using the following schedule:
Equal or greater to 2nd
ranked company
100 per cent of the rights sub-
(cid:77)ect to the TSR condition vest
(cid:37)etween the 5th and 2nd
ranked companies
Above the 5th ranked
company
(cid:37)etween 22.5 per cent and 100
per cent of the rights subject to
the TSR condition vest(cid:15) on a pro
rata basis
22.5 per cent of the rights
sub(cid:77)ect to the TSR condition
vest
(cid:40)(cid:84)ual to the (cid:25)th ranked
company or below
Nil vesting
(cid:41)or the (cid:40)RA strategic measures(cid:15) an assessment of the level of
vesting applicable to this portion of the award is to be assessed
by the Remuneration Committee(cid:15) with the final outcome to be
recommended to the (cid:40)RA (cid:37)oard by the (cid:40)RA Chairman at the
end of the three year performance period. The elements to be
considered in respect of (cid:40)RA strategic measures include financial
performance, organisational and personnel related performance,
relations with stakeholders and progress in respect of the
Ranger 3 Deeps underground mine pro(cid:77)ect. (cid:41)or outstanding
performance, the Board may determine to permit a number of
rights to vest that is e(cid:84)ual to 150 per cent of the initial number
of rights awarded that were sub(cid:77)ect to (cid:40)RA strategic measures
condition.
(cid:56)pon vesting(cid:15) the value of the (cid:40)RA (cid:47)T(cid:44)(cid:51) award will be converted
into Rio Tinto MS(cid:51) shares. The number of Rio Tinto MS(cid:51) shares
to be awarded will be calculated based on the five day average
Rio Tinto (cid:47)imited share price prior to the Rio Tinto MS(cid:51) grant
date in March of the year of vesting. Any Rio Tinto MS(cid:51) shares
provided will vest after a further 2 year period in (cid:41)ebruary 201(cid:28).
There are no further performance conditions(cid:15) however(cid:15) the Rio
Tinto MSP shares can be forfeited in certain circumstances
related to cessation of employment.
Share based remuneration not dependent on
performance
(cid:56)nder the Rio Tinto MS(cid:51)(cid:15) conditional grants of Rio Tinto shares
may be awarded to eligible senior e(cid:91)ecutives of the Company
which will vest(cid:15) wholly or partly(cid:15) upon e(cid:91)piry 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 Rio
Tinto MS(cid:51) are at the discretion of Rio Tinto.
(cid:44)n the case of a change of control(cid:15) awards vest on the date of
66
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
67
DIRECTORS’ REPORT
Details of remuneration
D
Details of the remuneration of each non(cid:16)e(cid:91)ecutive and e(cid:91)ecutive Director and each of the other senior e(cid:91)ecutives in respect of their
services to the Company 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)
P McMahon
D Klingner1
H Garnett
P Taylor2
J Pegler
H Newell2,3
Joanne Farrell2,4
Bruce Cox2,5
Total 2014
Total 2013
2014
2013
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2014
175
167
20
110
110
90
90
108
108
40
90
50
9
582
585
Note 1
Note 2
Note 3
Note 4
Note 5
Resigned as a Director and Chairman on 8 February 2013.
Amounts paid directly to Rio Tinto Limited.
Resigned as a Director on 11 June 2014.
Appointed as a Director on 11 June 2014.
Appointed as a Director on 27 November 2014.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16
15
2
10
10
-
-
10
10
-
-
-
-
36
37
191
182
22
120
120
90
90
118
118
40
90
50
9
618
622
(cid:40)(cid:91)ecutive Director and other key management personnel of the consolidated entity
Set out below is an overview of the remuneration paid to the e(cid:91)ecutive Director and other key management personnel in 201(cid:23). This
includes details of the key elements of remuneration and a summary of total remuneration for 201(cid:23).
Andrea Sutton (Chief Executive from 23 September 2013)
Base salary
Ms Sutton was appointed as Chief (cid:40)(cid:91)ecutive and Managing Director on 23 September 2013. Ms Sutton(cid:182)s base salary is reviewed
annually(cid:15) with reference to the underlying performance of (cid:40)RA(cid:15) the Rio Tinto (cid:42)roup and Ms Sutton(cid:15) global economic conditions(cid:15) role
responsibility(cid:15) an assessment against relevant comparator groups(cid:15) internal relativities and base salary budgets applying to the broader
employee population.
(cid:50)n 1 March 201(cid:23)(cid:15) Ms Sutton(cid:182)s base salary was (cid:7)3(cid:28)1(cid:15)000.
ST(cid:44)(cid:51) ob(cid:77)ectives
The ST(cid:44)(cid:51) cash payment made to Ms Sutton and other key management personnel in 201(cid:23) was determined by assessing individual
and business performance against ob(cid:77)ectives set for 2013.
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
67
68
DIRECTORS’ REPORT
The following individual ob(cid:77)ectives were set for Ms Sutton for
2013:
(cid:135)
Continue to improve employee engagement and safety
during a time of significant change and uncertainty
(cid:135) Meet or exceed 2013 production target
(cid:135)
Continue to implement the progressive rehabilitation
program for the Ranger (cid:51)ro(cid:77)ect Area on schedule and on
budget(cid:15) including the backfilling of (cid:51)it 3(cid:15) and dewatering of
Pit 1
Advancement of the Ranger 3 Deeps (cid:40)(cid:91)ploration Decline(cid:15)
underground exploration drilling program and Prefeasibility
Study in accordance with plan and budget
Demonstrate progress on the rehabilitation of Jabiluka
(cid:44)nterim (cid:58)ater Management (cid:51)ond
(cid:40)nhance the Company(cid:182)s relationship with Mirarr Traditional
(cid:50)wners and the (cid:42)und(cid:77)eihmi Aboriginal Corporation
(cid:135)
(cid:135)
(cid:135)
ST(cid:44)(cid:51) outcomes
Ms Sutton(cid:182)s achievement against her 2013 personal ob(cid:77)ectives
was assessed as good. (cid:44)n particular:
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:40)RA had a strong safety performance(cid:15) with a new record of
1(cid:27)(cid:27) in(cid:77)ury free days and an All (cid:44)n(cid:77)ury (cid:41)re(cid:84)uency Rate of 0.(cid:28)1
(cid:40)RA produced 2(cid:15)(cid:28)(cid:25)0 tonnes and sold 2(cid:15)(cid:27)15 tonnes of
uranium oxide
(cid:40)RA achieved (cid:7)52 million of additional cost savings as part
of the ongoing (cid:37)usiness Review and ended the year with
(cid:7)35(cid:26) million in cash on hand
The rehabilitation of (cid:51)it 3 progressed ahead of schedule with
22.(cid:27) million tonnes backfilled at the end of 2013
The rehabilitation of (cid:51)it 1 progressed on schedule(cid:15) with
dewatering wicks installed and the first part of a rock layer to
compress the tailings mass and activate the wicks laid
The Ranger 3 Deeps (cid:40)(cid:91)ploration Decline pro(cid:77)ect(cid:15)
underground exploration drilling program and Prefeasibility
Study progressed on schedule and on budget
The Jabiluka (cid:44)nterim (cid:58)ater Management (cid:51)ond was safely
dismantled(cid:15) with rehabilitation of the site well advanced
(cid:44)mproved engagement with Mirarr Traditional (cid:50)wners and
the (cid:42)und(cid:77)eihmi Aboriginal Corporation through leach tank
recovery operation(cid:15) Relationship Committee and related
activities
(cid:40)RA(cid:182)s strong record of employee diversity continued(cid:15) with (cid:28)1
female employees (cid:11)1(cid:27) per cent of the total workforce(cid:12) and
(cid:26)(cid:28) (cid:44)ndigenous employees (cid:11)1(cid:25) per cent of the total workforce
(cid:47)T(cid:44)(cid:51) awards granted
Award levels are set so as to incentivise e(cid:91)ecutives to provide
sufficient retention for the e(cid:91)ecutive team and to contribute to the
competitiveness of the overall remuneration package. The value
of the awards granted to Ms Sutton in 201(cid:23)(cid:15) based on the fair
value calculations performed by individual advisors(cid:15) was 5(cid:25) per
cent of base salary. The eventual value of the award will depend
on performance during the period 201(cid:23) to 201(cid:25).
68
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
69
DIRECTORS’ REPORT
Total remuneration
The table below provides a summary of Ms Sutton(cid:182)s total remuneration disclosed for 2013 (cid:11)for services rendered to (cid:40)RA(cid:12) and 201(cid:23).
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(cid:182)s remuneration arrangements. The remuneration details set out on page (cid:26)3 include theoretical
accounting values relating to various parts of the remuneration packages(cid:15) most notably long term incentive plan arrangements.
Accordingly(cid:15) the numbers below are not compatible with those in the table on page (cid:26)3.
(STATED IN $’000)
Base salary paid1
ST(cid:44)(cid:51) cash bonus2
ST(cid:44)(cid:51) deferred shares3
(cid:47)T(cid:44)(cid:51) share based payments
Superannuation
(cid:50)ther benefits4
Total remuneration
(cid:8) change from previous year
(cid:8) of ma(cid:91)imum ST(cid:44)(cid:51) cash bonus awarded
(cid:8) of ma(cid:91)imum ST(cid:44)(cid:51) cash bonus forfeited
2014
389
175
57
143
98
84
946
-
61
39
2013
105
-
-
34
21
53
213
-
-
-
Note 1
Note 2
Note 3
Note 4
2013 salary paid in financial year from 23 September 2013 to 31 December 2013. Salaries are reviewed with effect from 1 March.
Bonus payment relates to prior year performance. No cash bonus is disclosed for 2013 as payments made were in respect to services
rendered to another Rio Tinto entity in 2012.
Value of deferred share awards granted under Bonus Deferral Plan. No deferred share awards are disclosed for 2013 as awards made
were in respect to services rendered to another Rio Tinto entity in 2012.
Other benefits include accommodation, vehicle and other allowances.
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
69
70
DIRECTORS’ REPORT
Rob Atkinson
Base salary
Mr Atkinson resigned as Chief (cid:40)(cid:91)ecutive and Managing Director on 23 September 2013. At the time of his resignation(cid:15) Mr Atkinson(cid:182)s
base salary was (cid:7)3(cid:28)(cid:28)(cid:15)0(cid:28)(cid:23).
Total remuneration
(cid:41)or comparison purposes(cid:15) the table below provides a summary of Mr Atkinson(cid:182)s total remuneration disclosed for the years of 2012
and 2013. Mr Atkinson received no remuneration from (cid:40)RA in 201(cid:23). 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(cid:182)s remuneration
arrangements. The remuneration details set out on page (cid:26)3 include theoretical accounting values relating to various parts of the
remuneration packages(cid:15) most notably long term incentive plan arrangements. Accordingly(cid:15) the numbers below are not compatible with
those in the table on page (cid:26)3.
(STATED IN $’000)
Base salary paid1
ST(cid:44)(cid:51) cash bonus2
ST(cid:44)(cid:51) deferred shares3
(cid:47)T(cid:44)(cid:51) share based payments
Superannuation
(cid:50)ther benefits4
Total remuneration
(cid:8) change from previous year5
(cid:8) of ma(cid:91)imum ST(cid:44)(cid:51) cash bonus awarded
(cid:8) of ma(cid:91)imum ST(cid:44)(cid:51) cash bonus forfeited
2014
2013
2012
-
-
-
-
-
-
-
-
-
-
287
198
66
181
88
87
907
(4%)
66%
34%
396
189
63
223
92
84
1,047
5%
67%
33%
Note 1
Note 2
Note 3
Note 4
Note 5
2013 salary paid in financial year from 1 (cid:45)anuary 2013 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.
Key management personnel (other than the Chief Executive)
Base salary
(cid:37)ase salaries are reviewed annually(cid:15) with reference to the underlying performance of (cid:40)RA(cid:15) the Rio Tinto (cid:42)roup and the individual(cid:15)
global economic conditions(cid:15) role responsibility(cid:15) an assessment against relevant comparator groups and base salary budgets applying
to the broader employee population.
At the end of 2013 and 201(cid:23)(cid:15) the base salaries of the Company(cid:182)s key management personnel (cid:11)other than the Chief (cid:40)(cid:91)ecutive(cid:12) were:
BASE SALARY A’$000 (UNLESS OTHERWISE SPECIFIED)
Tim (cid:40)ckersley
James May1
Greg Sinclair
Steeve Thibeault2
Alan Tietzel
Note 1
Note 2
Employment with ERA commenced on 5 May 2014.
(cid:40)mployment with (cid:40)(cid:53)(cid:36) ceased on 30 May 2014. Salary is re(cid:192)ected at time of resi(cid:74)nation.
2014
315
235
297
316
349
%
CHANGE
3%
-
2%
1%
2%
2013
305
-
290
312
341
70
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
71
DIRECTORS’ REPORT
ST(cid:44)(cid:51) ob(cid:77)ectives and outcomes
Tim (cid:40)ckersley
SUMMARY OF INDIVIDUAL OBJECTIVES*
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:47)ead and deliver on the Company(cid:182)s health and safety ob(cid:77)ectives to achieve (cid:93)ero harm
Deliver the Ranger operations cost budget to plan
Deliver total material movement for mining operations to plan
Deliver plant throughput to plan
(cid:44)ntegrate (cid:37)rine Concentrator into Ranger operations
Right(cid:16)si(cid:93)e the Ranger workforce for future operations and maintain diversity
Continued improved relations with local and regulatory stakeholders
James May
(cid:135) Mr May (cid:77)oined (cid:40)RA in May 201(cid:23)(cid:15) and as such no ST(cid:44)(cid:51) payment was made in 201(cid:23) for services
Greg Sinclair
Steeve Thibeault
Alan Tietzel
to (cid:40)RA
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:47)ead and deliver on the Company(cid:182)s health and safety ob(cid:77)ectives to achieve (cid:93)ero harm
Delivery of the (cid:44)ntegrated Tailings(cid:15) (cid:58)ater and Closure (cid:51)refeasibility Study(cid:15) strategy and cost
estimate
Delivery of the Tailings and (cid:37)rine Management (cid:41)easibility Study
Delivery of the 2013 ob(cid:77)ectives of the Ranger 3 Deeps (cid:51)refeasibility Study and (cid:40)nvironmental
(cid:44)mpact Statement
Development(cid:15) approval and handover of progressive rehabilitation plans for (cid:51)it 1 initial backfill
and the Jabiluka (cid:44)nterim (cid:58)ater Management (cid:51)ond
Safely e(cid:91)ecute the surface e(cid:91)ploration program to target high grade deposits on the Ranger
Project Area
Demonstrate leadership in health(cid:15) safety and environment and Company values
(cid:44)mplement the ob(cid:77)ectives of the 2013 (cid:37)usiness (cid:51)lan and develop a comprehensive and detailed
Business Plan for 2014 and 2015
(cid:44)mplement rigorous cost review throughout (cid:40)RA(cid:182)s operations
(cid:40)nsure that cash(cid:192)ow planning and management is at a high level(cid:15) with a view to ma(cid:91)imising
cash(cid:192)ow at end of 2015
Develop optimised cash(cid:192)ow generation options(cid:15) including production(cid:15) sales and inventory for
the period of 2013 to 2016
Deliver and improve procurement initiatives in line with (cid:37)usiness Review ob(cid:77)ectives
Demonstrate leadership in health(cid:15) safety(cid:15) environment and Company values
(cid:44)mplement specific aspects of Section (cid:23)(cid:23) Agreement and Mining Agreement including
establishment of (cid:46)akadu (cid:58)est Arnhem Social Trust
(cid:41)oster Traditional (cid:50)wner and key stakeholder support for a Ranger 3 Deeps undergound mine
Develop tenure and e(cid:91)ternal relations plan to support the long term future of Ranger operations
Develop and drive strategies which will underpin a viable future for Jabiru(cid:15) including scheduling
of the town under A(cid:47)RA in the name of Mirarr Traditional (cid:50)wners
Support development of long term strategic options for (cid:40)RA
(cid:13)(cid:44)ndividual ob(cid:77)ectives relate to the 2013 financial year.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
71
72
DIRECTORS’ REPORT
A summary of the individual targets and performance for each of the Company(cid:182)s key management personnel (cid:11)other than the Chief
(cid:40)(cid:91)ecutive(cid:12) for the 2013 financial year (cid:11)ST(cid:44)(cid:51) paid in 201(cid:23)(cid:12) is set out in the table below.
MEASURES
Tim Eckersley
Financial performance
Business performance
Health and Safety
(cid:44)ndividual
Total
Greg Sinclair
Financial performance
Business performance
Health and Safety
(cid:44)ndividual
Total
Steeve Thibeault
Financial performance
Business performance
Health and Safety
(cid:44)ndividual
Total
Alan Tietzel
Financial performance
Business performance
Health and Safety
(cid:44)ndividual
Total
WEIGHT (%)
SCORE (OUT
OF 200%)
WEIGHTED
SCORE (%)
10.0
15.0
15.0
(cid:25)0.0
100.0
10.0
15.0
15.0
(cid:25)0.0
100.0
10.0
15.0
15.0
(cid:25)0.0
100.0
10.0
15.0
15.0
(cid:25)0.0
100.0
121.(cid:28)
133.(cid:23)
13(cid:26).0
12(cid:23).(cid:27)
-
121.(cid:28)
133.(cid:23)
13(cid:26).0
11(cid:26).5
-
121.(cid:28)
133.(cid:23)
13(cid:26).0
113.5
-
121.(cid:28)
133.(cid:23)
13(cid:26).0
111.(cid:26)
-
12.2
20.0
20.(cid:25)
(cid:26)(cid:23).(cid:28)
127.7
12.2
20.0
20.(cid:25)
(cid:26)0.5
123.3
12.2
20.0
20.(cid:25)
(cid:25)(cid:27).1
120.9
12.2
20.0
20.(cid:25)
(cid:25)(cid:26).0
119.8
(cid:47)T(cid:44)(cid:51) awards
Award levels are set so as to incentivise e(cid:91)ecutives to provide sufficient retention for the e(cid:91)ecutive team and to contribute to the
competitiveness of the overall remuneration package. The value of the awards granted in 201(cid:23)(cid:15) based on the fair value calculations
performed by independent advisors(cid:15) was between 22.5 per cent and 30 per cent of base salary.
72
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
73
DIRECTORS’ REPORT
Executive directors and other key management personnel total remuneration
SHORT TERM BENEFITS
CASH
SALARY
($000)
CASH
BONUS9
($000)
OTHER8
($000)
TERMINATION
PAYMENTS
($000)
POST
EMPLOY-
MENT
BENEFITS
SUPER-
ANNUA-
TION
PENSION
($000)
SHARE
BASED
PAY-
MENTS9
CASH &
EQUITY
SETTLED
($000)
Executive directors
A Sutton1
R Atkinson2
Other senior executives
T (cid:40)ckersley3
J May4
G Sinclair5
S Thibeault6
A Tietzel7
Total 2014
Total 2013
2014
2013
2013
2014
2013
2014
2014
2013
2014
2013
2014
2013
389
105
287
360
363
137
296
299
131
321
397
401
1,710
1,776
175
-
198
117
125
-
89
99
94
100
122
124
597
646
84
53
87
33
32
38
38
41
31
82
38
80
262
375
-
-
-
-
-
-
-
-
-
-
98
21
88
72
70
27
66
64
34
61
30
22
327
326
169
34
209
88
75
17
63
65
34
83
107
108
478
574
TOTAL
($000)
915
213
869
670
665
219
552
568
324
647
694
735
3,374
3,697
Note 1
Note 2
Note 3
Note 4
Note (cid:24)
Note (cid:25)
Note (cid:26)
Note (cid:27)
Note (cid:28)
(cid:51)erformance related cash bonus(cid:29) (cid:25)1 per cent awarded in 2014, 3(cid:28) 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.
(cid:53)esi(cid:74)ned as (cid:38)hief (cid:40)(cid:91)ecutive on 23 September 2013. (cid:51)erformance related cash bonus(cid:29) (cid:25)(cid:25) per cent awarded in 2013, 34 per cent forfeited.
(cid:51)erformance related cash bonus(cid:29) (cid:25)4 per cent awarded in 2014, 3(cid:25) per cent forfeited. (cid:25)(cid:27) per cent awarded in 2013, 32 per cent forfeited.
Salary paid in financial year from (cid:24) May 2014 to 31 December 2014. No cash bonus is disclosed for 2014 as payments made were in respect
to services rendered to another Rio Tinto entity in 2013.
(cid:51)erformance related cash bonus(cid:29) (cid:25)2 per cent awarded in 2014, 3(cid:27) per cent forfeited. (cid:25)(cid:27) per cent awarded in 2013, 32 per cent forfeited.
Salary paid in financial year from 1 (cid:45)anuary 2014 to 30 May 2014. (cid:51)erformance related cash bonus(cid:29) (cid:25)0 per cent awarded in 2014, 40 per cent
forfeited. (cid:25)4 per cent awarded in 2013, 3(cid:25) per cent forfeited.
(cid:51)erformance related cash bonus (cid:25)0 per cent awarded in 2014, 40 per cent forfeited. (cid:25)1 per cent awarded in 2013, 3(cid:28) per cent forfeited.
Other benefits includes relocation, accommodation, travel, vehicle and other allowances and other employment related benefits.
(cid:51)erformance related bonuses paid in 2014 relate to services in 2013 (cid:11)e(cid:84)ually bonuses paid in 2013 relate to services in 2012(cid:12).
The value of share based awards has been determined in accordance with the recognition and measurement re(cid:84)uirements of AAS(cid:37)2
(cid:179)Share(cid:16)based (cid:51)ayment(cid:180). The fair value of awards granted under the Rio Tinto Management Share (cid:51)lan (cid:11)MS(cid:51)(cid:12)(cid:15) (cid:37)onus Deferral (cid:51)lan
(cid:11)(cid:37)D(cid:51)(cid:12)(cid:15) (cid:51)erformance Share (cid:51)lan (cid:11)(cid:51)S(cid:51)(cid:12) and Share Savings (cid:51)lan (cid:11)SS(cid:51)(cid:12) have been calculated at their dates of grant using valuation
models provided by e(cid:91)ternal consultants (cid:47)ane Clark and (cid:51)eacock (cid:47)(cid:47)(cid:51)(cid:15) including an independent lattice(cid:16)based option valuation model
and a Monte Carlo valuation model which takes into account the constraints on vesting and e(cid:91)ercise attached to these awards.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
73
74
DIRECTORS’ REPORT
(cid:40)(cid:91)ecutive service agreements
(cid:40)
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(cid:15) including: medical insurance(cid:30) vehicle and accommodation allowances(cid:30)
relocation allowances and e(cid:91)penses and travel allowances.
(cid:46)ey management personnel will also be entitled to a range of pre(cid:16)e(cid:91)isting redundancy entitlements(cid:15) depending on the business and
region from where they were originally employed within the Rio Tinto (cid:42)roup. These include:
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
notice may be worked or fully or partly paid in lieu(cid:15) at (cid:40)RA(cid:182)s discretion(cid:30)
additional capped service related payments may apply(cid:30)
pro rata short term incentive plan payments may be paid based on the proportion of the performance period worked(cid:30)
conditional share awards granted and held for less than three years at the date of termination are reduced pro(cid:16)rata(cid:30)
share options or conditional share awards held for less than 12 months at date of termination may be reduced pro(cid:16)rata(cid:30)
there is no contractual entitlement to payments in the event of a change of control(cid:30) and
other ma(cid:77)or provisions of the agreements relating to remuneration as set out below.
A Sutton - Chief Executive
Term of agreement - Open, commenced 23 September 2013
(cid:37)ase salary (cid:11)e(cid:91)cluding superannuation(cid:15) allowances and other benefits(cid:12) as at 31 December 201(cid:23) of (cid:7)3(cid:28)1(cid:15)000 per annum. Ma(cid:91)imum
short term incentive bonus upon meeting performance criteria is 100 per cent of base salary. (cid:37)ase 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 si(cid:91)
months notice or e(cid:84)uivalent payment in lieu of notice.
(cid:44)n addition to Ms Sutton(cid:182)s service agreement(cid:15) (cid:40)RA has entered into a secondment agreement with Rio Tinto in relation to Ms Sutton(cid:182)s
services to (cid:40)RA. The secondment agreement provides that (cid:40)RA can end Ms Sutton(cid:182)s secondment by giving Rio Tinto si(cid:91) months(cid:182)
notice at any time. Rio Tinto can end Ms Sutton(cid:182)s secondment by giving si(cid:91) months(cid:182) notice to (cid:40)RA(cid:15) provided such notice can be given
no earlier than 23 March 201(cid:25).
T Eckersley - General Manager Operations
Term of agreement - Open, commenced 10 September 2012
(cid:37)ase salary (cid:11)e(cid:91)cluding superannuation(cid:15) allowances and other benefits(cid:12) as at 31 December 201(cid:23) of (cid:7)315(cid:15)000 per annum. Ma(cid:91)imum
short term incentive bonus upon meeting performance criteria is (cid:25)0 per cent of base salary. (cid:37)ase 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 si(cid:91) months
notice or e(cid:84)uivalent payment in lieu of notice.
(cid:45) May (cid:16) (cid:38)hief (cid:41)inancial Officer
Term of agreement - Open, commenced 5 May 2014
(cid:37)ase salary (cid:11)e(cid:91)cluding superannuation(cid:15) allowances and other benefits(cid:12) as at 31 December 201(cid:23) of (cid:7)235(cid:15)000 per annum. Ma(cid:91)imum
short term incentive bonus upon meeting performance criteria is 50 per cent of base salary. (cid:37)ase 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 si(cid:91) months
notice or e(cid:84)uivalent payment in lieu of notice.
G Sinclair - General Manager Technical Projects
Term of agreement (cid:16) (cid:50)pen(cid:15) commenced 1 May 200(cid:26).
(cid:37)ase salary (cid:11)e(cid:91)cluding superannuation(cid:15) allowances and other benefits(cid:12) as at 31 December 201(cid:23) of (cid:7)2(cid:28)(cid:26)(cid:15)000 per annum. Ma(cid:91)imum
short term incentive bonus upon meeting performance criteria is 50 per cent of base salary. (cid:37)ase salary and short term incentive
targets to be reviewed annually. Termination by the employee is one month notice in writing or by the employer giving three months
notice or e(cid:84)uivalent payment in lieu of notice.
74
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
75
DIRECTORS’ REPORT
A Tietzel - Chief Advisor Agreements
Term of agreement - Open, commenced 1 October 2010
(cid:37)ase salary (cid:11)e(cid:91)cluding superannuation(cid:15) allowances and other benefits(cid:12) as at 31 December 201(cid:23) of (cid:7)3(cid:23)(cid:28)(cid:15)000 per annum. Ma(cid:91)imum
short term incentive bonus upon meeting performance criteria is (cid:25)0 per cent of base salary. (cid:37)ase 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 si(cid:91) months
notice or e(cid:84)uivalent payment in lieu of notice.
S (cid:55)hibeault (cid:16) (cid:38)hief (cid:41)inancial Officer
Term of agreement - commenced 1 December 2012 and resigned 30 May 2014
(cid:37)ase salary (cid:11)e(cid:91)cluding superannuation(cid:15) allowances and other benefits(cid:12) as at 30 May 201(cid:23) of (cid:7)31(cid:25)(cid:15)000 per annum. Ma(cid:91)imum short
term incentive bonus upon meeting performance criteria is 50 per cent of base salary. (cid:37)ase 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 si(cid:91) months notice
or e(cid:84)uivalent payment in lieu of notice. Mr Thibeault commenced employment with the Company in July 200(cid:28) but entered into a new
service agreement on 1 December 2012.
R Atkinson - Chief Executive
Term of agreement - commenced 8 September 2008 and resigned 23 September 2013
(cid:37)ase salary (cid:11)e(cid:91)cluding superannuation(cid:15) allowances and other benefits(cid:12) as at 23 September 2013 of (cid:7)3(cid:28)(cid:28)(cid:15)000 per annum. Ma(cid:91)imum
short term incentive bonus upon meeting performance criteria is 120 per cent of base salary. (cid:37)ase 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 si(cid:91)
months notice or e(cid:84)uivalent payment in lieu of notice.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
75
76
DIRECTORS’ REPORT
F
Share based compensation
Rio Tinto Share Option Plan
(cid:44)n 2013 the Rio Tinto Share (cid:50)ption (cid:51)lan was discontinued. No options were granted in 201(cid:23). Details of the costs of the share based
payment plans applied by the Company are provided at Note 30 of the (cid:41)inancial 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
9/03/2005
7/03/2006
17/03/2009
Rio Tinto plc
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
9/03/2015
7/03/2016
17/03/2019
17/03/2019
$
(cid:23)(cid:26).0(cid:23)
(cid:26)1.0(cid:25)
(cid:23)(cid:28).5(cid:25)
£
20.01
$
30.(cid:28)3
5(cid:23).(cid:28)5
33.(cid:23)5
£
1(cid:25).53
$
(cid:27).(cid:28)3
1(cid:26).0(cid:28)
13.3(cid:25)
£
(cid:25).(cid:25)2
$
(cid:27).(cid:28)3
1(cid:26).0(cid:28)
13.3(cid:25)
£
(cid:27).2(cid:28)
EARLIEST
EXERCISE
DATE
9/03/2008
7/03/2009
17/03/2012
17/03/2012
76
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
77
DIRECTORS’ REPORT
Rio Tinto Performance Share Plan
Share awards under the Rio Tinto (cid:51)erformance Share (cid:51)lan (cid:11)(cid:51)S(cid:51)(cid:12) are granted at the discretion of the Rio Tinto Remuneration
Committee in line with Rio Tinto guidelines. (cid:44)n 2013 the (cid:51)S(cid:51) was revised(cid:15) and as a transitional provision(cid:15) 50 per cent potentially vest
after four years and 50 per cent potentially vest after five years. No (cid:51)S(cid:51) was granted as remuneration during 201(cid:23). The terms and
conditions of each right to Rio Tinto (cid:47)imited or Rio Tinto plc shares affecting remuneration in this or future reporting periods are as
follows:
AWARD DATE
Rio Tinto Limited
21 March 2011
19 March 2012
27 May 2013
27 May 2013
Rio Tinto plc
21 March 2011
19 March 2012
MARKET PRICE AT AWARD
PERFORMANCE PERIOD
ENDS*
MARKET PRICE AT
31 DECEMBER 2014
(cid:7)(cid:27)1.00
(cid:7)(cid:25)5.(cid:27)5
(cid:7)53.11
(cid:7)53.11
(cid:133)(cid:23)0.5(cid:27)
(cid:133)3(cid:25).1(cid:23)
31 December 2014
31 December 2015
31 December 2016
31 December 2017
31 December 2014
31 December 2015
(cid:7)5(cid:27).00
(cid:7)5(cid:27).00
(cid:7)5(cid:27).00
(cid:7)5(cid:27).00
(cid:133)30.00
(cid:133)30.00
Note * Vesting dependent upon continued employment with a Rio Tinto Group company.
Rio Tinto Management Share Plan
Share awards under the Rio Tinto Management Share (cid:51)lan (cid:11)MS(cid:51)(cid:12) 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 (cid:47)imited or Rio Tinto plc shares
affecting remuneration in this or future reporting periods are as follows:
AWARD DATE
Rio Tinto Limited
19 March 2012
27 May 2013
17 March 2014
Rio Tinto plc
19 March 2012
MARKET PRICE
AT AWARD
PERFORMANCE PERIOD
ENDS*
PRICE AT
31 DECEMBER 2013
(cid:7)(cid:25)5.(cid:27)5
(cid:7)53.11
(cid:7)(cid:25)0.2(cid:27)
31 December 2014
31 December 2015
31 December 2016
(cid:133)3(cid:25).1(cid:23)
31 December 2014
(cid:7)5(cid:27).00
(cid:7)5(cid:27).00
(cid:7)5(cid:27).00
(cid:133)30.00
Note * Vesting dependent upon continued employment with a Rio Tinto Group company.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
77
78
DIRECTORS’ REPORT
Rio Tinto Bonus Deferral Plan
Share awards under the Rio Tinto (cid:37)onus Deferral (cid:51)lan 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 (cid:47)imited shares affecting remuneration in this or future
reporting periods are as follows:
AWARD DATE
Rio Tinto Limited
21 March 2011
19 March 2012
27 May 2013
17 March 2014
MARKET PRICE AT AWARD
VESTING DATE*
PRICE AT
31 DECEMBER 2014
(cid:7)(cid:27)1.00
(cid:7)(cid:25)5.(cid:27)5
(cid:7)53.11
(cid:7)(cid:25)0.35
100% 1 December 2013
100% 1 December 2014
100% 1 December 2015
100% 1 December 2016
(cid:7)5(cid:27).00
(cid:7)5(cid:27).00
(cid:7)5(cid:27).00
(cid:7)5(cid:27).00
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 201(cid:23) are set out below:
P Taylor
J Farrell
B Cox
T (cid:40)ckersley
G Sinclair
A Tietzel
Rio Tinto myShare Savings (cid:51)lan
Rio Tinto myShare Savings (cid:51)lan
Rio Tinto myShare Savings (cid:51)lan
Rio Tinto Share Savings (cid:51)lan
Rio Tinto myShare Savings (cid:51)lan
Rio Tinto myShare Savings (cid:51)lan
Rio Tinto myShare Savings (cid:51)lan
78
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
79
DIRECTORS’ REPORT
(cid:40)(cid:84)uity instrument disclosures relatin(cid:74) to Directors and (cid:78)ey mana(cid:74)ement personnel
(cid:50)ptions provided as remuneration
Details of options over ordinary shares in Rio Tinto (cid:47)imited and Rio Tinto plc held during the year and provided as remuneration to
key management personnel in respect of their service to (cid:40)RA are set out below. (cid:58)hen e(cid:91)ercisable(cid:15) each option is convertible into one
ordinary share of Rio Tinto (cid:47)imited or Rio Tinto plc.
BALANCE AT
START OF
THE YEAR OR
ON JOINING1
BALANCE AT END
OF THE YEAR3
GRANTED
AS REMUN-
ERATION
EXERCISED
DURING THE
YEAR
OTHER
CHANGES2
VESTED &
EXER-
CISABLE
UN–VESTED
Rio Tinto plc
Key management personnel
S Thibeault
Rio Tinto Limited
Executive directors
R Atkinson
A Sutton
2014
2013
2013
2014
2013
Key management personnel
A Tietzel
2014
2013
Non-executive directors4
P Taylor
J Farrell
B Cox
2014
2013
2014
2014
1,186
1,186
2,168
2,888
2,888
4,495
4,495
9,368
12,987
8,090
8,425
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,487)
-
(2,025)
(3,619)
-
(314)
-
-
-
-
-
-
-
-
-
-
-
1,186
1,186
2,168
2,888
2,888
2,008
4,495
7,343
9,368
8,090
8,111
-
-
-
-
-
-
-
-
-
-
-
Note 1
Note 2
Note 3
Note 4
(cid:58)here a (cid:78)ey mana(cid:74)ement personnel (cid:77)oined durin(cid:74) the year, balance at start of the year re(cid:192)ects holdin(cid:74)s at time of commencement with (cid:40)(cid:53)(cid:36).
Other chan(cid:74)es and end of year balance include chan(cid:74)es made in relation to awards for service within the wider (cid:53)io (cid:55)into (cid:42)roup, includin(cid:74) before (cid:77)oinin(cid:74) or after
ceasin(cid:74) with (cid:40)(cid:53)(cid:36), and forfeited options where conditions were not met.
(cid:58)here a (cid:78)ey mana(cid:74)ement personnel left prior to the end of the year, the balance re(cid:192)ects the holdin(cid:74) at the time of resi(cid:74)nation.
Changes to balances for non-executive Directors do not relate to remuneration for services provided to the Company.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
79
80
DIRECTORS’ REPORT
Conditional awards provided as remuneration
(cid:51)erformance Share (cid:51)lan(cid:30) Management Share (cid:51)lan(cid:30) (cid:37)onus Deferral (cid:51)lan
No conditional awards of ordinary shares of either (cid:40)RA or of Rio Tinto (cid:47)imited or Rio Tinto plc were provided during the year as
remuneration for services provided to (cid:40)RA to any of the non(cid:16)e(cid:91)ecutive Directors. Details of conditional awards of ordinary shares in
Rio Tinto (cid:47)imited and Rio Tinto plc held during the year and provided as remuneration to each of the key management personnel of
(cid:40)RA in respect of their duties as officers of (cid:40)RA are set out below. (cid:58)hen e(cid:91)ercisable(cid:15) each award converts into one ordinary share of
Rio Tinto (cid:47)imited 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
2014
2013
2014
2013
2013
2014
2013
2014
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2014
2,039
3,523
78
85
(1,568)
(1,569)
8,953
8,953
2,438
(1,564)
-
-
13,881
11,236
(2,310)
4,796
3,176
1,799
3,576
3,300
2,845
1,339
6,498
5,242
13,926
11,067
13,482
6,296
32,374
42,849
1,581
2.322
-
(899)
(702)
-
1,128
(1,033)
1,125
1,486
1,506
(849)
-
-
1,770
(1,644)
2,621
(1,365)
-
-
-
-
-
-
(4,069)
(1,786)
(1,188)
-
(1,515)
(1,479)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(144)
-
(197)
-
-
(107)
-
-
(129)
-
-
-
(207)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
405
2,039
9,630
8,953
22,807
5,371
4,796
1,799
3,542
3,576
4,331
2,845
6,417
6,498
4,143
4,645
14,000
13,926
10,688
22,982
7,186
13,482
158
114
31,017
41,484
Rio Tinto plc
Key management personnel
S Thibeault
Rio Tinto Limited
Executive directors
A Sutton
R Atkinson
Key management personnel
T (cid:40)ckersley
J May
G Sinclair
S Thibeault
A Tietzel
Non-executive directors4
P Taylor
H Newell
J Farrell
B Cox
Note 1
Note 2
Note 3
Note 4
(cid:58)here a (cid:78)ey mana(cid:74)ement personnel (cid:77)oined durin(cid:74) the year, balance at start of the year re(cid:192)ects holdin(cid:74)s at time of commencement with (cid:40)(cid:53)(cid:36).
Other chan(cid:74)es and end of year balance include chan(cid:74)es made in relation to awards for service within the wider (cid:53)io (cid:55)into (cid:42)roup, includin(cid:74) before (cid:77)oinin(cid:74) or after
ceasin(cid:74) with (cid:40)(cid:53)(cid:36), and (cid:53)io (cid:55)into (cid:53)i(cid:74)hts (cid:44)ssue ad(cid:77)ustments to accrued balances.
(cid:58)hen a (cid:78)ey mana(cid:74)ement personnel left prior to the end of the year, the balance re(cid:192)ects holdin(cid:74)s at the date of resi(cid:74)nation.
Changes to balances for non-executive Directors do not relate to remuneration for services provided to the Company.
80
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
81
DIRECTORS’ REPORT
Shareholdings
The number of shares held in (cid:40)RA or Rio Tinto (cid:47)imited during the financial year by each Director of (cid:40)RA are set out below.
Energy Resources of Australia Ltd
P McMahon
R Atkinson
H Newell
Rio Tinto Limited
P McMahon
R Atkinson
A Sutton
D Klingner
P Taylor
J Pegler
J Farrell
B Cox
BALANCE
AT START OF
THE YEAR1
RECEIVED
DURING THE
YEAR
OTHER
CHANGES
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR2
2014
2013
2013
2014
2013
2014
2013
2013
2014
2013
2013
2014
2013
2014
2013
2014
2014
42,500
-
-
161
161
18,405
18,405
888
8,895
8,895
29,787
28,121
23,528
6,331
6,331
19,131
5,395
-
-
-
-
-
-
-
2,001
1,880
-
-
5,683
5,405
-
-
1,788
1,476
-
42,500
22,958
-
-
-
-
(2,001)
(1,564)
-
-
-
(812)
-
-
(1,515)
(1,476)
42,500
42,500
22,958
161
161
18,405
18,405
888
9,211
8,895
29,787
33,804
28,121
6,331
6,331
19,404
5,395
Note 1
Note 2
(cid:58)here a Director was appointed durin(cid:74) the year, balance re(cid:192)ects holdin(cid:74)s at the time of commencement with the (cid:38)ompany.
(cid:58)here a Director resi(cid:74)ned durin(cid:74) the year, balance re(cid:192)ects holdin(cid:74)s at time of resi(cid:74)nation as a Director of the (cid:38)ompany.
G
Additional information
Further details relating to options
Value of options exercised during the year
2014
2013
VALUE OF
OPTIONS
EXERCISED
DURING THE
YEAR
MARKET PRICE
AT DATE OF
EXERCISE
(cid:7)(cid:25)(cid:25)(cid:15)1(cid:28)(cid:28)
-
(cid:7)5(cid:27).(cid:26)(cid:27)
-
Loans and other transactions with Directors and other key management personnel
There are no loans with Directors and other key management personnel. (cid:50)ther transactions with Director related entities are disclosed
in Note 2(cid:23) (cid:177) related parties.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
81
82
DIRECTORS’ REPORT
(cid:51)rincipal activities
The principal activities of the Company during the course of the
year consisted of the mining, processing and sale of uranium
o(cid:91)ide.
Dividends
No dividends have been paid by (cid:40)RA to members in respect of
the 201(cid:23) financial year.
(cid:50)perating and financial review
Details of (cid:40)RA(cid:182)s review and results of operations are included in
the Chairman(cid:182)s Report on page (cid:25)(cid:15) the Chief (cid:40)(cid:91)ecutive(cid:182)s Report
on page (cid:27) and the (cid:50)perating and (cid:41)inancial Review section on
page 12.
Significant changes to the state of affairs
(cid:44)n the opinion of the Directors(cid:15) other than matters reported in
the Directors(cid:182) Report(cid:15) the Chairman(cid:182)s Report and the Chief
(cid:40)(cid:91)ecutive(cid:182)s Report(cid:15) there were no significant changes in the state
of affairs of the consolidated entity during the year ended 31
December 201(cid:23).
Matters subse(cid:84)uent 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(cid:15) transaction or event of a
material nature that has significantly affected or may significantly
affect:
(cid:11)i(cid:12)
(cid:11)ii(cid:12)
(iii)
the operations of the consolidated entity(cid:30)
the results of those operations(cid:30) or
the state of affairs of the consolidated entity subsequent
to the financial year ended 31 December 201(cid:23).
(cid:47)ikely developments
(cid:44)n the opinion of the Directors(cid:15) 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 (cid:40)RA is presented in the
(cid:50)perating and (cid:41)inancial Review section on page 12.
Annual General Meeting
The 201(cid:23) Annual (cid:42)eneral Meeting will be held on 1(cid:23) April 2015 in
Darwin(cid:15) in the Northern Territory of Australia. Notices of the 2015
Annual General Meeting are set out in separate letters to the
shareholders of the Company.
(cid:44)ndemnification
Clause 11 of the Company(cid:182)s constitution provides that every
Director(cid:15) manager(cid:15) 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(cid:15) secretaries(cid:15) e(cid:91)ecutive officers and
auditors from liability except for liability to a party, other than the
Company or a related body corporate(cid:15) where the liability does not
arise out of conduct involving a lack of good faith and e(cid:91)cept 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(cid:15) secretaries or
e(cid:91)ecutive officers(cid:15) is not e(cid:91)pressly prohibited by the Corporations
Act 2001.
The Directors and Company Secretary of the Company, and all
former Directors and Company Secretaries(cid:15) have the benefit of
the indemnity in Clause 11 of the Company(cid:182)s constitution.
The indemnity also applies to e(cid:91)ecutive officers of the Company
(cid:11)being the Chief (cid:41)inancial (cid:50)fficer and (cid:42)eneral Managers and
other key management personnel and managers who are
concerned with(cid:15) or take part in the management of the Company(cid:12)
as well as other employees.
Insurance
Since the end of the previous financial year(cid:15) the Company has
paid insurance premiums in respect of a Directors(cid:182) and officers(cid:182)
liability policy of insurance.
The policy indemnifies all Directors and officers of (cid:40)RA and its
controlled entities (including the Directors, Company Secretaries,
and e(cid:91)ecutive officers referred to above(cid:12) against certain liabilities.
(cid:44)n accordance with common commercial practice(cid:15) the insurance
policy prohibits disclosure of the nature of the liability insured
against and the amount of the premium.
(cid:40)nvironmental regulation and policy
(cid:40)RA strives to be at the forefront of environmental management
in the uranium industry. (cid:44)t operates in accordance with relevant
Commonwealth and Northern Territory environmental legislation
as well as site specific environmental licences(cid:15) permits and
statutory authorisations. (cid:40)RA(cid:182)s environmental management
system is (cid:44)S(cid:50)1(cid:23)001 compliant.
(cid:40)RA is re(cid:84)uired to report any incident that is a divergence from
strict compliance with statutory re(cid:84)uirements(cid:15) even if the incident
has no detrimental environmental impact(cid:15) and reports are made
to the Department of Mines and (cid:40)nergy (cid:11)Northern Territory(cid:12)(cid:30)
the Supervising Scientist of the Commonwealth Department of
(cid:40)nvironment(cid:30) the Northern (cid:47)and Council(cid:30) the Commonwealth
Department of (cid:44)ndustry and Science and the (cid:42)und(cid:77)eihmi
Aboriginal Corporation (cid:11)representatives of the Mirarr Traditional
(cid:50)wners(cid:12).
(cid:40)RA(cid:182)s commitment to protect the environment in 201(cid:23) was
confirmed by the Supervising Scientist(cid:15) which conducts e(cid:91)tensive
monitoring and research programs. There were no reported
incidents that resulted in any environmental impact off the
immediate mine site. The environment remained protected
through the period.
82
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
83
DIRECTORS’ REPORT
There were no prosecutions commenced or fines incurred in
respect of (cid:40)RA(cid:182)s environmental performance during 201(cid:23).
(cid:41)urther details of (cid:40)RA(cid:182)s environmental performance are included
in the (cid:179)(cid:40)nvironment(cid:180) section of the Annual Report on page (cid:23)1.
Corporate governance
The (cid:37)oard of (cid:40)RA considers high standards of corporate
governance to be critical to business integrity and performance.
The corporate governance structures and practices in place
at (cid:40)RA are substantially in compliance with the Corporate
(cid:42)overnance (cid:51)rinciples and Recommendations (cid:177) Second (cid:40)dition
developed by the Australian Securities (cid:40)(cid:91)change Corporate
(cid:42)overnance Council (cid:11)(cid:179)Council(cid:180)(cid:12).
Areas where the corporate governance practices of (cid:40)RA do not
follow the Council(cid:182)s recommendations arise due to Rio Tinto(cid:182)s
(cid:25)(cid:27).(cid:23) per cent ownership of the Company and the management
direction(cid:15) services and support this provides. The e(cid:91)tent to
which the Company does not comply is detailed in the Corporate
(cid:42)overnance Statement on pages (cid:27)5 to (cid:27)(cid:28).
Rounding of amounts
The Company is of a kind referred to in AS(cid:44)C Class (cid:50)rder
(cid:28)(cid:27)(cid:18)0100 and in accordance with that Class (cid:50)rder amounts in the
financial statements and Directors(cid:182) Report have been rounded to
the nearest thousand dollars(cid:15) unless otherwise indicated.
Auditors
(cid:51)ricewaterhouseCoopers are the auditors of the Company. No
person who was an officer of the Company during the year was a
former partner or director of the auditors. (cid:40)ach of the Directors at
the time this report was approved has confirmed that:
(cid:135)
(cid:135)
so far as he or she is aware(cid:15) there is no relevant audit
information (ie information needed by the auditors in
connection with preparing their report(cid:12) of which the auditors
are unaware(cid:30) 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.
Non audit services
The Company may decide to employ the auditors on assignments
additional to their statutory audit duties where the auditor(cid:182)s
e(cid:91)pertise and e(cid:91)perience with the Company are important.
Details of the amount paid or payable to the auditors for audit
services are set out below.
The Board of Directors has considered the position and, in
accordance with the advice received from the Audit and Risk
Committee(cid:15) is satisfied that the provision of non(cid:16)audit services
is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. All non(cid:16)audit
services are reviewed by the Audit and Risk Committee to
ensure they do not impact on the impartiality and ob(cid:77)ectivity of
the auditors and do not undermine the general principles relating
to auditors’ independence as set out in Professional Statement
(cid:41)1(cid:15) including reviewing or auditing the auditors(cid:182) own work(cid:15)
acting in a management or decision making capacity for the
Company(cid:15) acting as advocate for the Company or (cid:77)ointly sharing
economic risks and rewards. Accordingly(cid:15) the Directors have
satisfied themselves that the provision of non(cid:16)audit services by
the auditors does not compromise the auditor independence
requirements of the Corporations Act 2001.
During the year(cid:15) the following fees were paid or payable for
services provided by the auditors of the Company(cid:15) its related
practices and non(cid:16)audit related firms.
2014
$000
2013
$000
AUDIT SERVICES
(cid:51)ricewaterhouseCoopers
Audit and review of financial reports
310
230
Audit and review of financial reports
(additional 2013 fees)
40
-
Total Remuneration for audit
services
Ta(cid:91)ation services
Non(cid:16)audit services
Total Remuneration
350
230
-
-
-
-
350
230
(cid:44)nformation on Auditor
(cid:51)ricewaterhouseCoopers 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 (cid:27)(cid:23).
Signed at (cid:37)risbane this 12 (cid:41)ebruary 2015 in accordance with a
resolution of the Directors.
P McMahon
Director
Brisbane
12 February 2015
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
83
84
AUDITOR’S INDEPENDENCE DECLARATION
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 2014,
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
b)
no contraventions of any applicable code of professional conduct in relation to the audit.
John O'Donoghue
Partner
PricewaterhouseCoopers
Melbourne
12 February 2015
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 ANNUAL REPORT 2014
85
CORPORATE GOVERNANCE STATEMENT
Corporate Governance Statement
Corporate Governance Statement
The (cid:37)oard of (cid:40)RA considers high standards of corporate
governance to be critical to business integrity and performance
and to ma(cid:91)imise the overall long term return to shareholders.
The (cid:37)oard seeks to ensure that (cid:40)RA meets the ob(cid:77)ectives of
its shareholders(cid:15) while paying proper regard to the interests of
employees and e(cid:91)ternal stakeholders.
The corporate governance structures and practices in place at
(cid:40)RA are substantially in compliance with the 2nd (cid:40)dition of the
Corporate (cid:42)overnance (cid:51)rinciples and Recommendations with
2010 Amendments (cid:11)(cid:179)(cid:51)rinciples(cid:180)(cid:12) developed by the Australian
Securities (cid:40)(cid:91)change (cid:11)(cid:179)AS(cid:59)(cid:180)(cid:12) Corporate (cid:42)overnance Council
(cid:11)(cid:179)Council(cid:180)(cid:12).
The (cid:37)oard has considered the Council(cid:182)s (cid:51)rinciples(cid:15) and (cid:40)RA
did not comply with the following recommendations for the
whole of the reporting period:
(cid:135)
(cid:135)
Recommendation 2.1 (cid:177) there was not a ma(cid:77)ority of
independent Directors(cid:30) and
Recommendation 2.(cid:23) (cid:177) there was no established
nominations committee.
Areas where the corporate governance practices in place at
(cid:40)RA do not follow the recommendations set out in the Council(cid:182)s
(cid:51)rinciples arise due to Rio Tinto(cid:182)s ownership of (cid:25)(cid:27).(cid:23) per cent
of the shares of the Company and the management direction,
services and support provided by Rio Tinto. As e(cid:91)plained further
below(cid:15) the (cid:37)oard considers that in each case this is appropriate.
The Corporate (cid:42)overnance section of the Company(cid:182)s website
(www.energyres.com.au) sets out the further information
re(cid:84)uired by the Council(cid:182)s (cid:51)rinciples.
The Board
Responsibilities and charter
(cid:44)n carrying out its responsibilities and powers(cid:15) the (cid:37)oard at all
times recognises its overriding responsibility to act honestly(cid:15)
fairly(cid:15) diligently and in accordance with the law in serving the
interests of the (cid:40)RA(cid:182)s shareholders and employees and the
community.
The Board Charter underpins the strategic guidance and
effective management oversight provided by the (cid:37)oard(cid:15) and
defines the division of responsibility between (cid:37)oard and
management by formal delegation and a system of Board
reserve powers.
The (cid:37)oard approves strategy and business plans and monitors
the performance of (cid:40)RA against these plans. The (cid:37)oard also
monitors compliance with policies prescribed by the (cid:37)oard in
areas such as health and safety(cid:15) environment(cid:15) business ethics(cid:15)
internal control and risk management. These policies are
designed to ensure that (cid:40)RA meets or e(cid:91)ceeds the regulatory
re(cid:84)uirements governing its operations.
(cid:44)n addition to the matters e(cid:91)pressly re(cid:84)uired by law to be
approved by the (cid:37)oard(cid:15) the powers specifically reserved for the
(cid:37)oard are as follows:
(cid:11)a(cid:12)
(cid:11)b(cid:12)
(c)
(d)
(cid:11)e(cid:12)
confirming the appointment and removal of a Chief
(cid:40)(cid:91)ecutive proposed by Rio Tinto and the terms and
conditions of the Chief (cid:40)(cid:91)ecutive(cid:182)s employment(cid:30)
appointment and removal of a Company Secretary(cid:30)
appointment of the Chair of the Board and members of
(cid:37)oard Committees(cid:30)
any matters set out in the Schedule of Matters
Reserved for Decision or Consideration by the (cid:37)oard(cid:30)
and
approval(cid:15) sub(cid:77)ect to the Constitution(cid:15) the Corporations
Act 2001 and the AS(cid:59) (cid:47)isting Rules(cid:15) of each of the
following:
(cid:11)i(cid:12)
(ii)
(cid:11)iii(cid:12)
(cid:11)v(cid:12)
(cid:11)vi(cid:12)
(cid:11)vii(cid:12)
(cid:11)viii(cid:12)
(ix)
the issue of new shares or other securities in
the Company(cid:30)
incurring of debt (other than trade creditors
incurred in the normal course of business)
capital e(cid:91)penditure in e(cid:91)cess of (cid:7)5(cid:15)000(cid:15)000(cid:30)
the ac(cid:84)uisition(cid:15) divestment or establishment of
any significant business assets(cid:30)
changes to the discretions delegated from the
(cid:37)oard(cid:30)
the annual operating budget plan(cid:30)
changes to the capital and operating approval
limits of senior management(cid:30) and
the annual report and interim and preliminary
final reports.
Composition
(cid:41)rom 1 January 201(cid:23) to 2(cid:26) November 201(cid:23)(cid:15) the (cid:37)oard of (cid:40)RA
consisted of si(cid:91) Directors(cid:15) five of whom were non(cid:16)e(cid:91)ecutive.
(cid:50)n 2(cid:26) November 201(cid:23)(cid:15) the number of Directors was increased
to seven with the addition of Mr Co(cid:91) as a non(cid:16)e(cid:91)ecutive
Director. During 201(cid:23)(cid:15) Mr McMahon was the Chairman and an
independent(cid:15) non(cid:16)e(cid:91)ecutive Director. Dr (cid:42)arnett and Mr (cid:51)egler
served as independent(cid:15) non(cid:16)e(cid:91)ecutive Directors. Mr Taylor(cid:15)
Ms Newell(cid:15) Ms (cid:41)arrell and Mr Co(cid:91)(cid:15) who are e(cid:91)ecutives of Rio
Tinto(cid:15) also served as non(cid:16)e(cid:91)ecutive Directors. Ms Sutton is an
e(cid:91)ecutive Director and holds the position of Chief (cid:40)(cid:91)ecutive.
(cid:50)n 11 June 201(cid:23)(cid:15) Ms Newell resigned as a Director. Ms (cid:41)arrell
was appointed as a Director on the same date.
The (cid:37)oard strives to achieve a diversity of skills(cid:15) e(cid:91)perience and
perspective among its Directors. Details of the Directors(cid:15) their
e(cid:91)perience(cid:15) (cid:84)ualifications and other appointments are set out on
pages 5(cid:27) to 5(cid:28). Details of the independent status of Directors is
outlined in the (cid:44)ndependence section below.
(cid:52)ualification for (cid:37)oard membership is driven by the principle that
the (cid:37)oard(cid:182)s composition should re(cid:192)ect the right balance of skills(cid:15)
knowledge and diversity that the (cid:37)oard considers will best serve
the interests of (cid:40)RA and all of its shareholders. Decisions relating
to appointment of Directors are made by the full (cid:37)oard. Directors
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
85
86
CORPORATE GOVERNANCE STATEMENT
appointed by the (cid:37)oard are re(cid:84)uired by (cid:40)RA(cid:182)s Constitution to
submit themselves for election by shareholders at the Annual
(cid:42)eneral Meeting following their appointment. There is no share
ownership (cid:84)ualification for appointment as a Director.
The (cid:37)oard has not established a nominations committee. The
(cid:37)oard recognises that this does not follow Recommendation 2.(cid:23)
of the Council(cid:182)s (cid:51)rinciples. The (cid:37)oard considers that its e(cid:91)isting
practices in reviewing director competencies(cid:15) (cid:37)oard succession
planning(cid:15) (cid:37)oard performance evaluation and Director selection
and nomination carried out in accordance with the (cid:37)oard Charter(cid:15)
are satisfactory and appropriate given the si(cid:93)e of the (cid:37)oard and
(cid:40)RA(cid:182)s current ownership structure.
Mr McMahon was nominated to the (cid:37)oard by Rio Tinto in
November 2012. Mr McMahon was previously an e(cid:91)ecutive of
Rio Tinto(cid:15) however(cid:15) a sufficient period of time (cid:11)three years(cid:12) had
elapsed since he ceased employment with Rio Tinto. The (cid:37)oard
is satisfied that Mr McMahon has no continuing relationship with
Rio Tinto that would interfere with his independent e(cid:91)ercise of
(cid:77)udgement and that he is an independent director.
For the reporting period, the Board of Directors did not consist
of a ma(cid:77)ority of independent Directors. This does not follow
Recommendation 2.1 of the Council(cid:182)s (cid:51)rinciples. The (cid:37)oard
considered it was appropriate that the composition of the (cid:37)oard
recognised Rio Tinto(cid:182)s (cid:25)(cid:27).(cid:23) per cent shareholding.
Non(cid:16)e(cid:91)ecutive Directors are re(cid:84)uired to retire at least every
three years in accordance with (cid:40)RA(cid:182)s Constitution(cid:15) but may offer
themselves for re(cid:16)election.
All Directors are required to, and do, bring an independent
(cid:77)udgment to bear on (cid:37)oard decisions and act in accordance with
their statutory duties of good faith and for a proper purpose, and
in the interests of all shareholders.
(cid:44)ndependence
For the purposes of determining Director independence, the
(cid:37)oard considers any material business relationship which
could interfere(cid:15) or be perceived to interfere(cid:15) with the Director(cid:182)s
independence of (cid:77)udgement(cid:15) ability to provide a strong(cid:15) valuable
contribution to the Board’s deliberations and the Director’s ability
to act in the best interests of (cid:40)RA and all shareholders. (cid:58)here
contracts in the ordinary course of business e(cid:91)ist between (cid:40)RA
and a company in which a Director has declared an interest(cid:15)
these are reviewed for materiality to both (cid:40)RA and the other party
to the contract.
The following may be taken into account in considering such
material business relationships:
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
whether(cid:15) within the last three years(cid:15) the Director or a
close family member has been a member of e(cid:91)ecutive
management of (cid:40)RA(cid:15) employed in a senior position with a
member of the Rio Tinto (cid:42)roup or has received additional
remuneration from the Company or a member of the
Rio Tinto (cid:42)roup(cid:30)
whether the Director or a close family member is(cid:15) or is
associated with(cid:15) a substantial shareholder (cid:11)more than 5 per
cent of the voting shares(cid:12) in the Company or in a member of
the Rio Tinto (cid:42)roup(cid:30)
the Director(cid:182)s cross directorships of or significant links with
or involvement in other companies(cid:30)
the Director(cid:182)s length of service on the (cid:37)oard(cid:30) and
whether(cid:15) within the last three years(cid:15) the Director or a close
family member has had, either directly or indirectly and
whether as principal(cid:15) employee or consultant(cid:15) a material
business relationship with (cid:40)RA or with a member of the
Rio Tinto (cid:42)roup(cid:15) whether as an auditor(cid:15) professional adviser(cid:15)
supplier(cid:15) or customer (cid:11)(cid:179)material(cid:180) being more than five per
cent of (cid:40)RA(cid:182)s or the counterparty(cid:182)s consolidated gross
revenue per annum(cid:12).
Dr (cid:42)arnett and Mr (cid:51)egler are independent non(cid:16)e(cid:91)ecutive
Directors.
All related party transactions(cid:15) including those with Rio Tinto(cid:15) have
been determined by the independent Directors to be on arm’s
length terms and in the interests of (cid:40)RA.
Chairman and Chief (cid:40)(cid:91)ecutive
The Chairman(cid:15) Mr McMahon(cid:15) is an independent non(cid:16)e(cid:91)ecutive
Director. Mr McMahon(cid:182)s other appointments are set out on page
5(cid:27). The (cid:37)oard considers that none of his other commitments
interfere with the discharge of his duties to (cid:40)RA.
The Chief (cid:40)(cid:91)ecutive is Ms Sutton(cid:15) who is also a Director. This is
consistent with Recommendation 2.3 of the Council(cid:182)s (cid:51)rinciples
that the Chief (cid:40)(cid:91)ecutive and Chairman be different people.
Board meetings
The (cid:37)oard held si(cid:91) scheduled meetings and seven e(cid:91)traordinary
meetings during 201(cid:23). (cid:44)n addition(cid:15) there were nine meetings held
in 201(cid:23) of subcommittees established by the (cid:37)oard. The (cid:37)oard
meeting attendance details for Directors in 2014 are set out on
page (cid:25)2.
Performance self assessment
(cid:44)n 201(cid:23)(cid:15) the (cid:37)oard 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 (cid:37)oard Charter(cid:30)
(cid:11)b(cid:12) set out goals and ob(cid:77)ectives of the (cid:37)oard for the upcoming
year(cid:30) and
(cid:11)c(cid:12) considered whether any improvements or changes to the
Board structures and processes, including the Board Charter
and Audit and Risk Committee Charter(cid:15) were necessary or
desirable.
The process of evaluation and self assessment took the form
of a questionnaire completed by each of the Directors and
the Company Secretary. (cid:41)ollowing collation by an e(cid:91)ternal
86
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
87
CORPORATE GOVERNANCE STATEMENT
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
following (cid:37)oard meeting(cid:15) where actions arising were agreed.
financial statements(cid:15) accounting policies(cid:15) control systems(cid:15) risk
management practices and ta(cid:91)ation issues(cid:15) and for liaison with
the e(cid:91)ternal and internal auditors. The Committee also reviews
the ade(cid:84)uacy of internal and e(cid:91)ternal audit arrangements.
(cid:44)ndependent professional advice
The (cid:37)oard has adopted a procedure for Directors wishing to seek
independent professional advice(cid:15) at the Company(cid:182)s e(cid:91)pense(cid:15) in
the furtherance of their duties. The (cid:37)oard recognises that there
may be circumstances in which individual Directors are entitled
to independent professional advice(cid:15) at the Company(cid:182)s e(cid:91)pense(cid:15)
in the furtherance of their duties, and any Director may do so by
arrangement with the Company Secretary.
The Audit and Risk Committee advises the (cid:37)oard of any matters
that might have a significant impact on the financial condition
of (cid:40)RA and has the authority to investigate any matters within
its terms of reference(cid:15) having full access to the information and
resources of (cid:40)RA to fulfil its function. Related party transactions
are considered by the Audit and Risk Committee. The Audit and
Risk Committee reviews compliance with the Corporations Act
2001, and the requirements of the ASX and other regulatory
re(cid:84)uirements.
Remuneration
(cid:40)RA(cid:182)s Constitution provides that the aggregate remuneration
paid to non(cid:16)e(cid:91)ecutive Directors of (cid:40)RA in any one year will not
e(cid:91)ceed (cid:7)(cid:27)00(cid:15)000 or such other amount as may be approved
by shareholders from time to time. At the 201(cid:23) Annual (cid:42)eneral
Meeting(cid:15) the 2013 Remuneration Report was approved with
(cid:28)1.2(cid:26) per cent of shareholders who cast a vote voting in favour
(cid:11)voting comprised 3(cid:25)3(cid:15)(cid:27)3(cid:26)(cid:15)(cid:26)(cid:25)5 votes (cid:181)for(cid:182) the resolution and
3(cid:23)(cid:15)(cid:27)1(cid:25)(cid:15)512 votes (cid:181)against(cid:182) the resolution(cid:12). North (cid:47)imited and
(cid:51)eko(cid:16)(cid:58)allsend (cid:51)ty (cid:47)td(cid:15) which are both Rio Tinto entities(cid:15) voted a
combined total of 35(cid:23)(cid:15)0(cid:26)(cid:27)(cid:15)(cid:27)5(cid:23) votes (cid:181)for(cid:182) the resolution.
(cid:44)n 2012(cid:15) the (cid:37)oard established a Remuneration Committee. At 31
December 201(cid:23)(cid:15) the Remuneration Committee comprised three
non(cid:16)e(cid:91)ecutive independent Directors(cid:15) being Mr (cid:51)egler (cid:11)Chair(cid:12)(cid:15)
Dr (cid:42)arnett and Mr McMahon. A ma(cid:77)ority of members constitutes
a (cid:84)uorum for a meeting. The Chief (cid:40)(cid:91)ecutive may be invited to
attend Remuneration Committee meetings. (cid:50)ther e(cid:91)ecutives may
also be invited to discuss or report on particular agenda items.
The Remuneration Committee Charter sets out the role and
ob(cid:77)ectives of the Remuneration Committee. A summary of the
ob(cid:77)ectives of the Remuneration Committee is set out on page
(cid:25)3 of the Remuneration Report. The complete Remuneration
Committee Charter is available at the Corporate (cid:42)overnance
section of (cid:40)RA(cid:182)s website.
Audit and Risk committee
The Audit and Risk Committee is appointed by the (cid:37)oard and at
31 December 201(cid:23) comprised three non(cid:16)e(cid:91)ecutive independent
Directors. Two Directors constitute a (cid:84)uorum. The present
members of the Audit and Risk Committee are Dr (cid:42)arnett
(cid:11)Chair(cid:12)(cid:15) Mr (cid:51)egler and Mr McMahon. The Company(cid:182)s Chief
(cid:41)inancial (cid:50)fficer(cid:15) Chief (cid:40)(cid:91)ecutive and (cid:47)egal Counsel (cid:9) 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 (cid:42)overnance section of (cid:40)RA(cid:182)s website.
The Committee provides a formal structure for reviewing (cid:40)RA(cid:182)s
The Audit and Risk Committee held three scheduled meetings
during 201(cid:23) and one e(cid:91)traordinary meeting. Attendance details
of the 201(cid:23) meetings of the Audit and Risk Committee(cid:15) and the
(cid:84)ualifications and e(cid:91)perience of the members(cid:15) are set out in the
Directors(cid:182) Report on pages (cid:25)2 and 5(cid:27) to 5(cid:28) 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. (cid:51)ricewaterhouseCoopers has
been (cid:40)RA(cid:182)s e(cid:91)ternal auditor for a number of years. (cid:40)ach year(cid:15)
the Audit and Risk Committee reviews the effectiveness of the
e(cid:91)ternal audit process and the independence of the auditor.
(cid:37)ased on its 201(cid:23) review(cid:15) the Audit and Risk Committee was
satisfied with the e(cid:91)ternal audit process and that the e(cid:91)ternal
auditor remained independent. Any work to be conducted by the
e(cid:91)ternal auditor other than the audit is approved by the Audit and
Risk Committee.
Details of the fees paid to (cid:51)ricewaterhouseCoopers during 201(cid:23)
are outlined on page (cid:27)3.
Diversity
(cid:40)RA acknowledges the benefits that (cid:192)ow from advancing (cid:37)oard
and employee diversity(cid:15) in particular gender and (cid:44)ndigenous
diversity. These benefits include identification and rectification
of gaps in the skills and e(cid:91)perience of Directors and employees(cid:15)
enhanced employee retention(cid:15) greater innovation and
ma(cid:91)imisation of available talent to achieve corporate goals and
increased financial performance.
Diversity in the conte(cid:91)t of the Company primarily refers to
groups which are under represented in its workforce. (cid:40)RA has a
particular focus on the representation of women and (cid:44)ndigenous
people in its workforce. (cid:40)RA(cid:182)s policy on diversity can be found on
the Company(cid:182)s website at www.energyres.com.au. (cid:44)n accordance
with the Company(cid:182)s diversity policy(cid:15) (cid:40)RA has set measurable
ob(cid:77)ectives to achieve diversity. The ob(cid:77)ectives and the Company(cid:182)s
progress in achieving each ob(cid:77)ective is set out below:
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
87
Energy Resources of Australia Ltd Financial Report 2014
88
CORPORATE GOVERNANCE STATEMENT
OBJECTIVE
OUTCOME
(cid:58)omen to represent 20 per
cent of the management
(cid:11)being manager level and
above(cid:12) and the (cid:37)oard by end
of 201(cid:23).
Target of 33 per cent
(cid:44)ndigenous people and 25 per
cent female participation in
new apprenticeships by end
of 201(cid:23).
As at 31 December 2014 female
participation at manager, general
manager and (cid:37)oard level is
1(cid:27) per cent. (cid:58)omen comprise
(cid:23)3 per cent of Directors. Total
female participation is 18 per
cent.
As at 31 December 201(cid:23)(cid:15) (cid:40)RA
has nine full time apprentices,
three of whom are (cid:44)ndigenous
(cid:11)33 percent(cid:12). (cid:44)n addition(cid:15)
(cid:40)RA has three school based
apprentices.
Target (cid:44)ndigenous
employment of 20 per cent by
the end of 201(cid:23).
(cid:40)RA ended 201(cid:23) with an
(cid:44)ndigenous employment rate of
12 per cent.
As at 31 December 201(cid:23)(cid:15) the proportion of women employed by
(cid:40)RA was as follows:
(cid:11)(cid:179)Rules for dealing(cid:180)(cid:12) apply to the participation of (cid:40)RA e(cid:91)ecutives
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 sub(cid:77)ect to and
conditional upon compliance with the terms of the Rules for
dealing, including an express prohibition on hedging or limiting of
e(cid:91)posure to economic risk in relation to such securities.
(cid:56)nder the (cid:40)RA Share Trading (cid:51)olicy:
(cid:135)
Directors and senior managers must advise the Chairman in
writing(cid:15) and receive approval in writing from the Chairman(cid:15)
if they intend to purchase or sell (cid:40)RA securities. (cid:44)n regard
to his own dealings(cid:15) the Chairman is re(cid:84)uired to notify the
Chair of the Audit and Risk Committee.
No dealings in (cid:40)RA securities may take place for the period
from the end of any relevant financial period to the trading
day following announcement of (cid:40)RA(cid:182)s annual results or half
year results.
(cid:135)
Particulars of the interests held by Directors are outlined on page
(cid:25)2 of the Remuneration Report.
Board of directors
(cid:40)(cid:91)ecutive committee
and managers
Company
43%
18%
18%
Risk identification and management
(cid:40)RA 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 (cid:37)oard(cid:15) with primary
oversight by the Audit and Risk Committee(cid:15) to ensure that
potential business risks are identified and appropriate action
taken.
Code of business conduct
(cid:40)RA has a Code of (cid:37)usiness Conduct to be met by all employees
and Directors. All employees are re(cid:84)uired to maintain high
standards of ethical behaviour in the e(cid:91)ecution 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 (cid:37)usiness Conduct is reviewed to ensure it
adequately addresses the issues facing the Company and is
available for inspection on the Corporate (cid:42)overnance section of
the Company(cid:182)s website at www.energyres.com.au.
(cid:44)n addition to the Company(cid:182)s Code of (cid:37)usiness Conduct(cid:15) the
Company(cid:182)s employees are re(cid:84)uired to comply with Rio Tinto(cid:182)s
statement of business practice The Way We Work(cid:15) available at
Rio Tinto(cid:182)s website at www.riotinto.com.
The Company has a confidential whistleblower programme
known as (cid:181)Speak(cid:16)(cid:50)(cid:56)T(cid:182). (cid:40)mployees are encouraged to report any
suspicion of unethical or illegal practices.
Purchase and sale of Company securities
(cid:40)RA has in place a formal policy that reinforces to all Directors(cid:15)
officers and employees the prohibitions against insider trading.
The Share Trading (cid:51)olicy is available for inspection at the
Corporate (cid:42)overnance section of the Company(cid:182)s website at
www.energyres.com.au.
(cid:44)n addition(cid:15) the (cid:179)Rules for dealing in securities of Rio Tinto(cid:180)
(cid:135)
(cid:135)
(cid:135)
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(cid:182)s internal
auditors and a detailed internal control process covering all of
(cid:40)RA(cid:182)s material business risks.
(cid:40)RA benefits from the Rio Tinto (cid:42)roup(cid:182)s knowledge(cid:15) policies
and practices on risk management and corporate assurance(cid:15)
developed to manage Rio Tinto(cid:182)s diverse business activities
covering a variety of commodities and operational locations.
Together(cid:15) these make up a comprehensive framework and
approach to risk analysis and risk management. The (cid:37)oard has
in place a number of systems to identify and manage business
risks.
These include:
(cid:135)
the identification and review of all of the business risks
known to be facing the Company(cid:30)
the provision of reports and information by management to
the (cid:37)oard(cid:15) on a periodic basis(cid:15) confirming the status and
effectiveness of the plans(cid:15) controls(cid:15) policies and procedures
implemented to manage business risks(cid:30)
guidelines for ensuring that capital e(cid:91)penditure and revenue
commitments e(cid:91)ceeding certain approved limits are placed
before the (cid:37)oard for approval(cid:30)
limits and controls for all financial e(cid:91)posures(cid:15) including the
use of derivatives(cid:30)
88
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
89
CORPORATE GOVERNANCE STATEMENT
(cid:135)
(cid:135)
a regulatory compliance programme(cid:30) and
safety(cid:15) health and environmental policies which are
supported by a set of standards and management systems
which recognise the Company(cid:182)s commitment to achieving
high standards of performance in all its activities in these
areas.
(cid:44)n 201(cid:23)(cid:15) the (cid:37)oard undertook an assessment of the strategic
risks to the Company(cid:182)s business and the mitigation strategies to
be implemented by management. The strategic risks identified
through this assessment were management of water(cid:30) cash(cid:192)ow
over the period 2015 to 201(cid:27)(cid:30) e(cid:91)ploration and the potential
development of the Ranger 3 Deeps resource(cid:30) stakeholder
support of the Company(cid:182)s strategic initiatives(cid:30) rehabilitation of the
Ranger (cid:51)ro(cid:77)ect Area(cid:30) internal controls relating to the Company(cid:182)s
license to operate(cid:30) e(cid:91)ternal events relating to the Company(cid:182)s
license to operate(cid:30) and access to future tenure and long term
development options.
These strategic risks are in addition to risks inherent to the
mining industry generally which include economic conditions
(cid:11)(cid:192)uctuations in commodity pricing and e(cid:91)change rates(cid:12)(cid:15)
international regulation of greenhouse gas emissions and impact
of climatic conditions.
The Chief (cid:40)(cid:91)ecutive and Chief (cid:41)inancial (cid:50)fficer give statements(cid:15)
in writing(cid:15) to the (cid:37)oard 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(cid:182)s position and of the results of the
Company(cid:182)s operations. These statements rely on (cid:40)RA(cid:182)s sound
system of risk management and internal compliance and control
which implements the policies adopted by the (cid:37)oard(cid:15) and confirm
that (cid:40)RA(cid:182)s risk management and internal compliance and control
system is operating efficiently and effectively in all material
respects. (cid:44)n 201(cid:23)(cid:15) all (cid:42)eneral Managers of the Company made a
declaration that they:
(cid:135)
understood the key re(cid:84)uirements of each business integrity
element of the Rio Tinto(cid:182)s The Way We Work(cid:30) and
had actively engaged with their direct reports to:
(cid:135)
Shareholder communication
(cid:40)RA recognises the importance of effective communication with
shareholders and the general investment community. Apart from
(cid:40)RA(cid:182)s compliance with its mandatory continuous disclosure
obligations(cid:15) (cid:40)RA takes steps to ensure that its shareholders
and other stakeholders are kept informed. (cid:41)ull advantage is
taken of the Annual (cid:42)eneral Meeting to inform shareholders of
current developments and to give shareholders the opportunity
to ask (cid:84)uestions. As recommended by the Council(cid:182)s (cid:51)rinciples(cid:15)
(cid:51)ricewaterhouseCoopers(cid:15) (cid:40)RA(cid:182)s e(cid:91)ternal auditor attends the
Annual (cid:42)eneral Meeting and is available to answer shareholder
questions about the conduct of the audit and the preparation
and content of the auditor(cid:182)s report. (cid:40)RA shareholders are also
able to submit written (cid:84)uestions regarding the statutory audit
report to the auditor via the Company. Any (cid:84)uestions received
and answers provided will be made available to members at the
Annual (cid:42)eneral Meeting. Shareholders who are unable to attend
meetings are encouraged to appoint a pro(cid:91)y to vote either as
they direct or at their discretion.
(cid:40)RA believes that investor seminars(cid:15) presentations and briefings
on financial and operational issues(cid:15) including social and
environmental performance(cid:15) are valuable ways of communicating
with relevant professionals(cid:15) employees and other interested
persons. The Chief (cid:40)(cid:91)ecutive and Chief (cid:41)inancial (cid:50)fficer
conduct regular meetings with the Company(cid:182)s ma(cid:77)or investors
and analysts(cid:15) and the Company organises investor briefings
to coincide with the release of half year and full year financial
results.
(cid:40)RA gives e(cid:84)ual access to information disclosed in investor
seminars(cid:15) presentations and briefings. (cid:44)f any such event is used
to disclose new material(cid:15) it will(cid:15) in advance or simultaneously(cid:15) be
disclosed to the AS(cid:59) and available on (cid:40)RA(cid:182)s website.
(cid:16) promote awareness of the business integrity values(cid:30) and
(cid:16) ensure compliance with the Company(cid:182)s e(cid:91)pectations
around each value.
Public statements and disclosure matters
(cid:40)RA makes full and immediate disclosures to its shareholders
and the market as re(cid:84)uired by(cid:15) and in accordance with(cid:15) its legal
and regulatory obligations. (cid:40)stablished systems are in place
to ensure compliance and matters that may have a material
impact on the price or value of (cid:40)RA(cid:182)s securities are reported to
the market in accordance with the AS(cid:59) (cid:47)isting Rules and the
Corporations Act 2001. (cid:40)RA(cid:182)s Continuous Disclosure (cid:51)olicy is
available on the Company(cid:182)s website at www.energyres.com.au.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
89
90
STATEMENT OF COMPREHENSIVE INCOME
Statement of Comprehensive Income
Statement of Comprehensive Income
For the year ended 31 December 2014
FOR THE YEAR ENDED 31 DECEMBER 2014
Revenue from continuing operations
Changes in inventories
Purchased materials (uranium oxide)
Materials and consumables used
(cid:40)mployee benefits and contractor e(cid:91)penses
(cid:42)overnment and other royalties
Commission and shipping expenses
Depreciation and amortisation expenses
Financing costs
Statutory and corporate expenses
Other expenses
Profit/(loss) before income tax
(cid:44)ncome ta(cid:91) (cid:11)e(cid:91)pense(cid:12)(cid:18)benefit
Profit/(loss) for the year
(cid:50)ther comprehensive income for the year(cid:15) net of ta(cid:91)
Total comprehensive income for the year
Profit/(loss) is attributable to:
(cid:50)wners of (cid:40)nergy Resources of Australia (cid:47)td
Total comprehensive income for the year is attributable to:
(cid:50)wners of (cid:40)nergy Resources of Australia (cid:47)td
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
2014
$’000
2013
$’000
3
401,798
370,144
4
4
4
4
5
(124,876)
14,140
(66,933)
(85,300)
-
(88,459)
(215,816)
(172,512)
(15,423)
(2,333)
(18,407)
(10,371)
(119,977)
(232,169)
(29,301)
(11,247)
(4,194)
(32,402)
(10,761)
(5,744)
(273,602)
(186,541)
85,802
50,712
(187,800)
(135,829)
-
-
(187,800)
(135,829)
(187,800)
(135,829)
(187,800)
(135,829)
27
27
(cid:11)3(cid:25).3(cid:12)
(cid:11)3(cid:25).3(cid:12)
(cid:11)2(cid:25).2(cid:12)
(cid:11)2(cid:25).2(cid:12)
The above statement of comprehensive income should be read in con(cid:77)unction with the accompanying notes.
90
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
91
BALANCE SHEET
Balance Sheet
Balance Sheet
As at 31 December 2014
AS AT 31 DECEMBER 2014
ASSETS
Current assets
Cash and cash e(cid:84)uivalents
Trade and other receivables
(cid:44)nventories
Other
Total current assets
Non-current assets
(cid:44)nventories
(cid:56)ndeveloped properties
Property, plant and equipment
Deferred tax assets
(cid:44)nvestment in trust fund
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Payables
(cid:44)ncome received in advance
(cid:51)rovisions
Total current liabilities
Non-current liabilities
(cid:51)rovisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
The above balance sheet should be read in con(cid:77)unction with the accompanying notes.
NOTES
2014
$’000
2013
$’000
7
8
9
10
11
12
13
14
15
16
17
18
19
20
20
293,318
357,208
11,232
20,107
146,559
248,522
1,392
2,305
452,501
628,142
85,728
203,632
358,485
174,627
66,751
112,584
203,632
530,346
88,897
63,960
889,223
999,419
1,341,724
1,627,561
55,621
14,911
40,552
72,512
-
91,223
111,084
163,735
485,033
485,033
596,117
745,607
529,804
529,804
693,539
934,022
706,485
389,918
706,485
390,533
(350,796)
(162,996)
745,607
934,022
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
91
92
STATEMENT OF CHANGES IN EQUITY
Statement of Changes in Equity
Statement of Changes in Equity
FOR THE YEAR ENDED 31 DECEMBER 2014
For the year ended 31 December 2014
Balance at 1 January 2013
(cid:51)rofit(cid:18)(cid:11)loss(cid:12) for the year
(cid:50)ther comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
(cid:40)mployee share options (cid:177) value of employee services
20
Balance at 31 December 2013
(cid:51)rofit(cid:18)(cid:11)loss(cid:12) for the year
(cid:50)ther comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
(cid:40)mployee share options (cid:177) value of employee services
20
CONTRIBUTED
EQUITY
$’000
RESERVES
$’000
RETAINED
EARNINGS
$’000
NOTES
TOTAL
$’000
706,485
390,301
(27,167)
1,069,619
-
-
-
-
-
-
232
232
(135,829)
(135,829)
-
-
(135,829)
(135,829)
-
-
232
232
706,485
390,533
(162,996)
934,022
-
-
-
-
-
-
-
-
(187,800)
(187,800)
-
-
(187,800)
(187,800)
(615)
(615)
-
-
(615)
(615)
Balance at 31 December 2014
706,485
389,918
(350,796)
745,607
The above statement of changes in e(cid:84)uity should be read in con(cid:77)unction with the accompanying notes.
92
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
93
CASH FLOW STATEMENT
Cash Flow Statement
Cash Flow Statement
FOR THE YEAR ENDED 31 DECEMBER 2014
For the year ended 31 December 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
(cid:11)inclusive of (cid:42)oods and Services Ta(cid:91)(cid:12)
Payments to suppliers and employees
(cid:11)inclusive of (cid:42)oods and Services Ta(cid:91)(cid:12)
(cid:51)ayments for e(cid:91)ploration and evaluation
Payments for rehabilitation
(cid:44)nterest received
Financing costs paid
(cid:44)ncome ta(cid:91)es (cid:11)paid(cid:12)(cid:18)refunded
NOTES
2014
$’000
2013
$’000
448,514
406,432
(368,975)
(294,468)
79,539
(83,205)
(56,977)
7,871
(1,219)
-
111,964
(66,186)
(73,327)
11,161
(1,465)
(29)
(cid:49)et cash (out(cid:192)o(cid:90))/in(cid:192)o(cid:90) from operating activities
26
(53,991)
(17,882)
CASH FLOW FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash (cid:11)out(cid:192)ow(cid:12)(cid:18)in(cid:192)ow from investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Employee share option payments
(cid:49)et cash (out(cid:192)o(cid:90))/in(cid:192)o(cid:90) from financing activities
Net increase(cid:18)(cid:11)decrease(cid:12) in cash and cash e(cid:84)uivalents
Cash and cash e(cid:84)uivalents at the beginning of the financial year
(cid:40)ffects of e(cid:91)change rate changes on cash and cash e(cid:84)uivalents
(11,590)
(91,133)
2,652
(8,938)
-
(91,133)
(962)
(962)
(1,106)
(1,106)
(63,891)
357,208
1
(110,121)
467,345
(16)
Cash and cash equivalents at end of year
7
293,318
357,208
The above cash (cid:192)ow statement should be read in con(cid:77)unction with the accompanying notes.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
93
94
NOTES TO THE FINANCIAL STATEMENTS
Notes to the Financial Statements
Notes to the 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(cid:15)
unless otherwise stated. The financial statements are for the
consolidated entity consisting of (cid:40)nergy Resources of Australia
(cid:47)td (cid:11)(cid:40)RA(cid:12) 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 the Company also comply with
(cid:44)nternational (cid:41)inancial Reporting Standards (cid:11)(cid:44)(cid:41)RS(cid:12) as issued by
the (cid:44)nternational Accounting Standards (cid:37)oard (cid:11)(cid:44)AS(cid:37)(cid:12).
(ii) Historical cost convention
These financial statements have been prepared under the
historical cost convention.
(iii) Critical accounting estimates
The presentation of financial statements re(cid:84)uires the use of
certain critical accounting estimates. (cid:44)t also re(cid:84)uires management
to exercise its judgement in the process of applying the account-
ing policies of the Company. The areas involving a higher degree
of (cid:77)udgement or comple(cid:91)ity(cid:15) or areas where assumptions and
estimates are significant to the financial statements are disclosed
in Note 2.
(b) Principles of consolidation
(i) Subsidiaries
(cid:50)n 11 September 2013(cid:15) (cid:40)(cid:58)(cid:47) Science (cid:51)ty (cid:47)td was deregistered.
At the time it was (cid:40)RA(cid:182)s only subsidiary. (cid:40)RA has no other
subsidiaries and is referred to in the financial report as the
Company.
Subsidiaries are all those entities (including special purpose
entities(cid:12) over which the Company has the power to govern
the financial and operating policies(cid:15) generally accompanying
a shareholding of more than one half of the voting rights. The
e(cid:91)istence and effect of potential voting rights that are currently
e(cid:91)ercisable or convertible are considered when assessing
whether the Company controls another entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Company. They are de(cid:16)consolidated from the
date that control ceases.
(cid:44)ntercompany transactions(cid:15) balances and unrealised gains
on transactions between (cid:42)roup companies are eliminated.
(cid:56)nrealised 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
Company.
(cid:11)c(cid:12) Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue are net
of returns(cid:15) trade allowances(cid:15) rebates and amounts collected on
behalf of third parties.
The Company recognises revenue when the amount of revenue
can be reliably measured, it is probable that future economic
benefits will (cid:192)ow to the entity and specific criteria have been met
for the Company(cid:182)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
Company bases its estimates on historical results(cid:15) taking into
consideration the type of customer, the type of transaction and
the specifics of each arrangement.
(i) Sale of goods
Sales are brought to account when the products pass from the
physical control of the Company pursuant to an enforceable
contract(cid:15) when selling prices are known or can be reasonably
estimated and when the products are in a form that re(cid:84)uires no
further treatment by the Company.
(cid:44)n the case where a sale occurs and immediately after which
(cid:11)part of(cid:12) the goods are borrowed back by the Company under a
separate agreement(cid:15) the revenue is deferred until repayment of
the borrowed goods occurs.
(ii) Rendering of services
Revenue from the rendering of services is recognised when the
service is provided.
(iii) Other revenue/income
(cid:50)ther revenue(cid:18)income recognised by the Company includes:
(cid:135)
interest income(cid:15) which is recognised on a time proportion
basis using the effective interest rate method(cid:30)
rental income(cid:15) which is recognised on a straight line basis(cid:30)
net gains on disposal of assets(cid:15) which is recognised at the
date control of the asset passes to the ac(cid:84)uirer(cid:30)
foreign e(cid:91)change gains(cid:30) and
insurance recoveries(cid:15) which is recognised on confirmation
from the insurer that the claim payment has been approved.
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(d) Foreign currency translation
(i) Functional and presentation currency
(cid:44)tems included in the financial statements are measured using
the currency of the primary economic environment in which
the entity operates (cid:11)(cid:179)the functional currency(cid:180)(cid:12). The financial
statements are presented in Australian dollars(cid:15) which is the
Company(cid:182)s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
94
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
95
NOTES TO THE FINANCIAL STATEMENTS
currency using the e(cid:91)change rates prevailing at the dates of
the transactions. (cid:41)oreign e(cid:91)change 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(cid:15) e(cid:91)cept when they are
deferred in e(cid:84)uity as (cid:84)ualifying cash (cid:192)ow hedges and (cid:84)ualifying
net investment hedges or are attributable to part of the net
investment in a foreign operation.
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.
(cid:50)ther movements in the provision for closure and restoration
costs(cid:15) including those resulting from new disturbance(cid:15) updated
cost estimates(cid:15) changes to lives of operations and revisions to
discount rates are capitalised within fi(cid:91)ed assets. These costs are
then depreciated on a unit of production basis over the life of the
reserves.
(e) Financing costs
Financing costs (including interest) are included in the statement
of comprehensive income in the period during which they are
incurred(cid:15) e(cid:91)cept where they are included in the cost of non(cid:16)
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 e(cid:91)penditure on the development
had not been made.
(cid:50)nce the asset is ready for use(cid:15) 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(cid:182)s outstanding borrowings during
the year.
(cid:11)f(cid:12) (cid:51)rovisions
(cid:51)rovisions are recognised when the Company has a present
legal or constructive obligation as a result of past events(cid:15) it is
probable that an out(cid:192)ow of resources will be re(cid:84)uired to settle
the obligation and the amount has been reliably estimated.
(cid:51)rovisions are not recognised for future operating losses.
(cid:51)rovisions are measured at the present value of management(cid:182)s
best estimate of the e(cid:91)penditure(cid:15) ad(cid:77)usted for risk(cid:15) re(cid:84)uired
to settle the present obligation at the balance sheet date. The
discount rate used to determine the present value re(cid:192)ects current
market assessments of the time value of money. The increase in
the provision due to the passage of time is recognised as interest
e(cid:91)pense.
(i) Rehabilitation
The Company is re(cid:84)uired to rehabilitate the Ranger (cid:51)ro(cid:77)ect Area
upon cessation of mining operations. The costs are estimated
on the basis of a closure model(cid:15) taking into consideration the
technical closure options available to meet the Company(cid:182)s
obligations and applying a probability weighting to each option
based on the likelihood of e(cid:91)ecuting each option. (cid:58)hen 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 re(cid:192)ect known developments(cid:15) and are
sub(cid:77)ect to regular reviews.
The amortisation or unwinding of the discount applied in
(cid:58)here rehabilitation is conducted systematically over the life
of the operation(cid:15) rather than at the time of closure(cid:15) 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(cid:15) the Company is re(cid:84)uired to maintain with the
Commonwealth (cid:42)overnment the Ranger Rehabilitation Trust
(cid:41)und (cid:11)(cid:179)Trust (cid:41)und(cid:180)(cid:12)(cid:15) to provide security against the estimated
costs of closing and rehabilitating the mine immediately (rather
than upon the planned cessation of mining operations(cid:12). (cid:40)ach
year, the Company is required to prepare and submit to the
Commonwealth (cid:42)overnment an Annual (cid:51)lan of Rehabilitation.
(cid:50)nce accepted by the Commonwealth (cid:42)overnment(cid:15) the annual
plan is then independently assessed and costed and the amount
to be provided by the Company in the Trust (cid:41)und(cid:15) is then
determined. The Trust (cid:41)und includes both cash and financial
guarantees. The cash portion is shown as an investment on the
balance sheet (cid:11)note 15(cid:12)(cid:15) and interest received by the Trust (cid:41)und
is shown as interest income.
The Company is re(cid:84)uired to rehabilitate the Jabiluka mineral
lease upon cessation of operations to a standard specified by
the Authorisation to operate issued by the Northern Territory
(cid:42)overnment. The estimated cost of rehabilitation is currently
secured by a bank guarantee and fully provided for in the
financial statements.
(cid:11)g(cid:12) (cid:44)ncome ta(cid:91)
(cid:44)ncome ta(cid:91) e(cid:91)pense for the period is the ta(cid:91) payable on the
current period’s taxable income based on the applicable income
ta(cid:91) rate ad(cid:77)usted by temporary differences between the ta(cid:91) bases
of assets and liabilities and their carrying amounts in the financial
statements(cid:15) and to unused ta(cid:91) losses.
The current income tax charge is calculated on the basis of
the ta(cid:91) laws enacted or substantively enacted at the end of the
reporting period in the country where the Company generates
ta(cid:91)able income (cid:11)Australia(cid:12).
Deferred income ta(cid:91) is provided in full(cid:15) using the liability method(cid:15)
on temporary differences arising between the ta(cid:91) bases of
assets and liabilities and their carrying amounts in the financial
statements. However(cid:15) the deferred income ta(cid:91) 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 ta(cid:91)able profit
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
95
96
NOTES TO THE FINANCIAL STATEMENTS
or loss. Deferred income ta(cid:91) is determined using ta(cid:91) rates
(cid:11)and laws(cid:12) that have been enacted or substantially enacted by
the reporting date and are e(cid:91)pected 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
ta(cid:91)able 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 ta(cid:91)
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 ta(cid:91) assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets and liabilities
and when the deferred ta(cid:91) balances relate to the same ta(cid:91)ation
authority. Current ta(cid:91) assets and ta(cid:91) 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 e(cid:84)uity are also recognised directly in e(cid:84)uity.
(cid:11)h(cid:12) Trade and other receivables
Trade receivables are recognised initially at fair value and
subse(cid:84)uently measured at amortised cost using the effective
interest method less provision for impairment.
Trade receivables are normally settled within (cid:23)5 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.
(cid:50)ther receivables relate to transactions outside the usual
operating activities of the Company 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.
(cid:11)i(cid:12) (cid:44)nventories
(cid:44)nventories(cid:15) other than stores(cid:15) 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(cid:15) including transport.
(cid:44)nventory is valued using the weighted average cost method and
includes both fi(cid:91)ed and variable production costs as well as cash
and non(cid:16)cash charges.
Stockpiles represent ore that has been e(cid:91)tracted and is available
for further processing. (cid:44)f there is significant uncertainty as
to when the stockpiled ore will be processed it is e(cid:91)pensed
as incurred. (cid:58)here the future processing of this ore can be
predicted with confidence(cid:15) for e(cid:91)ample because it e(cid:91)ceeds the
mine(cid:182)s cut off grade(cid:15) it is valued at the lower of cost and net
realisable value.
Stockpiled ore(cid:182)s net realisable value is calculated on a discounted
cash (cid:192)ow basis. (cid:44)f the ore will not be processed within 12 months
after the balance sheet date it is included within non(cid:16)current
assets.
(cid:58)ork in progress inventory includes ore stockpiles and other
partly processed material. (cid:52)uantities 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.
(cid:41)or 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(cid:182)s inventory. The uranium loans do not
meet the definition of a financial liability and are recorded net of
inventory.
(cid:11)(cid:77)(cid:12) (cid:44)mpairment 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 fre(cid:84)uently if events or changes in
circumstances indicate that they might be impaired. (cid:50)ther
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(cid:182)s carrying amount e(cid:91)ceeds its recoverable
amount. The recoverable amount is the higher of an asset(cid:182)s
fair value less cost to sell and value in use. (cid:41)or the purposes of
assessing impairment(cid:15) assets are grouped at the lowest levels
for which there are separately identifiable cash (cid:192)ows (cid:11)cash
generating units(cid:12).
(cid:41)air value is determined as the amount that would be obtained
from the sale of the asset in an arm(cid:182)s length transaction.
The value in use is determined using the present value of the
future cash(cid:192)ow e(cid:91)pected to be derived from an asset or cash
generating unit.
(cid:11)k(cid:12) (cid:51)roperty(cid:15) plant and e(cid:84)uipment
(cid:11)i(cid:12) (cid:36)c(cid:84)uisition
(cid:44)tems of property(cid:15) plant and e(cid:84)uipment are recorded at historical
cost and(cid:15) e(cid:91)cept for land(cid:15) are depreciated as outlined below.
Historical cost includes expenditure that is directly attributable
to the ac(cid:84)uisition of the items. Subse(cid:84)uent costs are included in
the asset’s carrying amount or recognised as a separate asset,
96
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
97
NOTES TO THE FINANCIAL STATEMENTS
as appropriate(cid:15) only when it is probable that future economic
benefits associated with the item will (cid:192)ow to the Company 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 e(cid:84)uipment is provided for as follows:
(cid:11)a(cid:12)
(cid:11)b(cid:12)
individual assets that have a life e(cid:84)ual 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(cid:30) 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 e(cid:84)uipment on which the depreciation charges are
based:
(cid:135)
(cid:135)
buildings (cid:177) units of production over the life of reserves(cid:30)
plant and e(cid:84)uipment(cid:13) (cid:177) 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.
(cid:135) (cid:50)ffice e(cid:84)uipment: computers (cid:16) three years
(cid:135) (cid:50)ffice e(cid:84)uipment: general (cid:16) five years
(cid:51)lant and e(cid:84)uipment (cid:16) five years
(cid:135)
(cid:135)
(cid:41)urniture (cid:9) fittings (cid:16) ten years
(cid:135) Motor vehicles (cid:16) five years
(cid:135)
(cid:135)
Tailings Storage Facility - three years
(cid:37)rine Concentrator (cid:16) 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
(cid:47)eases in which a significant portion of the risks and rewards
of ownership are not transferred to the Company as lessee are
classified as operating leases (cid:11)Note 22(cid:12). (cid:51)ayments made under
operating leases (cid:11)net of any incentives received from the lessor(cid:12)
are charged to the statement of comprehensive income on a
straight(cid:16)line basis over the period of the lease.
(iv) Mine properties
Mine properties(cid:15) consisting principally of Ranger (cid:51)ro(cid:77)ect Area
mining rights(cid:15) 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 subse(cid:84)uently 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.
(cid:11)l(cid:12) (cid:40)(cid:91)ploration and evaluation e(cid:91)penditure
(cid:40)(cid:91)ploration and evaluation e(cid:91)penditure comprises costs which
are directly attributable to:
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
researching and analysing e(cid:91)isting e(cid:91)ploration data(cid:30)
conducting geological studies, exploratory drilling and
sampling(cid:30)
construction of underground tunnels(cid:15) where necessary for
e(cid:91)ploration drilling(cid:30)
e(cid:91)amining and testing e(cid:91)traction and treatment methods(cid:30)
and
compiling prefeasibility and feasibility studies.
(cid:40)(cid:91)ploration and evaluation e(cid:91)penditure 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 ac(cid:84)uire interests in e(cid:91)isting pro(cid:77)ects.
Capitalisation of e(cid:91)ploration e(cid:91)penditure commences when
there is a high degree of confidence in the pro(cid:77)ect(cid:182)s viability and
hence it is probable that future economic benefits will (cid:192)ow to the
Company. Capitalised e(cid:91)ploration e(cid:91)penditure is reviewed for
impairment at each balance sheet date.
Subse(cid:84)uent recovery of the resulting carrying value depends
on successful development of the area of interest or sale of the
pro(cid:77)ect. (cid:44)f a pro(cid:77)ect does not prove viable(cid:15) all unrecoverable costs
associated with the pro(cid:77)ect 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. (cid:44)f the pro(cid:77)ect proceeds to
development(cid:15) the amounts included within intangible assets are
transferred to property(cid:15) plant and e(cid:84)uipment.
(i) Undeveloped properties
(cid:56)ndeveloped 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 (cid:37)oard and Audit and Risk Committee. (cid:44)mpairment is
assessed based on a status report regarding (cid:40)RA(cid:182)s intentions for
development of the undeveloped property and is reviewed using
the fair value less cost to sell method.
(cid:11)m(cid:12) (cid:42)oods and Services Ta(cid:91) (cid:11)(cid:42)ST(cid:12)
Revenues(cid:15) e(cid:91)penses and assets are recognised net of the
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
97
98
NOTES TO THE FINANCIAL STATEMENTS
amount of associated GST, unless the GST incurred is not
recoverable from the ta(cid:91)ation authority. (cid:44)n this case it is
recognised as part of the cost of acquisition of the asset or as
part of the e(cid:91)pense.
Receivables and payables are stated inclusive of the amount of
(cid:42)ST receivable or payable. The net amount of (cid:42)ST recoverable
from(cid:15) or payable to(cid:15) the ta(cid:91)ation authority is included with other
receivables or payables in the balance sheet.
Cash (cid:192)ows are presented on a gross basis. The (cid:42)ST
components of cash (cid:192)ows arising from investing or financing
activities which are recoverable from(cid:15) or payable to the ta(cid:91)ation
authority(cid:15) are presented as operating cash (cid:192)ows.
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 (cid:11)for instance when the forecast sale
that is hedged takes place(cid:12). (cid:58)hen a forecast transaction is no
longer e(cid:91)pected 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.
(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(cid:15)
whether or not billed to the Company. Trade accounts payable
are normally settled within (cid:25)0 days. These are recognised initially
at their fair value and subse(cid:84)uently measured at amortised cost
using the effective interest rate method.
(cid:11)o(cid:12) (cid:37)orrowings
(cid:37)orrowings are initially recognised at fair value(cid:15) net of transaction
costs incurred. (cid:37)orrowings are subse(cid:84)uently measured at
amortised cost. Any difference between the proceeds (cid:11)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.
(cid:37)orrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
(cid:11)p(cid:12) Derivatives
Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subse(cid:84)uently re(cid:16)
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 (cid:11)cash (cid:192)ow
hedges(cid:12).
The Company documents at the inception of the transaction
the relationship between hedging instruments and hedged
items(cid:15) as well as its risk management ob(cid:77)ective and strategy
for undertaking various hedge transactions. The Company also
documents its assessment, both at hedge inception and on
an ongoing basis(cid:15) 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 e(cid:84)uity in the hedging reserve. The gain or loss relating to the
ineffective portion is recognised immediately in the statement of
(q) Employee entitlements
(cid:11)i(cid:12) (cid:58)a(cid:74)es and salaries, annual leave and sic(cid:78) leave
The liability for employee entitlements to wages and salaries
represents the amount which the Company has a present
obligation to pay resulting from employees(cid:182) services provided
up to the reporting date. A provision e(cid:91)ists for annual leave and
accumulating sick leave as it is earned by employees and is
measured at the amount e(cid:91)pected to be paid when it is settled
and includes all related on costs. (cid:47)iabilities for non(cid:16)accumulating
sick leave are recognised when the leave is taken and measured
at the rates paid or payable.
(ii) Long service leave
The liability for long service leave e(cid:91)pected to be settled within
12 months of the reporting date is recognised in the provision
of employee benefits and is measured in accordance with (cid:11)i(cid:12)
above. The liability for long service leave e(cid:91)pected to be settled
more than 12 months from the reporting date is measured as
the present value of e(cid:91)pected future payments to be made in
respect of services provided by employees up to the reporting
date. Consideration is given to the e(cid:91)pected future wage and
salary levels(cid:15) e(cid:91)perience of employee departures and periods
of service.
Expected future payments are discounted using the rates
attaching to Commonwealth (cid:42)overnment securities at the
reporting date(cid:15) which most closely match the terms of maturity of
the related liabilities.
(iii) Superannuation plan
(cid:40)mployees of the Company are entitled to benefits on retirement(cid:15)
disability or death from their membership of the Rio Tinto Staff
Superannuation (cid:41)und (cid:11)(cid:179)The (cid:41)und(cid:180)(cid:12). The (cid:41)und has both a defined
benefit and a defined contribution section. Contributions to the
defined contribution superannuation plans are e(cid:91)pensed in the
income statement when incurred.
The defined benefits section currently has only one member from
the Company and as such any surplus or deficit of plan assets
are disclosed in the financial statements of the sponsoring entity(cid:15)
Rio Tinto Services (cid:47)imited.
98
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
99
NOTES TO THE FINANCIAL STATEMENTS
(cid:11)iv(cid:12) (cid:55)ermination benefits
Termination benefits are payable when employment is terminated
before the normal retirement date(cid:15) or when an employee
accepts voluntary redundancy in e(cid:91)change for these benefits.
The Company 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.
(cid:37)enefits 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 (cid:40)(cid:91)ecutive(cid:15) used to make
strategic decisions. The Chief (cid:40)(cid:91)ecutive considers the business
from a product perspective.
(cid:11)s(cid:12) Cash and cash e(cid:84)uivalents
(cid:41)or the purposes of the statement of cash (cid:192)ows(cid:15) cash includes
cash on hand and deposits held at call(cid:15) net of any bank
overdrafts.
(t) Contributed equity
(cid:50)rdinary shares are classified as e(cid:84)uity.
(cid:44)ncremental costs directly attributable to the issue of new shares
or options are shown in e(cid:84)uity as a deduction(cid:15) net of ta(cid:91)(cid:15) from the
proceeds.
(cid:44)ncremental 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 ac(cid:84)uisition as part of the purchase consideration.
(u) Earnings per share
(i) Basic earnings per share
(cid:37)asic earnings per share is determined by dividing net profit after
income tax attributable to members of the Company, excluding
any costs of servicing e(cid:84)uity other than ordinary shares(cid:15) by the
weighted average number of ordinary shares outstanding during
the financial year(cid:15) ad(cid:77)usted for bonus elements in ordinary shares
issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share ad(cid:77)usts the figures used in the
determination of basic earnings per share to take into account
the after income ta(cid:91) 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.
(cid:11)v(cid:12) Rounding of amounts
The Company is of a kind referred to in Class (cid:50)rder (cid:28)(cid:27)(cid:18)0100(cid:15)
issued by the Australian Securities and (cid:44)nvestments Commission(cid:15)
relating to the (cid:181)rounding off(cid:182) of amounts in the financial report.
Amounts in the financial report have been (cid:181)rounded off(cid:182) in
accordance with that Class (cid:50)rder to the nearest thousand
dollars(cid:15) or in certain cases(cid:15) to the nearest dollar.
(cid:11)w(cid:12) 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
e(cid:91)pense. 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 (cid:11)(cid:181)TSR(cid:182)(cid:12)
performance. (cid:41)air values are subse(cid:84)uently re(cid:16)measured at each
accounting date to re(cid:192)ect the number of awards e(cid:91)pected to
vest based on the current and anticipated TSR performance.
(cid:44)f any awards are ultimately settled in shares(cid:15) 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(cid:15) by the purchase of
shares on market or by the use of shares previously ac(cid:84)uired
as part of a share buyback. The fair value of the share plans is
recognised as an e(cid:91)pense over the e(cid:91)pected vesting period with
a corresponding entry to other reserves. (cid:44)f the cost of shares
acquired to satisfy the plans exceeds the expense charged, the
e(cid:91)cess is taken to the appropriate reserve. The fair value of the
share plans is determined at the date of grant(cid:15) taking into account
any market based vesting conditions attached to the award
(cid:11)e.g. Total Shareholder Return(cid:12). The Company uses fair values
provided by independent actuaries calculated using a lattice
based option valuation model.
Non(cid:16)market based vesting conditions (cid:11)e.g. earnings per share
targets(cid:12) 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(cid:15) at which point the estimate is ad(cid:77)usted to re(cid:192)ect the actual
awards issued. No ad(cid:77)ustment is made after the vesting date
even if the awards are forfeited or not e(cid:91)ercised.
(cid:41)urther information about the treatment of individual share based
payment plans is provided in Note 30.
(cid:11)(cid:91)(cid:12) Dividends
(cid:51)rovision is made for the amount of any dividend declared(cid:15)
determined or publicly recommended by the Directors on or
before the end of the financial year but not distributed at balance
date.
(cid:11)y(cid:12) New accounting standards and interpretations
Certain new accounting standards and interpretations have
been published that are not mandatory for 31 December 2014
reporting periods. The Company(cid:182)s assessment of the impact of
these new standards and interpretations is set out below.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
99
100
NOTES TO THE FINANCIAL STATEMENTS
(cid:11)i(cid:12) (cid:36)(cid:36)S(cid:37) (cid:28) (cid:41)inancial (cid:44)nstruments, (cid:36)(cid:36)S(cid:37) 200(cid:28)(cid:16)11 (cid:36)mendments
to (cid:36)ustralian (cid:36)ccountin(cid:74) Standards arisin(cid:74) from (cid:36)(cid:36)S(cid:37) (cid:28), (cid:36)(cid:36)S(cid:37)
2010-7 Amendments to Australian Accounting Standards arising
from (cid:36)(cid:36)S(cid:37) (cid:28) (cid:11)December 2010(cid:12) and (cid:36)(cid:36)S(cid:37) 2012(cid:16)(cid:25) (cid:36)mendments
to Australian Accounting Standards – Mandatory Effective Date
of (cid:36)(cid:36)S(cid:37) (cid:28) and (cid:55)ransition Disclosures (cid:11)effective from 1 (cid:45)anuary
2015).
AAS(cid:37) (cid:28) (cid:41)inancial (cid:44)nstruments addresses the classification(cid:15)
measurement and derecognition of financial assets and financial
liabilities. The standard is not applicable until 1 January 2015 but
is available for early adoption. The derecognition rules have been
transferred from AAS(cid:37) 13(cid:28) (cid:41)inancial (cid:44)nstruments: Recognition
and Measurement and have not been changed. There will be no
impact on the Company(cid:182)s accounting for financial liabilities(cid:15) as
the new re(cid:84)uirements only affect the accounting for financial li-
abilities that are designated at fair value through profit or loss and
the Company does not have any such liabilities.
(ii) AASB 15 Revenue from Contracts with Customers
AAS(cid:37) 15 (cid:181)Revenue from contracts with customers(cid:182) establishes
principles for reporting the nature, amount, timing and uncertainty
of revenue and cash (cid:192)ows arising from an entity(cid:182)s contracts with
customers. The standard is not applicable until 1 January 201(cid:26)
but is available for early adoption. (cid:40)RA has not yet determined
the e(cid:91)tent of the impact(cid:15) if any.
There are no other standards that are not yet effective and that
are e(cid:91)pected to have an impact on the entity in the current or
future reporting periods and in forecast transactions.
2
Critical accounting estimates and
judgements
(cid:40)stimates and (cid:77)udgements are continually evaluated and are
based on historical experience and other factors, including
e(cid:91)pectations of future events that may have a financial impact on
the Company and that are believed to be reasonable under the
circumstances.
The Company makes estimates and assumptions concerning
the future. The resulting accounting estimates will(cid:15) by definition(cid:15)
seldom e(cid:84)ual the related actual results. The estimates and
assumptions that have a significant risk of causing a material
ad(cid:77)ustment to the carrying amounts of assets and liabilities within
the ne(cid:91)t financial year are discussed below.
(cid:11)a(cid:12) 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 ad(cid:77)acent
areas of (cid:46)akadu National (cid:51)ark.
The costs are estimated on the basis of a rehabilitation model,
taking into account consideration to the preferred options
available to meet the Company(cid:182)s obligations. The provision for
rehabilitation represents the net present cost at 31 December,
based on current disturbance(cid:15) of the preferred plan within the
re(cid:84)uirements of the Ranger Authority.
The cost estimates are reviewed annually during the life of the
operation to re(cid:192)ect known developments. (cid:44)n 201(cid:23) this review
resulted in a decrease to the provision of (cid:7)(cid:26)(cid:23) million. The
change in estimate considered updated technology and learnings
from work conducted to date(cid:15) both on the Ranger (cid:51)ro(cid:77)ect Area
and other operations. The key change related to the use of more
efficient technology in thickening tailings transferred from the
e(cid:91)isting Tailings Storage (cid:41)acility to (cid:51)it 3. The overall rehabilitation
strategy remains unchanged.
The ultimate cost of rehabilitation is uncertain and can vary in
response to many factor. (cid:44)t is reasonably possible that outcomes
within the ne(cid:91)t financial year that are different from the current
cost estimate could require material adjustment (increase or
decrease(cid:12) to the rehabilitation provision for the Ranger (cid:51)ro(cid:77)ect
Area.
A key sensitivity in estimating the rehabilitation provision is the
discount rate applied to the underlying cash (cid:192)ows. The Company
has maintained a real discount rate of 2.5 per cent.
(b) Taxation
The Company has recognised certain deferred tax assets for
deductible temporary differences and recoverable losses carried
forward. (cid:44)n recognising these deferred ta(cid:91) assets assumptions
have been made regarding the Company(cid:182)s ability to generate
future ta(cid:91)able profits. A key assumption is the approval and
development of Ranger 3 Deeps mine(cid:15) should this not occur it is
unlikely ta(cid:91) 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 (cid:77)udgements and a possibility that changes in legislation will
impact the carrying amount of deferred tax assets and deferred
ta(cid:91) liabilities recognised on the balance sheet. (cid:41)urther details on
deferred ta(cid:91) assets are included in note 1(cid:23).
(cid:11)c(cid:12) Determination of ore reserves and resources
The Company estimates its ore reserves and resources based
on information compiled by Competent (cid:51)ersons as defined
in accordance with the Australasian Code for Reporting of
(cid:40)(cid:91)ploration Results(cid:15) Mineral Resources and (cid:50)re Reserves
of December 2012 (cid:11)the J(cid:50)RC code(cid:12). 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(cid:15) ultimately(cid:15) result in the reserves
being restated. Such changes in reserves could impact on
depreciation and amortisation rates(cid:15) asset carrying values and
100
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
amount.
At 31 December 201(cid:23)(cid:15) a (cid:7)(cid:23)2.(cid:25) million (cid:11)pre(cid:16)ta(cid:91)(cid:12) ad(cid:77)ustment was
made to finished goods inventory and a (cid:7)5.0 million (cid:11)preta(cid:91)(cid:12)
ad(cid:77)ustment to work in progress inventory to record it at its net
realisable value. This was due to high non(cid:16)cash costs and low
201(cid:23) production(cid:15) which drove the total unit cost of inventory
above the e(cid:91)pected sales price. The net realisable value
ad(cid:77)ustment has been included in (cid:181)Changes in inventories(cid:182) in the
statement of comprehensive income.
101
NOTES TO THE FINANCIAL STATEMENTS
provisions for rehabilitation. The Company(cid:182)s (cid:50)re Reserves and
Mineral Resources Statement as at 31 December 201(cid:23) is on
pages 2(cid:23) and 25.
(cid:11)d(cid:12) Asset carrying value
The Company has two cash generating units (cid:11)C(cid:42)(cid:56)(cid:12)(cid:15) the Ranger
(cid:51)ro(cid:77)ect Area (cid:11)R(cid:51)A(cid:12) and the Jabiluka mineral lease. The Ranger
C(cid:42)(cid:56) includes all assets and liabilities related to activities on the
R(cid:51)A(cid:15) including the rehabilitation provision and the associated
asset capitalised within property(cid:15) plant and e(cid:84)uipment. The
Jabiluka C(cid:42)(cid:56) relates to the Jabiluka mineral lease which is
currently under a long term care and maintenance agreement.
The Company(cid:182)s balance sheet contains items that have been
sub(cid:77)ect to impairment testing during the year.
(cid:58)hen the Company assesses C(cid:42)(cid:56)s for recoverability(cid:15) the
Company uses the greater of fair value less costs of disposal or
value in use. The Company has used the fair value less costs
of disposal method for the Ranger (cid:51)ro(cid:77)ect Area(cid:15) it has been
determined based on discounted cash (cid:192)ow modelling of a set of
probability weighted strategic outcomes.
The Company has concluded through detailed impairment testing
that Ranger C(cid:42)(cid:56) is not impaired.
(cid:44)t is reasonably possible that outcomes within the ne(cid:91)t financial
year that are different from the current assumptions around future
market prices(cid:15) resource and development potential(cid:15) discount
rate, rehabilitation, capital and production costs could require
a material adjustment (increase or decrease) to the carrying
amount of the Ranger (cid:51)ro(cid:77)ect Area.
Market consensus uranium price and e(cid:91)change rate are
determined by surveying a sample of brokers and financial
institutions to gather their estimation of both the long term
uranium price and A(cid:56)D(cid:18)(cid:56)SD e(cid:91)change rate.
The Company(cid:182)s financial modelling also includes the
development of Ranger 3 Deeps mine within and beyond
the term of the current Authority(cid:15) which remains sub(cid:77)ect to
stakeholder(cid:15) regulatory and (cid:40)RA (cid:37)oard approvals(cid:15) and to
which the Company has assigned a high probability. Should the
development of Ranger 3 Deeps not occur(cid:15) the Ranger C(cid:42)(cid:56)
would likely face significant impairment.
(cid:40)stimates and (cid:77)udgements associated with the Jabiluka
undeveloped property are disclosed in Note 12.
(cid:11)e(cid:12) (cid:44)nventory net realisable value
The calculation of net realisable value is sensitive to key
assumptions about the future including: uranium price(cid:15) A(cid:56)D(cid:18)(cid:56)SD
e(cid:91)change rate and where applicable costs to complete.
The sales price of uranium o(cid:91)ide is denominated in (cid:56)S dollars(cid:15)
so (cid:192)uctuations in the A(cid:56)D(cid:18)(cid:56)SD e(cid:91)change rate will affect the
proceeds received from sales and conse(cid:84)uently the recoverable
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
101
102
NOTES TO THE FINANCIAL STATEMENTS
3
Revenue
REVENUE FROM CONTINUING OPERATIONS
Sales revenue
Sale of goods
Rendering of services
Total sales revenue
Other revenue
(cid:44)nterest received(cid:18)receivable(cid:15) other parties
Rent received
Compensation uranium o(cid:91)ide received
Net gain on sale of property, plant and equipment
Total other revenue
Total revenue from continuing operations
2014
$’000
2013
$’000
378,955
355,868
211
271
379,166
356,139
10,662
13,073
862
9,415
1,693
932
-
-
22,632
14,005
401,798
370,144
102
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
103
NOTES TO THE FINANCIAL STATEMENTS
4
Expenses
LOSS BEFORE INCOME TAX INCLUDES
T(cid:43)E (cid:41)(cid:50)(cid:47)(cid:47)(cid:50)(cid:58)(cid:44)(cid:49)(cid:42) (cid:54)PEC(cid:44)(cid:41)(cid:44)C E(cid:59)PE(cid:49)(cid:54)E(cid:54):
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
NOTES
2014
$’000
2013
$’000
247,912
66,933
294,247
5,166
314,845
299,413
2,176
82,165
84,341
4,766
30,870
35,636
4,790
139,029
143,819
14,073
74,277
88,350
Total depreciation and amortisation expenses
119,977
232,169
Government and other royalties
Royalty payments
(cid:51)ayments to (cid:44)ndigenous interests
Total Government and other royalties
Financing costs
Other parties
(cid:56)nwinding of discount (cid:11)rehabilitation provision(cid:12)
Total Financing Costs
Doubtful debts expense
Net loss on disposal of property(cid:15) plant (cid:9) e(cid:84)uipment
Net foreign exchange loss/(gain)
Rental e(cid:91)pense relating to operating leases
Research and development e(cid:91)penditure
Total e(cid:91)ploration and evaluation e(cid:91)penditure
(cid:11)including Ranger 3 Deeps e(cid:91)ploration decline(cid:12)
Expenditure related to plant recommissioning
Defined contribution superannuation e(cid:91)pense
22
22
3,505
11,918
15,423
1,219
28,082
29,301
(43)
-
58
7,097
22,790
83,205
14,227
5,795
4,184
14,223
18,407
1,465
30,937
32,402
(91)
783
(146)
7,667
28,013
66,186
-
6,240
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
103
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
104
NOTES TO THE FINANCIAL STATEMENTS
5
(cid:44)ncome ta(cid:91) e(cid:91)pense(cid:18)(cid:11)benefit(cid:12)
(cid:44)(cid:49)C(cid:50)(cid:48)E T(cid:36)(cid:59) E(cid:59)PE(cid:49)(cid:54)E/((cid:37)E(cid:49)E(cid:41)(cid:44)T)
Current tax
Deferred tax
(cid:56)nder(cid:18)(cid:11)over(cid:12) provided in prior years
(cid:44)ncome tax expense/(benefit)
Deferred income ta(cid:91) (cid:11)revenue(cid:12)(cid:18)e(cid:91)pense included in income ta(cid:91) e(cid:91)pense 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% (2013 – 30%)
Ta(cid:91) effect of amounts which are not deductible(cid:18)(cid:11)ta(cid:91)able(cid:12) in calculating ta(cid:91)able income:
R(cid:9)D ta(cid:91) concession
Amortisation
Rehabilitation e(cid:91)penditure
Other items
(cid:44)ncome ta(cid:91) under(cid:18)(cid:11)over(cid:12) provided in prior years
(cid:44)ncome 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)
2014
$’000
2013
$’000
-
-
(85,814)
(50,937)
12
225
(85,802)
(50,712)
(70,641)
(15,173)
(85,814)
(48,197)
(2,740)
(50,937)
(273,602)
(186,541)
(82,081)
(55,962)
(2,278)
9,261
(2,801)
22,283
(10,721)
(14,464)
5
12
7
225
(85,802)
(50,712)
72
(29)
104
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
105
NOTES TO THE FINANCIAL STATEMENTS
(cid:25)
Dividends
Dividends paid or declared
No dividends have been paid or declared for the year ended 31 December 201(cid:23) (cid:11)2013: nil(cid:12).
Dividends franking account
(cid:41)ranking credits available for subse(cid:84)uent financial years
based on a tax rate of 30% (2013 – 30%)
2014
$’000
2013
$’000
234,095
234,095
The above amounts represent the balance of the franking account as at the end of the financial year(cid:15) ad(cid:77)usted for franking credits that
will arise from the payment of the amount of the provision for income ta(cid:91) as applicable.
The ability to utilise the franking account credits is dependent upon there being sufficient available profits to declare dividends.
(cid:26)
Cash and cash e(cid:84)uivalents
CURRENT
Cash at bank and in hand
Deposits at call
Cash and cash equivalents
2014
$’000
2013
$’000
6,188
287,130
293,318
3,294
353,914
357,208
Cash at bank(cid:18)Deposits at call
Cash assets and deposits bear (cid:192)oating interest rates between 0.0 per cent and 2.(cid:27) per cent (cid:11)2013 (cid:177) 0.0 per cent and 3.3 per cent(cid:12).
(cid:44)nterest rate risk e(cid:91)posure
The Company(cid:182)s e(cid:91)posure to interest rate risk is discussed in Note 2(cid:27).
(cid:27)
Trade and other receivables
CURRENT
Trade debtors
Other debtors
(cid:51)rovision for impairment
Net other debtors
Trade and other receivables
2014
$’000
2013
$’000
9,222
12,188
2,016
(6)
2,010
11,232
7,968
(49)
7,919
20,107
(cid:44)mpairment of receivables
No trade receivables are past due. There is no impairment of trade receivables.
(cid:50)ther receivables relate to transactions outside the usual operating activities of the Company and are predominately concerned with
receipts from employees and businesses operating within the Jabiru township. These ongoing activities are e(cid:91)pected to be settled
during the 12 months subse(cid:84)uent to balance date.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
105
106
NOTES TO THE FINANCIAL STATEMENTS
(cid:41)oreign e(cid:91)change and interest rate risk
The Company operates internationally but is primarily e(cid:91)posed to foreign e(cid:91)change risk arising from currency e(cid:91)posures with respect
to the (cid:56)S dollar.
A summarised analysis of the sensitivity of trade and other receivables to foreign e(cid:91)change and interest rate risk can be found in
Note 2(cid:27).
(cid:41)air value and credit risk
Due to the short(cid:16)term nature of trade and other receivables(cid:15) their carrying amount appro(cid:91)imates their fair value.
The ma(cid:91)imum e(cid:91)posure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above.
The Company does not hold any collateral as security. Refer to Note 2(cid:27) for more information on the financial risk management policy
of the Company.
(cid:28)
(cid:44)nventories (cid:177) current
Stores and spares
(cid:50)re stockpiles at cost
(cid:58)ork in progress at cost
(cid:58)ork in progress at net realisable value
(cid:41)inished product (cid:56)3O8 at net realisable value
Total current Inventory
2014
$’000
19,787
35,835
-
710
2013
$’000
23,730
27,721
2,602
-
90,227
146,559
194,469
248,522
(cid:44)nventory e(cid:91)pense
(cid:50)bsolescence of inventory provided for and recognised as an e(cid:91)pense during the year ended 31 December 201(cid:23) amounted to nil
(cid:11)2013: (cid:7)(cid:23)2(cid:25)(cid:15)(cid:23)2(cid:26)(cid:12).
(cid:58)rite(cid:16)downs of inventories to net realisable value recognised as an e(cid:91)pense during the year ended 31 December 201(cid:23) amounted to
(cid:7)(cid:23)(cid:26)(cid:15)(cid:25)05(cid:15)(cid:28)31 (cid:11)2013 (cid:16) (cid:7)21(cid:15)331(cid:15)(cid:25)(cid:26)(cid:28)(cid:12). This resulted from high non(cid:16)cash costs and low 201(cid:23) production. The e(cid:91)pense has been included
in (cid:181)Changes in inventories(cid:182) in the statement of comprehensive income.
10 Other assets
Prepayments
11
(cid:44)nventories (cid:177) non(cid:16)current
(cid:50)re stockpiles at cost
2014
$’000
1,392
2013
$’000
2,305
2014
$’000
2013
$’000
85,728
112,584
106
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
107
NOTES TO THE FINANCIAL STATEMENTS
12 (cid:56)ndeveloped properties
(cid:45)abilu(cid:78)a: (cid:47)ong(cid:16)term care and maintenance development pro(cid:77)ect
(cid:37)alance brought forward
Amount capitalised during the year
Total undeveloped properties
2014
$’000
2013
$’000
203,632
203,632
-
-
203,632
203,632
(cid:56)ndeveloped 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.
(cid:41)air value less cost to sell has been determined using a discounted cash (cid:192)ow model. (cid:46)ey assumptions to which the model is most
sensitive include:
(cid:135)
(cid:135)
(cid:135)
(cid:135)
(cid:135)
uranium prices(cid:30)
foreign e(cid:91)change rates(cid:30)
production and capital costs(cid:30)
discount rate(cid:30) and
ore reserves and mineral resources.
(cid:44)n determining the value assigned to each key assumption(cid:15) management has used e(cid:91)ternal sources of information and has utilised the
e(cid:91)pertise of e(cid:91)ternal consultants to validate entity(cid:16)specific assumptions such as costs(cid:15) production techni(cid:84)ues and mineral reserves.
(cid:41)urther(cid:15) the Company(cid:182)s cash (cid:192)ow forecasts are based on estimates of future uranium prices(cid:15) which assume market prices will revert
to the Company(cid:182)s assessment of the long term average price(cid:15) 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. (cid:44)t re(cid:192)ects e(cid:91)pected future cash(cid:192)ows contained in the long term asset plan with an ad(cid:77)ustment of cash(cid:192)ows e(cid:91)pected to take into
account pro(cid:77)ect development risk. The Company has pro(cid:77)ected cash(cid:192)ows for the period of the current mining lease(cid:15) together with a
ten year renewal period.
The Jabiluka Mineral (cid:47)ease is currently in long(cid:16)term care and maintenance. The Company has agreed that future mining development
will not occur without the consent of the Mirarr Traditional (cid:50)wners. There is no guarantee that this consent will be forthcoming and(cid:15) by
e(cid:91)tension(cid:15) that the Jabiluka deposit will be developed.
The discount rate applied to the future cash (cid:192)ow 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 (cid:192)ow estimates have not been ad(cid:77)usted.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
107
108
NOTES TO THE FINANCIAL STATEMENTS
13 Property, plant and equipment
MINE LAND AND
BUILDINGS
$’000
PLANT AND
EQUIPMENT
$’000
MINE
PROPERTIES
$’000
REHABILITATION
$’000
TOTAL
$’000
YEAR ENDED 31 DECEMBER 2014
(cid:50)pening net book amount
Additions
Disposals
Change in estimate
Transfers
Depreciation/amortisation charge
Closing net book amount
Cost
9,994
-
(324)
-
-
(2,176)
7,494
110,845
Accumulated depreciation/amortisation
(103,351)
Net book amount
YEAR ENDED 31 DECEMBER 2013
(cid:50)pening net book amount
Additions
Disposals
Change in estimate
Transfers
Depreciation/amortisation charge
Closing net book amount
Cost
7,494
14,699
-
-
-
85
(4,790)
9,994
111,169
Accumulated depreciation/amortisation
(101,175)
Net book amount
9,994
367,884
11,590
(635)
-
-
(82,165)
296,674
1,150,001
(853,327)
296,674
416,648
91,133
(783)
-
(85)
(139,029)
367,884
1,139,046
(771,162)
367,884
21,234
131,234
530,346
-
-
-
-
(4,766)
16,468
421,700
(405,232)
16,468
-
-
11,590
(959)
(62,515)
(62,515)
-
-
(30,870)
(119,977)
37,849
358,485
334,396
2,016,942
(296,547)
(1,658,457)
37,849
358,485
35,307
199,513
-
-
-
-
(14,073)
21,234
421,700
(400,466)
21,234
-
-
5,998
-
(74,277)
131,234
396,911
666,167
91,133
(783)
5,998
-
(232,169)
530,346
2,068,826
(265,677)
(1,538,480)
131,234
530,346
Assets under construction
The carrying amounts of the assets disclosed above include the following e(cid:91)penditure recognised in relation to property(cid:15) plant and
e(cid:84)uipment which is in the course of construction:
Plant and equipment
2014
$’000
5,969
2013
$’000
3,130
108
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
109
NOTES TO THE FINANCIAL STATEMENTS
14 Deferred tax assets
(A) DEFERRED TAX LIABILITY
The balance comprises temporary differences attributable to:
(cid:36)mounts recognised in profit and loss
(cid:44)nvestment in trust fund
(cid:56)ndeveloped properties
(cid:44)nventories
Receivables
Other
Total deferred tax liabilities
(cid:50)ff(cid:16)set of deferred ta(cid:91) asset pursuant to set(cid:16)off provisions (cid:11)Note 1(cid:23)(cid:37)(cid:12)
Net deferred tax liabilities
Movements
Opening balance at 1 January
(Credited)/debited to the income statement (Note 5)
(cid:56)nder 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:
(cid:36)mounts recognised in profit and loss
Tax losses
Research and development ta(cid:91) offset
Property, plant and equipment
Rehabilitation
(cid:40)mployee provisions
Other
Amount recognised directly in equity
Transaction costs
Share benefits
Total deferred tax assets
Set(cid:16)off of deferred ta(cid:91) liabilities pursuant to set(cid:16)off provisions (cid:11)Note 1(cid:23)A(cid:12)
Net deferred tax assets
Movements
Opening balance at 1 January
Credited to the income statement (Note 5)
(cid:11)(cid:56)nder(cid:12)(cid:18)over provided in prior years credited to the income statement
Credited to equity (Note 5)
Closing balance at 31 December
2014
$’000
2013
$’000
20,025
23,405
22,175
1,014
-
19,188
23,405
39,639
858
122
66,619
83,212
(66,619)
(83,212)
-
-
83,212
(15,173)
(1,420)
66,619
127,222
33,915
4,119
69,736
4,060
1,919
86,175
(2,740)
(223)
83,212
70,944
25,003
914
67,683
4,407
2,092
240,971
171,043
719
(444)
1,438
(372)
241,246
172,109
(66,619)
(83,212)
174,627
88,897
172,109
124,330
70,641
(1,432)
(72)
48,197
(447)
29
241,246
172,109
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
109
110
NOTES TO THE FINANCIAL STATEMENTS
15
(cid:44)nvestment in Trust (cid:41)und
NON-CURRENT
Trust Fund
2014
$’000
2013
$’000
66,751
63,960
Trust Fund
The Ranger Rehabilitation Trust (cid:41)und holds a restricted fi(cid:91)ed 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 201(cid:23) was 3.33 per cent (cid:11)2013:
3.(cid:26)0 per cent(cid:12).
16 Payables
CURRENT
Trade payables
Amounts due to related parties
Other payables
Total payables
1(cid:26) (cid:51)rovisions (cid:177) current
CURRENT
(cid:40)mployee benefits
(cid:47)each tank remediation
Rehabilitation
Total current provisions
2014
$’000
2013
$’000
48,870
5,833
918
55,621
66,271
4,433
1,808
72,512
2014
$’000
2013
$’000
9,345
-
31,207
40,552
11,535
1,300
78,388
91,223
(cid:47)each tank remediation
(cid:41)ollowing the failure of (cid:47)each Tank 1 on (cid:26) December 2013(cid:15) a provision for (cid:7)1(cid:15)300(cid:15)000 was raised to cover the remaining investigation
and deconstruction costs. These costs were incurred early in 201(cid:23).
Movements in provisions
Movements in the rehabilitation provision during the financial year is set out below:
2014
Carrying amount at the start of the year
Payments
Transfer from non(cid:16)current provision
Carrying amount at the end of the year
REHABILITATION
$’000
78,388
(56,977)
9,796
31,207
110
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
111
NOTES TO THE FINANCIAL STATEMENTS
2013
Carrying amount at the start of the year
Payments
Transfer from non(cid:16)current provision
Carrying amount at the end of the year
18 (cid:51)rovisions (cid:177) non(cid:16)current
NON-CURRENT
(cid:40)mployee 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:
2014
Carrying amount at the start of the year
Change in estimate
(cid:56)nwinding of discount
Additional provisions recognised
Transfer to current provision
Carrying amount at the end of the year
2013
Carrying amount at the start of the year
Change in estimate
(cid:56)nwinding of discount
Additional provisions recognised
Transfer to current provision
Carrying amount at the end of the year
REHABILITATION
$’000
66,227
(73,327)
85,488
78,388
2014
$’000
2013
$’000
4,188
480,845
485,033
4,728
525,076
529,804
REHABILITATION
$’000
525,076
(74,242)
28,082
11,725
(9,796)
480,845
REHABILITATION
$’000
573,629
127
30,937
5,871
(85,488)
525,076
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
111
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
112
NOTES TO THE FINANCIAL STATEMENTS
19 Share capital
SHARE CAPITAL
A Class shares fully paid
Total contributed equity
2014
SHARES
2013
SHARES
517,725,062
517,725,062
2014
$’000
706,485
706,485
2013
$’000
706,485
706,485
(cid:50)rdinary 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.
(cid:50)n a show of hands every holder of ordinary shares present at a shareholders(cid:182) meeting in person or by pro(cid:91)y(cid:15) is entitled to one vote(cid:15)
and upon a poll each share is entitled to one vote.
Capital risk management
Details of the Company(cid:182)s e(cid:91)posure to risks when managing capital are set out in Note 2(cid:27).
20 Reserves and retained profits
RESERVES
Share(cid:16)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
(cid:48)ovements in retained profits (cid:90)ere as follo(cid:90)s:
Opening retained earnings – 1 January
Net loss for the year
Dividends paid
Closing retained earnings/(accumulated losses) (cid:177) (cid:22)(cid:20) (cid:39)ecember
2014
$’000
2013
$’000
418
389,500
389,918
1,033
389,500
390,533
1,033
(615)
418
801
232
1,033
389,500
389,500
-
-
389,500
389,500
(162,996)
(27,167)
(187,800)
(135,829)
-
-
(350,796)
(162,996)
Nature and purpose of reserves
The share based payments reserve is used to recognise the fair value of e(cid:84)uity instruments issued to employees but not e(cid:91)ercised.
112
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
113
NOTES TO THE FINANCIAL STATEMENTS
Capital reconstruction reserve
(cid:44)n June 1(cid:28)(cid:28)5(cid:15) the Company reduced its share capital by cancelling (cid:7)0.(cid:28)5 of the capital paid up on each issued share and reducing the
par value of each issued share from (cid:7)1.00 to (cid:7)0.05. The cancelled capital (cid:11)comprising (cid:7)3(cid:27)(cid:28)(cid:15)500(cid:15)000 in total(cid:12) was credited to a Capital
Reconstruction Reserve. The Company has the ability to distribute capital to shareholders from this reserve.
21 Contingencies
Contingent liabilities
(cid:47)egal actions against the Company.
The remaining argument in the action listed in the (cid:41)ederal Court against the former Commonwealth Minister for Resources and the
Company claiming that due process was not followed in granting approvals for the Jabiluka Mill Alternative is dormant. Should the
Company proceed with the Jabiluka Mill Alternative(cid:15) 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 e(cid:91)penditure contracted for at the reporting date is as follows:
(cid:58)ithin one year
Lease commitments
(cid:41)uture 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
(cid:58)ithin one year
(cid:47)ater than one year but not later than five years
Total operating leases
2014
$’000
2013
$’000
50,051
83,242
2014
$’000
2013
$’000
1,753
4,821
6,574
2,882
4,928
7,810
The Company leases property(cid:15) plant and e(cid:84)uipment under operating leases e(cid:91)piring between one and four years. Some leases
provide the Company with a right of renewal at which time all terms are renegotiated.
Mineral tenement leases
(cid:41)uture mineral tenement lease payments not provided for in the financial statements and payable:
(cid:58)ithin one year
(cid:47)ater than one year but not later than five years
(cid:47)ater than five years
Total mineral tenement leases
2014
$’000
152
609
711
2013
$’000
138
554
784
1,472
1,476
(cid:44)n order to maintain current rights of tenure to mining tenements(cid:15) the Company will be re(cid:84)uired to outlay an amount of (cid:7)152(cid:15)2(cid:28)2 in the
year ending 31 December 2015 in respect of tenement lease rentals.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
113
Energy Resources of Australia Ltd Financial Report 2014
114
NOTES TO THE FINANCIAL STATEMENTS
The Company is liable to make payments to the Commonwealth as listed below:
(cid:11)i(cid:12)
(cid:11)ii(cid:12)
(cid:11)iii(cid:12)
An annual amount e(cid:84)ual to the sum payable by the Commonwealth to the Northern (cid:47)and Council pursuant to the Section
(cid:23)(cid:23) Agreement for rent for the duration of the agreement. This amounts to (cid:7)(cid:28)32(cid:15)(cid:28)00 for 201(cid:23) and is inde(cid:91)ed for future years.
Amounts e(cid:84)ual to the sums payable by the Commonwealth to the Aboriginal (cid:37)enefits Reserve pursuant to a determination
under Section 63(5) (b) of the (cid:36)bori(cid:74)inal (cid:47)and (cid:53)i(cid:74)hts (cid:11)Northern (cid:55)erritory(cid:12) (cid:36)ct 1(cid:28)(cid:26)(cid:25). The Company is re(cid:84)uired to pay 2.5 per
cent of Ranger net sales revenue to the Commonwealth and 1.(cid:26)5 per cent of Ranger net sales revenue to the Northern (cid:47)and
Council or an entity representing the Mirarr Traditional (cid:50)wners as directed by the Northern (cid:47)and Council (cid:11)amounts paid
during 201(cid:23): (cid:7)11(cid:15)(cid:28)1(cid:27)(cid:15)12(cid:28)(cid:30) 2013: (cid:7)1(cid:23)(cid:15)223(cid:15)3(cid:25)(cid:27)(cid:12).
Amounts e(cid:84)ual to sums payable by the Commonwealth to the Northern Territory pursuant to an understanding in respect of
financial arrangements between the Commonwealth and the (cid:42)overnment 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 (cid:11)amounts paid
during 201(cid:23): (cid:7)3(cid:15)505(cid:15)332(cid:30) 2013: (cid:7)(cid:23)(cid:15)1(cid:27)3(cid:15)3(cid:23)(cid:23)(cid:12).
The Company is liable to make payments to the Northern (cid:47)and Council pursuant to the Section (cid:23)3 Agreement between (cid:51)ancontinental
Mining (cid:47)imited and (cid:42)etty (cid:50)il Development Company (cid:47)imited and the Northern (cid:47)and Council dated 21 July 1(cid:28)(cid:27)2(cid:15) which was assigned
to the Company with the consent of the Northern (cid:47)and Council(cid:15) as listed below:
(cid:11)i(cid:12)
(cid:11)ii(cid:12)
(cid:56)p front payment of (cid:7)3(cid:15)(cid:23)00(cid:15)000 on the commencement of production at Jabiluka.
Annual royalty payments calculated at (cid:23).5 per cent of net sales revenue less (cid:7)500(cid:15)000 less any amounts paid to the
Aboriginal (cid:37)enefits 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 (cid:37)enefits Reserve by the
Commonwealth under the conditions specified in the mineral lease (cid:11)refer commitment below(cid:12).
The Company is liable to make payments to the Commonwealth in respect of the Jabiluka pro(cid:77)ect pursuant to the conditions attached
to the mineral lease. The amount payable was(cid:15) until 30 June 1(cid:28)(cid:28)0(cid:15) calculated at the rate of 5.25 per cent of net sales revenue
from the Jabiluka pro(cid:77)ect. The Jabiluka pro(cid:77)ect is now under long term care and maintenance and will not be developed without the
approval of the Mirarr Traditional (cid:50)wners.
23 Auditor’s remuneration
During the year the auditor of the parent entity and its related practices earned the following remuneration:
AUDIT SERVICES
Price(cid:90)aterhouseCoopers (cid:36)ustralian firm
Audit and review of financial reports
Audit and review of financial reports (cid:11)additiional 2013 fees(cid:12)
(cid:50)ther services
Total remuneration of Price(cid:90)aterhouseCoopers (cid:36)ustralia
2014
$’000
2013
$’000
310
40
-
350
230
-
-
230
114
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
115
NOTES TO THE FINANCIAL STATEMENTS
2(cid:23) Related parties
Directors
The names of persons who were Directors of the Company at any time during the financial period are as follows:
(cid:51)eter McMahon(cid:15) Helen (cid:42)arnett(cid:15) Andrea Sutton(cid:15) (cid:51)eter Taylor(cid:15) John (cid:51)egler(cid:15) Helen Newell (cid:11)resigned 11 June 201(cid:23)(cid:12)(cid:15) Joanne (cid:41)arrell
(cid:11)appointed 11 June 201(cid:23)(cid:12) and (cid:37)ruce Co(cid:91) (cid:11)appointed 2(cid:26) November 201(cid:23)(cid:12).
(cid:44)nformation relating to Directors(cid:182) compensation(cid:15) shareholdings and retirement benefits is set out in the Remuneration Report in the
Directors(cid:182) Report.
Key management personnel
Key management personnel compensation
Short(cid:16)term employee benefits
(cid:51)ost(cid:16)employment benefits
Share-based payments
2014
$’000
3,151
363
478
2013
$’000
3,382
363
574
3,992
4,319
(cid:44)n 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 (cid:25)3 to (cid:27)1.
(cid:47)oans with Directors and key management personnel
There were no loans with Directors or key management personnel during 201(cid:23) (cid:11)2013: nil(cid:12).
Transactions with Directors and Director(cid:16)related entities
There were no transactions with Directors or Director(cid:16)related entities other than Rio Tinto (cid:47)imited during 201(cid:23) (cid:11)2013: Nil(cid:12). Details of
transactions with Rio Tinto (cid:47)imited are outlined below.
(cid:56)ltimate parent entity
The ultimate parent entity is Rio Tinto (cid:47)imited. This interest is held through North (cid:47)imited (cid:11)incorporated in (cid:57)ictoria(cid:15) Australia(cid:12) which
has beneficial ownership of (cid:25)(cid:27).(cid:23) per cent of the issued ordinary shares of the Company. North (cid:47)td owns 3(cid:23).1 per cent directly and the
remaining 3(cid:23).3 per cent through its subsidiary(cid:15) (cid:51)eko(cid:16)(cid:58)allsend (cid:51)ty (cid:47)td.
(cid:44)nterest income
(cid:44)nterest income is received from Rio Tinto (cid:41)inance (cid:47)td which holds cash on behalf of the Company.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
115
116
NOTES TO THE FINANCIAL STATEMENTS
Transactions with related parties
The following transactions occurred with related parties:
(cid:48)anagement services fees paid to ultimate parent entity:
Rio Tinto (cid:42)roup Companies
Consulting fees paid to:
Rio Tinto (cid:42)roup Companies
(cid:50)ther reimbursements for commercial services:
Rio Tinto (cid:42)roup Companies
(cid:36)mounts received from related parties:
Rio Tinto (cid:42)roup Companies (cid:177) other
Rio Tinto (cid:42)roup Companies (cid:177) interest
(cid:39)ividends paid to:
Related parties (cid:177) North (cid:47)td
Related parties (cid:177) (cid:51)eko(cid:16)(cid:58)allsend (cid:51)ty (cid:47)td
2014
$’000
2013
$’000
1,600
1,600
9,153
12,787
85,718
14,669
245,118
1,827
49,774
2,925
-
-
-
-
Consulting fees paid to Rio Tinto (cid:42)roup Companies relate to technical services for ma(cid:77)or pro(cid:77)ects.
(cid:50)ther reimbursements for commercial services include the purchase of uranium o(cid:91)ide at market price (cid:11)201(cid:23): (cid:7)(cid:25)(cid:25)(cid:15)(cid:28)33(cid:15)2(cid:26)(cid:25) and 2013:
Nil(cid:12).
Amounts received from related parties include sales of uranium o(cid:91)ide at market price. (cid:44)n April 201(cid:23)(cid:15) the Company entered into a
marketing agreement with Rio Tinto (cid:56)ranium on the basis that it represents superior value to the Company(cid:182)s e(cid:91)isting marketing
agreements and the alternative marketing agreements considered. (cid:56)nder the new marketing agreement(cid:15) uranium o(cid:91)ide produced by
the Company is sold to Rio Tinto (cid:56)ranium and pooled with uranium o(cid:91)ide produced from the Namibian operation of R(cid:124)ssing (cid:56)ranium
(cid:47)imited(cid:15) a related party of Rio Tinto plc.
(cid:50)utstanding balances arising from sales(cid:18)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 (cid:90)ere as follo(cid:90)s:
2014
$’000
2013
$’000
Current assets - cash assets
Related parties (cid:16) Rio Tinto (cid:41)inance (cid:47)td
Current assets - receivables
Related parties (cid:16) Rio Tinto (cid:42)roup Companies
Current liabilities - creditors
Related parties (cid:16) Rio Tinto (cid:42)roup Companies
102,531
87,060
6,066
2,992
5,833
4,433
All related party transactions were conducted on arm(cid:182)s length terms and conditions and at market rates.
116
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
117
NOTES TO THE FINANCIAL STATEMENTS
25 Segment information
Description of segments
Management has determined the operating segment based on the reports reviewed by the Chief (cid:40)(cid:91)ecutive that are used to make
strategic decisions.
The Chief (cid:40)(cid:91)ecutive considers the business from a product prospective and has identified only one reportable segment in the year
ended 31 December 201(cid:23)(cid:15) being the mining(cid:15) processing and selling of uranium. There are no other unallocated operations.
Primary reporting – business segments
The segment information provided to the Chief (cid:40)(cid:91)ecutive for the reportable segment is as follows:
Revenue from e(cid:91)ternal customers
(cid:50)ther revenue
Total segment revenue
Segment result
(cid:44)ncome tax benefit
Profit for the year
Segment assets
Total assets
Segment liabilities
Total liabilities
Acquisitions of non-current assets
Depreciation and amortisation expense
Net (gain) loss on sale of property, plant and equipment
URANIUM
2014
$’000
2013
$’000
379,166
356,139
22,632
14,005
401,798
370,144
(273,602)
(186,541)
85,802
50,712
(187,800)
(135,829)
1,341,724
1,627,561
1,341,724
1,627,561
596,117
596,117
11,590
693,539
693,539
91,133
119,977
232,169
(1,693)
783
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
117
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
118
NOTES TO THE FINANCIAL STATEMENTS
Other segment information
Segment revenue
The revenue from e(cid:91)ternal parties reported to the Chief (cid:40)(cid:91)ecutive is measured in a manner consistent with that in the income
statement.
Revenues from e(cid:91)ternal 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 Company is domiciled in Australia. The result of its revenue from e(cid:91)ternal customers in other countries is outlined in the table
below:
Asia
(cid:56)nited States
Europe
Africa
Total revenue
SEGMENT REVENUES
FROM SALES TO
EXTERNAL CUSTOMERS
2014
$’000
260,549
108,569
8,461
1,376
378,955
2013
$’000
63,044
227,215
65,609
-
355,868
Segment revenues are allocated based on the country in which the customer is located. During 201(cid:23) the Company entered into a new
marketing agreement with Rio Tinto (cid:56)ranium based in Asia. Details are disclosed in Note 2(cid:23).
Segment assets
The amounts provided to the Chief (cid:40)(cid:91)ecutive 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(cid:15) receivables(cid:15) inventories(cid:15) property(cid:15) plant
and e(cid:84)uipment and other assets(cid:15) net of provisions.
All assets of the Company as at 31 December 201(cid:23) are in Australia with the e(cid:91)ception of inventories in transit or at converters of
(cid:7)(cid:25)0(cid:15)0(cid:27)(cid:23)(cid:15)(cid:26)20 (cid:11)2013: (cid:7)(cid:25)(cid:28)(cid:15)(cid:26)2(cid:26)(cid:15)00(cid:27)(cid:12). All ac(cid:84)uisitions of property(cid:15) plant and e(cid:84)uipment and other non(cid:16)current assets occurred in Australia.
Segment liabilities
The amounts provided to the Chief (cid:40)(cid:91)ecutive 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(cid:15) employee entitlements and provisions. The Company does not have any borrowings or derivative financial
instruments as at 31 December 201(cid:23).
118
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
119
NOTES TO THE FINANCIAL STATEMENTS
2(cid:25) Reconciliation of loss after income ta(cid:91) to net cash in(cid:192)ow(cid:18)(cid:11)out(cid:192)ow(cid:12) from
operating activities
Loss for the year
Add(cid:18)(cid:11)less(cid:12) items classified as investing(cid:18)financing activities:
2014
$’000
2013
$’000
(187,800)
(135,829)
Net (gain)/loss on sale of non-current assets
(1,693)
783
Add(cid:18)(cid:11)less(cid:12) non(cid:16)cash items:
Depreciation and amortisation
Non cash impairment charge
Rehabilitation provision: unwinding of discount
(cid:40)mployee benefits: share based payments
Net exchange differences
Change in operating assets and liabilities
(cid:11)(cid:44)ncrease(cid:12)(cid:18)decrease in trade and other receivables
(cid:11)(cid:44)ncrease(cid:12)(cid:18)decrease in inventories
(cid:11)(cid:44)ncrease(cid:12)(cid:18)decrease in other assets
(cid:11)(cid:44)ncrease(cid:12)(cid:18)decrease in investment in trust fund
(Decrease)/increase in payables
(cid:11)(cid:44)ncrease(cid:12)(cid:18)decrease in net provision for deferred ta(cid:91) assets
(cid:11)Decrease(cid:12)(cid:18)increase in provisions
(cid:49)et cash in(cid:192)o(cid:90)/(out(cid:192)o(cid:90)) provided from operating activities
27 Earnings per share
Basic earnings per share
Diluted earnings per share
119,977
232,169
-
28,082
346
(1)
-
30,937
1,338
16
8,875
22,047
128,819
(14,848)
913
(2,791)
(1,981)
(85,730)
(61,007)
(53,991)
(1,789)
(1,912)
(27,730)
(50,742)
(72,322)
(17,882)
2014
CENTS
(cid:11)3(cid:25).3(cid:12)
(cid:11)3(cid:25).3(cid:12)
2013
CENTS
(cid:11)2(cid:25).2(cid:12)
(cid:11)2(cid:25).2(cid:12)
(cid:40)arnings used in the calculation of basic and diluted earnings per share: 201(cid:23): (cid:7)(cid:11)187,799,509(cid:12) (cid:11)2013: (cid:7)(cid:11)135(cid:15)(cid:27)2(cid:27)(cid:15)(cid:27)5(cid:27)(cid:12)(cid:12).
(cid:58)eighted average number of ordinary shares on issue used in calculation of basic earnings per share: 201(cid:23): 51(cid:26)(cid:15)(cid:26)25(cid:15)0(cid:25)2 shares
(cid:11)2013: 51(cid:26)(cid:15)(cid:26)25(cid:15)0(cid:25)2(cid:12).
Options
(cid:50)ptions granted to employees under the share(cid:16)based payment plans are for options in Rio Tinto plc and Rio Tinto (cid:47)imited. Therefore(cid:15)
the options have not been included in the determination of diluted earnings per share. Details relating to the options are set out in
Note 30.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
119
120
NOTES TO THE FINANCIAL STATEMENTS
2(cid:27) (cid:41)inancial risk management
The Company carries out risk management under policies approved by the (cid:37)oard of Directors. The (cid:37)oard provides principles for
overall risk management(cid:15) as well as written policies covering specific areas(cid:15) such as mitigating interest rate and other risks(cid:15) use of
derivative and non(cid:16)derivative financial instruments.
The Company(cid:182)s business is mining and not trading. Accordingly(cid:15) the Company only contracts to sell uranium that it plans to produce(cid:15)
however purchasing uranium for resale may be re(cid:84)uired in circumstances where actual production falls short of contractual sales
volumes. The Company operates entirely in Australia and is e(cid:91)posed primarily to Australian dollar denominated costs. Sales are
denominated in (cid:56)S dollars.
Market risk
Foreign exchange risk
The Company markets its products internationally and is e(cid:91)posed to foreign e(cid:91)change risk arising from various currency e(cid:91)posures(cid:15)
primarily with respect to the (cid:56)S dollar. (cid:41)oreign e(cid:91)change risk arises from future commercial transactions and recognised assets and
liabilities that are denominated in a currency that is not the entity(cid:182)s functional currency. The risk is measured using sensitivity analysis
and cash (cid:192)ow forecasting. (cid:44)t is not Company policy to hedge against foreign e(cid:91)change risk.
The Company(cid:182)s e(cid:91)posure to foreign currency risk at the reporting date was as follows:
Trade receivables
Trade payables
2014
USD
$’000
5,259
466
2013
USD
$’000
10,873
283
(cid:42)roup sensitivity
At 31 December 201(cid:23)(cid:15) had the Australian Dollar weakened(cid:18)strengthened by 10 per cent against the (cid:56)S Dollar with all other variables
held constant(cid:15) the change in trade receivables would have effected post(cid:16)ta(cid:91) profit for the year by (cid:7)(cid:23)(cid:28)(cid:28)(cid:15)0(cid:28)(cid:27) higher(cid:18)lower (cid:11)2013:
(cid:7)(cid:27)53(cid:15)1(cid:27)5 higher(cid:18)lower(cid:12).
At 31 December 201(cid:23)(cid:15) had the Australian Dollar weakened(cid:18)strengthened by 10 per cent against the (cid:56)S Dollar with all other variables
held constant(cid:15) the change in trade payables would have effected post(cid:16)ta(cid:91) profit for the year by (cid:7)3(cid:28)(cid:15)(cid:27)05 higher(cid:18)lower (cid:11)2013: (cid:7)20(cid:15)(cid:25)3(cid:23)
higher(cid:18)lower(cid:12).
Commodity price risk
(cid:44)n the absence of uranium being traded on global futures e(cid:91)changes(cid:15) the Company uses a combination of both fi(cid:91)ed and market price
related contracts for future sales to manage this e(cid:91)posure. No financial instruments are used by the Company to manage commodity
price risk.
(cid:44)nterest rate risk
The Company(cid:182)s main interest rate risk arises from cash on deposit. (cid:58)hen cash is surplus to operational and investing re(cid:84)uirements it
is invested in lump sum deposits to ma(cid:91)imise interest received. (cid:44)n addition(cid:15) the Company is e(cid:91)posed to interest rate risk on cash in the
Ranger Rehabilitation Trust (cid:41)und.
Credit risk
The Company has no significant concentrations of credit risk. The Company has policies in place to ensure that sales of products
are made to customers with an appropriate credit history. (cid:58)here customers are rated by an independent credit rating agency(cid:15)
these ratings are used to set credit limits. (cid:44)f no independent rating e(cid:91)ists(cid:15) the credit (cid:84)uality of the customer is sub(cid:77)ect to e(cid:91)tensive
assessment. (cid:47)etters of credit and other forms of credit insurance are also used as re(cid:84)uired. Derivative counterparties(cid:15) cash
transactions and cash invested through the Ranger Rehabilitation Trust (cid:41)und are limited to high credit (cid:84)uality financial institutions. The
Company has policies that limit the amount of credit e(cid:91)posure to any one financial institution.
120
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
121
NOTES TO THE FINANCIAL STATEMENTS
TRADE RECEIVABLES
AA
A
BBB
Other
2014
$’000
-
9,222
-
-
2013
$’000
-
-
12,188
-
(cid:47)i(cid:84)uidity and capital risk
The Company(cid:182)s ob(cid:77)ectives when managing capital are to safeguard the Company(cid:182)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 Company does not have a target debt to e(cid:84)uity ratio(cid:15) but has a policy of maintaining a (cid:192)e(cid:91)ible financing structure to be able to
fund capital e(cid:91)penditure programmes(cid:15) pay dividends and fund e(cid:91)pansion opportunities as they arise. This policy is balanced against
the desire to ensure efficiency in the debt(cid:18)e(cid:84)uity structure of the Company(cid:182)s balance sheet in the longer term through pro(cid:16)active
capital management programmes.
The future li(cid:84)uidity and capital re(cid:84)uirements of the Company will depend on many factors. (cid:37)ased on current assumptions(cid:15)
including foreign e(cid:91)change rate(cid:15) prices(cid:15) costs(cid:15) resource and mining techni(cid:84)ues(cid:15) (cid:40)RA is likely to re(cid:84)uire capital at a future date for
the development of Ranger 3 Deeps. (cid:47)ikewise(cid:15) if Ranger 3 Deeps mine is not developed(cid:15) in the absence of any other successful
developments(cid:15) the Company may re(cid:84)uire an additional source of funding to fully fund the rehabilitation of the Ranger (cid:51)ro(cid:77)ect Area.
Any inability to obtain sufficient capital would have a material impact on the Company(cid:182)s business and financial performance.
(cid:40)ach year(cid:15) the Company is re(cid:84)uired to prepare and submit to the Commonwealth (cid:42)overnment an Annual (cid:51)lan of Rehabilitation.
(cid:50)nce accepted by the Commonwealth (cid:42)overnment(cid:15) the annual plan is then independently assessed and costed and the amount to
be provided by the Company into the Ranger Rehabilitation Trust (cid:41)und is then delivered. The Trust (cid:41)und includes both cash and
financial guarantees.
The Company(cid:182)s ability to access financial guarantees can be in(cid:192)uenced by many factors including(cid:15) future cash balance(cid:15) cash (cid:192)ows
and shareholder support. (cid:42)uarantees are generally renewed annually. Should renewal not occur(cid:15) additional cash would be re(cid:84)uired to
be deposited into the Trust (cid:41)und.
The Company has plans in place to address these risks.
The Company currently has no debt and (cid:7)2(cid:28)3(cid:15)31(cid:26)(cid:15)(cid:26)(cid:26)(cid:25) of cash on hand or at call (cid:11)Note (cid:26)(cid:12). No debt covenants e(cid:91)ist.
(cid:41)air value estimation
The carrying value less impairment provision of trade receivables and payables is a reasonable appro(cid:91)imation of their fair values due
to the short(cid:16)term nature of these amounts.
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
121
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
122
NOTES TO THE FINANCIAL STATEMENTS
2(cid:28) (cid:40)vents occurring after the reporting period
No matters or circumstances have arisen since the end of the financial year that have significantly affected(cid:15) or may significantly affect
the operations or state of affairs of the Company in subse(cid:84)uent financial years.
30 Share-based payments
(cid:40)RA participates in a number of share(cid:16)based payment plans administered by Rio Tinto plc and Rio Tinto (cid:47)imited(cid:15) which are described
in detail in the Remuneration Report. These plans have been accounted for in accordance with the fair value recognition provisions of
AAS(cid:37)2(cid:15) (cid:181)Share(cid:16)based (cid:51)ayment(cid:182)(cid:15) which means that AAS(cid:37)2 has been applied to all grants of employee share(cid:16)based payments that had
not vested as at 1 January 200(cid:23).
Performance Share Plan
The (cid:51)erformance Share (cid:51)lan (cid:11)(cid:51)S(cid:51)(cid:12) was revised in 2013 with details listed in the Remuneration Report.
The fair value awards granted under the (cid:51)S(cid:51) have been calculated at their dates of grant using a Monte Carlo valuation model
which takes into account the Total Shareholder Returns (cid:11)TSR(cid:12) performance conditions. No forfeitures are assumed. The awards are
accounted for in accordance with the re(cid:84)uirements applying to e(cid:84)uity(cid:16)settled sharebased payments transactions.
A summary of the status of shares granted under the share plan at 31 December 2014, and changes during the year, is presented
below:
BALANCE
AT START
OF THE
YEAR
11,843
(cid:7)52.3(cid:25)
979
(cid:133)3(cid:23).25
2014
Rio Tinto Limited
(cid:58)eighted average fair value
at grant date
Rio Tinto plc
(cid:58)eighted average fair
value at grant date
2013
GRANTED
DURING
THE YEAR
TRANSFERS
(cid:44)(cid:49)/((cid:50)(cid:56)T)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
VESTED AND
EXER-
CISABLE AT
END OF
THE YEAR
49
(2,473)
(827)
8,592
1,816
-
-
-
-
(cid:7)3(cid:28).13
(405)
(cid:7)(cid:26)5.(cid:27)1
(430)
(cid:7)(cid:26)5.(cid:27)1
(144)
(cid:133)31.2(cid:27)
(cid:133)3(cid:25).35
(cid:133)3(cid:25).35
Rio Tinto Limited
14,536
9,613
(12,306)
(cid:58)eighted average fair value
at grant date
Rio Tinto plc
(cid:58)eighted average fair value
at grant date
(cid:7)(cid:25)2.(cid:28)(cid:28)
(cid:7)3(cid:23).52
(cid:7)50.(cid:28)0
979
(cid:133)3(cid:23).25
-
-
-
-
-
-
-
-
-
-
-
-
(cid:7)(cid:23)3.00
(cid:7)(cid:25)2.2(cid:25)
-
-
-
-
11,843
3,300
(cid:7)52.3(cid:25)
(cid:7)(cid:26)5.(cid:27)1
979
574
(cid:133)3(cid:23).25
(cid:133)3(cid:25).35
The weighted average share price at the date of e(cid:91)ercise of rights to shares e(cid:91)ercised during the year ended 31 December 201(cid:23) was
(cid:7)(cid:25)5.(cid:28)1 (cid:11)2013: Nil(cid:12).
The weighted average remaining contractual life of rights to shares outstanding at the end of the period was 3 years (cid:11)2013: 3 years(cid:12).
(cid:58)here shares are issued to employees of subsidiaries within the Rio Tinto (cid:42)roup(cid:15) the subsidiaries compensate the parent for the
amount recognised as e(cid:91)pense in relation to these shares.
122
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
123
NOTES TO THE FINANCIAL STATEMENTS
Share Option Plan
The Share (cid:50)ption (cid:51)lan was discontinued in 2013 and as such no awards were made. (cid:44)t is policy to settle these awards in e(cid:84)uity(cid:15)
although the participants at their discretion can be offered a cash alternative. The awards are accounted for in accordance with
the re(cid:84)uirements applying to e(cid:84)uity(cid:16)settled share(cid:16)based payment transactions. The performance conditions in relation to Total
Shareholder Return (cid:11)TSR(cid:12) have been incorporated in the measurement of fair value for these awards by modelling the correlation
between Rio Tinto(cid:181)s TSR and that of the inde(cid:91). The relationship between Rio Tinto(cid:181)s TSR and the inde(cid:91) was simulated many
thousands of times to derive a distribution which(cid:15) in con(cid:77)unction with the lattice(cid:16)based option valuation model(cid:15) was used to determine
the fair value of the options. (cid:40)(cid:91)pected volatilities are based on the historical volatility of Rio Tinto(cid:182)s share return.
A summary of the status of options granted under the plan at 31 December 201(cid:23)(cid:15) and changes during the year(cid:15) is presented below:
BALANCE
AT START
OF THE
YEAR
GRANTED
DURING
THE YEAR
TRANSFERS
(cid:44)(cid:49)/((cid:50)(cid:56)T)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
VESTED AND
EXERCIS-
ABLE
AT END OF
THE YEAR
7,383
(cid:7)(cid:23)3.(cid:28)0
1,186
(cid:133)1(cid:25).53
10,789
(cid:7)(cid:23)0.01
1,186
(cid:133)1(cid:25).53
-
-
-
-
-
-
-
-
-
-
(2,487)
(cid:7)32.1(cid:26)
(1,186)
(cid:133)1(cid:25).53
-
-
324
(3,730)
(cid:7)(cid:23)0.(cid:27)1
(cid:7)(cid:23)1.(cid:26)0
-
-
-
-
-
-
-
-
-
-
-
-
4,896
4,896
(cid:7)(cid:23)(cid:28).(cid:27)(cid:26)
(cid:7)(cid:23)(cid:28).(cid:27)(cid:26)
-
-
-
-
7,383
7,383
(cid:7)(cid:23)3.(cid:28)0
(cid:7)(cid:23)3.(cid:28)0
1,186
1,186
(cid:133)1(cid:25).53
(cid:133)1(cid:25).53
2014
Rio Tinto Limited
(cid:58)eighted average
exercise price
Rio Tinto plc
(cid:58)eighted average
exercise price
2013
Rio Tinto Limited
(cid:58)eighted average
exercise price
Rio Tinto plc
(cid:58)eighted average
exercise price
The weighted average share price at the date of e(cid:91)ercise of options e(cid:91)ercised during the year ended 31 December 201(cid:23) was (cid:7)5(cid:27).(cid:26)(cid:27)
(cid:11)2013: (cid:7)(cid:25)5.21(cid:12).
The weighted average remaining contractual life of share options outstanding at the end of the period was 0 years (cid:11)2013: 0 years(cid:12).
(cid:58)here options are issued to employees of subsidiaries within the Rio Tinto (cid:42)roup(cid:15) the subsidiaries compensate the parent for the
amount recognised as e(cid:91)pense in relation to these options.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
123
124
NOTES TO THE FINANCIAL STATEMENTS
Share Savings (cid:51)lan
The Share Savings (cid:51)lan was replaced with the myShare Savings (cid:51)lan in 2013(cid:15) and as such no awards were made in 201(cid:23). Awards
under these plans are settled in e(cid:84)uity and accounted for accordingly. The fair value of each award on the day of grant was estimated
using a lattice(cid:16)based option valuation model(cid:15) including allowance for the e(cid:91)ercise price being at a discount to market price. A summary
of the status of options granted under the plan at 31 December 201(cid:23)(cid:15) and changes during the year(cid:15) is presented below:
BALANCE
AT START
OF THE
YEAR
20,345
(cid:7)5(cid:23).(cid:25)2
38,446
(cid:7)5(cid:23).55
GRANTED
DURING
THE YEAR
TRANSFERS
(cid:44)(cid:49)/((cid:50)(cid:56)T)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
VESTED
AND EXER-
CISABLE
AT END OF
THE YEAR
-
-
-
-
(2,689)
(2,371)
(1,508)
13,777
4,514
(cid:7)50.1(cid:27)
(cid:7)5(cid:28).2(cid:25)
(cid:7)5(cid:27).0(cid:27)
(cid:7)53.3(cid:25)
(cid:7)(cid:23)(cid:27).(cid:26)3
(1,355)
(9,082)
(7,664)
20,345
3,434
(cid:7)5(cid:23).(cid:23)0
(cid:7)(cid:23)(cid:27).(cid:26)3
(cid:7)(cid:25)1.25
(cid:7)5(cid:23).(cid:25)2
(cid:7)5(cid:28).2(cid:25)
2014
Rio Tinto Limited
(cid:58)eighted average
exercise price
2013
Rio Tinto Limited
(cid:58)eighted average
exercise price
The weighted average share price at the date of e(cid:91)ercise of conditional grants of shares e(cid:91)ercised during the year ended 31
December 201(cid:23) was (cid:7)(cid:25)1.(cid:27)1 (cid:11)2013: (cid:7)(cid:25)0.(cid:27)5(cid:12).
The weighted average remaining contractual life of share options outstanding at the end of the period was 2 years (cid:11)2013: 2 years(cid:12).
(cid:58)here shares are issued to employees of subsidiaries within the Rio Tinto (cid:42)roup(cid:15) the subsidiaries compensate the parent for the
amount recognised as e(cid:91)pense in relation to these shares.
myShare Savings (cid:51)lan
The myShare plan was introduced to all eligible staff members in 2013 and is described in the Remuneration Report. Awards under
this plan are settled in e(cid:84)uity and accounted for accordingly. The fair value of each award on the day of grant is set e(cid:84)ual to the share
price on the day of grant.
A summary of the status of options granted under the plan at 31 December 201(cid:23)(cid:15) and changes during the year(cid:15) is presented below:
BALANCE
AT START
OF THE
YEAR
GRANTED
DURING
THE YEAR
TRANSFERS
(cid:44)(cid:49)/((cid:50)(cid:56)T)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
VESTED
AND EXER-
CISABLE
AT END OF
THE YEAR
7,850
8,233
(1,120)
(cid:7)5(cid:25).3(cid:26)
(cid:7)5(cid:28).(cid:25)3
(cid:7)5(cid:25).0(cid:23)
-
-
7,901
(cid:7)5(cid:25)(cid:15)3(cid:28)
-
-
-
-
-
-
(582)
14,381
(cid:7)5(cid:25).3(cid:23)
(cid:7)5(cid:27).25
(51)
7,850
(cid:7)5(cid:28).0(cid:25)
(cid:7)5(cid:25).3(cid:26)
-
-
-
-
2014
Rio Tinto Limited
(cid:58)eighted average
exercise price
2013
Rio Tinto Limited
(cid:58)eighted average
exercise price
The weighted average share price at the date of e(cid:91)ercise of conditional grants of shares e(cid:91)ercised regularly during the year ended 31
December 201(cid:23) was nil (cid:11)2013: Nil(cid:12).
The weighted average remaining contractual life of share options outstanding at the end of the period was 3 years (cid:11)2013: 3 years(cid:12).
(cid:58)here shares are issued to employees of subsidiaries within the Rio Tinto (cid:42)roup(cid:15) the subsidiaries compensate the parent for the
amount recognised as e(cid:91)pense in relation to these shares.
124
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
125
NOTES TO THE FINANCIAL STATEMENTS
Management Share Plan
The Management Share (cid:51)lan was introduced in 200(cid:26) and is described in the Remuneration Report. The awards will be settled in
e(cid:84)uity including the dividends accumulated from date of award to vesting. The awards are accounted for in accordance with the
re(cid:84)uirements applying to e(cid:84)uity(cid:16)settled share(cid:16)based payment transactions. The fair value of each award on the day of grant is set
e(cid:84)ual 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 201(cid:23)(cid:15) and changes during the year(cid:15) is presented below:
BALANCE
AT START
OF THE
YEAR
GRANTED
DURING
THE YEAR
TRANSFERS
(cid:44)(cid:49)/((cid:50)(cid:56)T)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
VESTED
AND EXER-
CISABLE
AT END OF
THE YEAR
2014
Rio Tinto Limited
16,001
7,460
(2,581)
(4,402)
(cid:58)eighted average fair value
at grant date
Rio Tinto plc
(cid:58)eighted average fair
value at grant date
2013
(cid:58)eighted average fair value
at grant date
Rio Tinto plc
(cid:58)eighted average fair value
at grant date
(cid:7)(cid:25)1.(cid:25)(cid:27)
1,060
(cid:7)(cid:26)1.01
2,544
(cid:7)(cid:25)1.0(cid:23)
(cid:7)5(cid:26).31
(cid:133)(cid:23)0.5(cid:27)
(cid:133)31.1(cid:26)
(cid:7)53.(cid:26)2
(cid:7)(cid:25)3.(cid:23)5
(cid:133)3(cid:27).(cid:25)(cid:26)
(cid:133)3(cid:26).30
78
85
(cid:7)(cid:26)(cid:28).(cid:23)1
(1,138)
(cid:133)3(cid:28).(cid:28)(cid:23)
(cid:7)(cid:26)5.03
(1,569)
(cid:133)3(cid:26).30
-
-
-
-
Rio Tinto Limited
14,939
8,048
(2,069)
(4,917)
-
-
-
-
-
-
-
-
16,478
(cid:7)5(cid:26).35
-
-
16,001
(cid:7)(cid:25)1.(cid:25)(cid:27)
1,060
(cid:133)(cid:23)0.5(cid:27)
-
-
-
-
-
-
-
-
The weighted average share price at the date of e(cid:91)ercise of conditional grants of shares e(cid:91)ercised regularly during the year ended 31
December 201(cid:23) was (cid:7)(cid:25)2.53 (cid:11)2013: (cid:7)(cid:25)(cid:27).0(cid:26)(cid:12).
The weighted average remaining contractual life of conditional grants of shares outstanding at the end of the period was 2 years
(cid:11)2013: 3 years(cid:12).
The model inputs for conditional rights granted during the year ended 31 December 201(cid:23) included:
(cid:11)a(cid:12)
(cid:11)b(cid:12)
(cid:11)c(cid:12)
(cid:11)d(cid:12)
(cid:11)e(cid:12)
rights are granted for no consideration and have a three year life(cid:30)
e(cid:91)ercise price: nil (cid:11)2013: nil(cid:12)(cid:30)
grant date: 1(cid:26) March 201(cid:23) (cid:11)2013: 2(cid:26) March 2013(cid:12)(cid:30)
e(cid:91)piry date: 20 (cid:41)ebruary 201(cid:26) (cid:11)2013: 1(cid:23) (cid:41)ebruary 201(cid:25)(cid:12)(cid:30) and
share price at grant date: (cid:7)(cid:25)1.0(cid:23) (cid:11)2013: (cid:7)53.11(cid:12).
(cid:58)here shares are issued to employees of subsidiaries within the Rio Tinto (cid:42)roup(cid:15) the subsidiaries compensate the parent for the
amount recognised as e(cid:91)pense in relation to these shares.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
125
126
NOTES TO THE FINANCIAL STATEMENTS
Bonus Deferral Plan
The (cid:37)onus Deferral Award was established for the mandatory deferral of a specific percentage of the Chief (cid:40)(cid:91)ecutive(cid:182)s Short Term
(cid:44)ncentive (cid:51)lan 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 e(cid:84)uity including the dividends accumulated from date of award to vesting. The awards are accounted for
in accordance with the re(cid:84)uirements applying to e(cid:84)uity(cid:16)settled share based payment transactions. The fair value of each award on the
day of grant is e(cid:84)ual to share price on the day of grant less a small ad(cid:77)ustment for the timing of dividends vesting. No forfeitures are
assumed.
BALANCE
AT START
OF THE
YEAR
GRANTED
DURING
THE YEAR
TRANSFERS
(cid:44)(cid:49)/((cid:50)(cid:56)T)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING THE
YEAR
BALANCE
AT END of
THE YEAR
VESTED
AND EXER-
CISABLE
AT END OF
THE YEAR
2014
Rio Tinto Limited
(cid:58)eighted average fair
value at grant date
2013
746
943
(cid:7)53.11
(cid:7)(cid:25)0.35
Rio Tinto Limited
1,265
1,149
(1,359)
(309)
(cid:58)eighted average fair
value at grant date
(cid:7)(cid:25)(cid:28).35
(cid:7)53.11
(cid:7)55.5(cid:26)
(cid:7)(cid:27)1.00
-
-
-
-
1,689
(cid:7)5(cid:26).15
746
(cid:7)53.11
-
-
-
-
The weighted average share price at the date of e(cid:91)ercise of conditional grants of shares e(cid:91)ercised during the year ended 31
December 201(cid:23) was nil (cid:11)2013: (cid:7)(cid:25)5.1(cid:23)(cid:12).
The weighted average remaining contractual life of share options outstanding at the end of the period was (cid:23) years (cid:11)2013: (cid:23) years(cid:12).
(cid:58)here shares are issued to employees of subsidiaries within the Rio Tinto (cid:42)roup(cid:15) the subsidiaries compensate the parent for the
amount recognised as e(cid:91)pense in relation to these shares.
Expenses arising from share-based payment transactions
Total e(cid:91)penses arising from share(cid:16)based payment transactions recognised during the period as part of employee benefit e(cid:91)pense
were as follows:
Share based payment expense
2014
$’000
418
2013
$’000
1,338
126
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
127
DIRECTORS’ DECLARATION
Directors’ Declaration
Directors’ Declaration
(cid:44)n the Directors(cid:182) opinion:
(cid:11)a(cid:12)
the financial statements and notes set out on pages (cid:28)0 to 12(cid:25) are in accordance with the Corporations Act 2001 (Cth),
including:
(cid:11)i(cid:12)
(cid:11)ii(cid:12)
complying with Accounting Standards(cid:15) the Corporations Regulations 2001 and other mandatory professional
reporting re(cid:84)uirements(cid:30) and
giving a true and fair view of the Company(cid:182)s financial position as at 31 December 201(cid:23) and of its
performance for the financial year ended on that date(cid:30) and
(cid:11)b(cid:12)
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 (cid:11)a(cid:12) confirms that the financial statements also comply with (cid:44)nternational (cid:41)inancial Reporting Standards as
issued by the (cid:44)nternational Accounting Standards (cid:37)oard.
The Directors have been given the declarations by the Chief (cid:40)(cid:91)ecutive and the Chief (cid:41)inancial (cid:50)fficer re(cid:84)uired by section 2(cid:28)5A of the
Corporations Act 2001 (cid:11)Cth(cid:12). This declaration is made in accordance with a resolution of the directors.
P McMahon
Brisbane
12 February 2015
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
127
128
INDEPENDENT AUDITOR’S REPORT
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
company), which comprises the balance sheet as at 31 December 2014, the statement of
comprehensive income, statement of changes in equity and cash flow statement for the year
ended on that date, a summary of significant accounting policies, other explanatory notes and
the directors’ declaration.
Directors’ responsibility for the financial report
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 and for such internal control as the directors determine is necessary to
enable the preparation of the 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 Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards require
that we comply with relevant ethical requirements relating to audit engagements and plan and
perform the audit to obtain reasonable assurance whether the financial report is free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial report, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the 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 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 as evaluating the overall presentation of the financial
report.
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.
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
129
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report
Auditor’s opinion
In our opinion:
1.
the financial report of Energy Resources of Australia Ltd is in accordance with the
Corporations Act 2001, including:
2.
3.
giving a true and fair view of the company's financial position as at 31 December
2014 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.
4.
the company's financial report also complies with International Financial Reporting
Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the remuneration report included in pages 63 to 81 of the directors’ report for
the year ended 31 December 2014. 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 2014 complies with section 300A of the Corporations Act 2001.
PricewaterhouseCoopers
John O’Donoghue
Partner
Melbourne
12 February 2015
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
130
SHAREHOLDER INFORMATION
Shareholder Information
Shareholder Information
(cid:40)nergy Resources of Australia (cid:47)td is a for(cid:16)profit company limited by shares(cid:15) incorporated and domiciled in Australia.
The financial statements were authorised by Directors on 12 (cid:41)ebruary 2015. The Directors have the power to amend and reissue the
financial statements.
The shareholder information set out below was applicable as at 31 January 201(cid:23).
Distribution of equity securities
Analysis of numbers of registered e(cid:84)uity security holders by si(cid:93)e of holding:
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100(cid:15)001 and over
ORDINARY SHARES
NUMBER
OF SHARE-
HOLDERS
% OF
SHARE-
HOLDERS
7,592
4,117
1,411
1,369
80
52.11
2(cid:27).2(cid:25)
(cid:28).(cid:25)(cid:27)
(cid:28).(cid:23)0
0.55
NUMBER
OF SHARES
2,734,358
10,768,889
10,429,701
35,156,484
458,635,630
14,569
There were (cid:23)(cid:15)(cid:25)13 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 (cid:84)uoted e(cid:84)uity securities are listed below:
(cid:51)eko (cid:58)allsend (cid:47)td
North Limited
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
JP Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
(cid:52)(cid:44)C (cid:47)imited
National Nominees Limited
(cid:37)oda (cid:44)nvestments (cid:51)ty (cid:47)td
BNP Paribas Noms Pty Ltd
Ganra Pty Ltd
John E Gill Trading Pty Ltd
Ariki (cid:44)nvestments (cid:51)ty (cid:47)imited
Burleigh Heads Holdings Pty Ltd
Ariki (cid:44)nvestments (cid:51)ty (cid:47)imited
Pages Super Pty Ltd
(cid:56)(cid:37)S Nominees (cid:51)ty (cid:47)td
ABN Amro Clearing Sydney Nominees Pty Ltd
CS Fourth Nominees Pty Ltd
NUMBER
OF SHARES
177,535,718
176,543,136
52,414,925
12,986,956
9,358,479
8,853,218
2,632,600
1,597,449
1,092,899
868,572
739,753
651,429
531,000
500,000
475,000
400,000
400,000
393,890
328,073
310,297
% OF
ISSUED
SHARES
0.53
2.0(cid:27)
2.01
(cid:25).(cid:26)(cid:28)
(cid:27)(cid:27).5(cid:28)
100.00
% OF
ISSUED
SHARES
3(cid:23).2(cid:28)
3(cid:23).10
10.12
2.51
1.(cid:27)1
1.(cid:26)1
0.51
0.31
0.21
0.1(cid:26)
0.1(cid:23)
0.13
0.10
0.10
0.0(cid:28)
0.0(cid:27)
0.0(cid:27)
0.0(cid:27)
0.0(cid:25)
0.0(cid:25)
130
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
131
SHAREHOLDER INFORMATION
(cid:40)ntitlements to vote
Sub(cid:77)ect to any rights or restrictions for the time being attached to any shares on a show of hands(cid:15) every member present in person or
by pro(cid:91)y or by attorney or by representative and entitled to vote at a shareholders(cid:182) meeting shall have one vote.
(cid:50)n a poll(cid:15) every member present in person or by pro(cid:91)y or by attorney or by representative shall have one vote for each share held by
him(cid:18)her.
Annual General Meeting
The ne(cid:91)t Annual (cid:42)eneral Meeting will be held at (cid:28):30am on Tuesday 1(cid:23) April 2015 in Darwin(cid:15) Northern Territory(cid:15) Australia.
Ta(cid:91) file numbers
Ta(cid:91) file numbers or e(cid:91)emption details are recorded from shareholders who wish to provide the information. Dividend advice
statements(cid:15) when issued to shareholders(cid:15) indicate whether or not a shareholder(cid:182)s ta(cid:91) file number has been recorded. (cid:40)RA normally
pays fully franked dividends. (cid:44)n the event of an unfranked dividend being paid(cid:15) (cid:40)RA will be re(cid:84)uired to deduct ta(cid:91) at the top marginal
rate from the dividend paid to shareholders resident in Australia who have not supplied a ta(cid:91) file number or e(cid:91)emption form.
(cid:44)nformation on shareholding
Shareholders who re(cid:84)uire information about their shareholding or dividend payment should contact (cid:40)RA(cid:182)s principal registry.
Shareholders who have changed their address should advise the change in writing to:
(cid:40)RA Share Registry
Computershare Investor Services Pty Ltd
11(cid:26) (cid:57)ictoria Street
(cid:58)est (cid:40)nd (cid:52)(cid:47)D (cid:23)101
Telephone: (cid:14)(cid:25)1 (cid:11)0(cid:12) 3 (cid:28)(cid:23)(cid:26)3 2500
(cid:41)acsimile: (cid:14)(cid:25)1 (cid:11)0(cid:12) 3 (cid:28)(cid:23)15 (cid:23)000
Sponsored shareholders should note(cid:15) however(cid:15) that they should contact their sponsored broker to initiate a change of address.
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
131
132
2014 ASX ANNOUNCEMENTS
2014 ASX Announcements
2014 ASX Announcements
2(cid:26) Nov 201(cid:23)
Appointment of Director
31 Jan 2014
(cid:40)RA (cid:41)ull (cid:60)ear Results (cid:51)resentation
30 Jan 2014
Annual Statement of Reserves and Resources
30 Jan 2014
(cid:51)reliminary (cid:41)inal Report (cid:16) Appendi(cid:91) (cid:23)(cid:40)
30 Jan 2014
(cid:40)RA (cid:41)ull (cid:60)ear Results 2013
09 Jan 2014
December 2013 (cid:52)uarter (cid:50)perations Review
1(cid:28) Nov 201(cid:23)
Ranger 3 Deeps (cid:40)ighth (cid:40)(cid:91)ploration Result
22 Oct 2014
(cid:41)inal Report into Ranger (cid:47)each Tank
16 Oct 2014
(cid:41)urther (cid:56)nderground Drilling Results
09 Oct 2014
September 201(cid:23) (cid:52)uarter (cid:50)perations Review
03 Oct 2014
(cid:40)RA (cid:51)rogresses Ranger 3 Deeps Approvals
02 Oct 2014
Ranger 3 Deeps (cid:41)urther (cid:56)nderground Drilling
Results
17 Sep 2014 Ranger 3 Deeps (cid:56)pdated Resource Model
18 Aug 2014
Carbon Tax Substantiation Statement
13 Aug 2014
Ranger 3 Deeps (cid:40)(cid:91)ploration Drilling Results
01 Aug 2014
(cid:40)RA (cid:41)inancial Community (cid:51)resentation
31 Jul 2014
(cid:44)nterim Report 30 June 201(cid:23)
31 Jul 2014
June 201(cid:23) Half (cid:60)ear Results
31 Jul 2014
Continuous Disclosure Policy
10 Jul 2014
June 201(cid:23) (cid:52)uarter (cid:50)perations Review
20 Jun 2014
Ranger 3 Deeps Resource (cid:56)pdate
11 Jun 2014
Resignation and Appointment of Directors
05 Jun 2014
Ranger (cid:51)rocessing (cid:51)lant Restart Approved
05 Jun 2014
(cid:56)pdate on Restart of (cid:51)rocessing (cid:50)perations
27 May 2014 Change of Company Secretary
25 May 2014 May 201(cid:23) (cid:44)nvestor (cid:51)resentation
16 May 2014 Ranger 3 Deeps (cid:41)ourth (cid:40)(cid:91)ploration Results
10 May 2014 (cid:58)ork on (cid:56)nderground (cid:57)entilation Shaft
Temporarily Halted
30 Apr 2014
New Marketing Agreement
30 Apr 2014
CFO Announcement
09 Apr 2014
09 Apr 2014
09 Apr 2014
09 Apr 2014
201(cid:23) Annual (cid:42)eneral Meeting Results of
(cid:57)oting
2014 Annual General Meeting Chief
(cid:40)(cid:91)ecutive(cid:182)s Address
2014 Annual General Meeting Chairman’s
Address
Ranger (cid:47)each Tank Recovery (cid:56)pdate on
Restart of (cid:51)rocessing (cid:50)perations
08 Apr 2014
March 201(cid:23) (cid:52)uarterly (cid:50)perations Review
27 Mar 2014
Ranger (cid:47)each Tank Recovery (cid:56)pdate
20 Mar 2014
(cid:44)ndependent Surface (cid:58)ater (cid:58)orking (cid:42)roup
Review of Surface (cid:58)ater Management
17 Mar 2014
Resignation of C(cid:41)(cid:50) and Company Secretary
04 Mar 2014
Drilling Results Addendum
21 Feb 2014
(cid:40)RA (cid:58)ater Management Schematics
31 Jan 2014
(cid:41)inancial (cid:51)resentation (cid:41)ull (cid:60)ear Results
Details of these announcements are available at www.energyres.com.au.
132
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
133
TEN YEAR PERFORMANCE
Ten Year Performance
Ten Year Performance
YEAR ENDED 31
DECEMBER
Sales Revenue (cid:11)(cid:7)000(cid:12)
(cid:40)arnings (cid:37)efore (cid:44)nterest
and Ta(cid:91) (cid:11)(cid:7)000(cid:12)
(cid:51)rofit(cid:18)(cid:11)(cid:47)oss(cid:12) (cid:37)efore Ta(cid:91)
(cid:11)(cid:7)000(cid:12)
(cid:44)ncome Ta(cid:91) (cid:40)(cid:91)pense(cid:18)
(cid:11)(cid:37)enefit(cid:12) (cid:11)(cid:7)000(cid:12)
(cid:51)rofit(cid:18)(cid:11)(cid:47)oss(cid:12) After Ta(cid:91)
(cid:11)(cid:7)000(cid:12)
Total Assets (cid:11)(cid:7)000(cid:12)
Shareholders(cid:182) (cid:40)(cid:84)uity (cid:11)(cid:7)000(cid:12)
(cid:47)ong Term Debt (cid:11)(cid:7)000(cid:12)
Current Ratio
(cid:47)i(cid:84)uid Ratio
(cid:42)earing Ratio (cid:11)(cid:8)(cid:12)
(cid:44)nterest Cover (cid:11)times(cid:12)
Return on Shareholders(cid:182)
Equity (%)
Earnings Per Share (cents)
Dividends (cid:51)er Share (cid:11)cents(cid:12)
(cid:51)ayout Ratio (cid:11)(cid:8)(cid:12)
Share (cid:51)rice (cid:11)(cid:7)(cid:12) closing
(cid:51)rice(cid:16)(cid:40)arning Ratio
Dividend (cid:60)ield (cid:11)(cid:8)(cid:12)
Net Tangible Assets per
Share (cid:11)(cid:7)(cid:12)
No. of (cid:40)mployees
(cid:51)rofit After Ta(cid:91) per
(cid:40)mployee (cid:11)(cid:7)000(cid:12)
Ore Mined (million tonnes)
Ore Milled (million tonnes)
Mill Head (cid:42)rade (cid:11)(cid:8) (cid:56)3O8)
Mill Recovery (cid:11)(cid:8)(cid:12)
(cid:51)roduction (cid:11)tonnes (cid:56)3O8) –
Drummed
Sales (cid:177) Ranger Concen-
trates (cid:11)tonnes (cid:56)3O8)
Sales – Other Concentrates
(cid:11)tonnes (cid:56)3O8)
Sales (cid:177) Total (cid:11)tonnes (cid:56)3O8)
Note 1
Post rights issue
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
379,166 356,139 396,629 651,381 572,283 768,297 496,359 357,080 312,698 262,036
(284,274) (199,431) (278,266) (220,633)
47,726 374,737 317,957 108,012
68,745
65,452
(273,602) (186,541) (254,785) (206,340)
59,427 382,053 312,569
98,366
62,247
59,620
(85,802)
(50,712)
(36,026)
(52,741)
12,423 109,479
90,784
22,277
18,640
18,554
47,004 272,574 221,785
(187,800) (135,829) (218,759) (153,599)
41,066
1,341,724 1,627,561 1,826,275 1,948,972 1,423,396 1,359,131 1,170,409 985,353 869,350 864,162
745,607 934,022 1,069,619 1,288,536 951,076 966,574 758,926 606,021 552,491 539,764
-
3.(cid:27)
2.3
-
(cid:25).5
-
(cid:26).1
(cid:25).0
-
(cid:11)1(cid:26)(cid:26).(cid:28)(cid:12)
-
(cid:23).0
2.(cid:28)
-
(cid:11)15(cid:25).(cid:26)(cid:12)
-
1.(cid:27)
1.0
-
(cid:26).(cid:26)(cid:28)
-
3.(cid:23)
2.1
-
(cid:23)(cid:26).(cid:27)
-
3.1
2.2
-
33.5
-
(cid:23).1
2.(cid:26)
-
-
-
3.(cid:27)
2.3
-
-
-
1.5
0.(cid:27)
-
5.(cid:25)
-
3.(cid:25)
2.1
-
(cid:25).3
76,089
43,607
(cid:11)25.2(cid:12)
(cid:11)3(cid:25).3(cid:12)
-
-
1.30
(cid:11)3.5(cid:27)(cid:12)
-
(cid:11)1(cid:23).5(cid:12)
(cid:11)2(cid:25).2(cid:12)
-
-
1.2(cid:25)
(cid:11)(cid:23).(cid:27)1(cid:12)
-
1.(cid:23)(cid:23)
389
1.(cid:27)0
519
(cid:11)20.5(cid:12)
(cid:11)(cid:23)2.3(cid:12)
-
-
1.2(cid:26)
(cid:11)3.00(cid:12)
-
2.0(cid:26)
594
(cid:11)(cid:23)(cid:27)2.(cid:27)(cid:12)
-
1.3
0.11
(cid:27)1.5
(cid:11)2(cid:25)(cid:23).(cid:27)(cid:12)
-
2.3
0.15
(cid:27)(cid:23).(cid:27)
(cid:11)3(cid:26)(cid:23).5(cid:12)
3.(cid:27)
2.(cid:25)
0.1(cid:26)
(cid:27)(cid:25).2
(cid:11)11.(cid:28)(cid:12)
(cid:11)2(cid:28).(cid:26)(cid:12)1
-
-
1.23
(cid:11)2.5(cid:23)(cid:12)
-
2.(cid:23)(cid:28)
567
(cid:11)2(cid:26)0.(cid:28)(cid:12)
1.2
1.(cid:25)
0.1(cid:27)
(cid:27)(cid:26).(cid:28)
(cid:23).(cid:28)
2(cid:23).(cid:25)
(cid:27).0
32
11.13
(cid:23)5.2(cid:23)
2.(cid:28)(cid:25)
(cid:23).(cid:28)(cid:28)
523
(cid:27)(cid:28).(cid:27)(cid:26)
1.(cid:23)
2.(cid:23)
0.1(cid:28)
(cid:27)(cid:26).2
31.(cid:25)
1(cid:23)2.(cid:28)
3(cid:28).0
27
23.(cid:27)(cid:28)
1(cid:25).(cid:26)2
1.(cid:23)2
5.0(cid:26)
521
2(cid:28).2
11(cid:25).3
2(cid:27).0
24
1(cid:28).00
1(cid:25).3(cid:23)
1.(cid:23)(cid:26)
3.(cid:28)(cid:27)
519
523.1(cid:26)
2.2
2.3
0.2(cid:25)
(cid:27)(cid:27).3
(cid:23)2(cid:26).33
3.5
2.0
0.30
(cid:27)(cid:27).2
13.1
3(cid:28).(cid:28)
20.0
28
1(cid:28).50
(cid:23)(cid:27).(cid:27)(cid:27)
1.03
3.20
419
1(cid:27)1.(cid:25)
2.(cid:28)
1.(cid:28)
0.31
(cid:27)(cid:27).2
(cid:27).0
22.(cid:28)
1(cid:26).0
74
20.(cid:27)0
(cid:28)0.(cid:28)(cid:27)
0.(cid:27)2
2.(cid:28)0
385
113.3
3.3
2.0
0.2(cid:25)
(cid:27)(cid:26).5
(cid:26).(cid:25)
21.5
1(cid:26).0
80
10.02
(cid:23)(cid:26).(cid:26)0
1.(cid:26)0
2.(cid:27)0
354
11(cid:25).0
2.2
2.3
0.2(cid:28)
(cid:27)(cid:27).3
1,165
2,960
3,710
2,641
3,793
5,240
5,339
5,412
4,748
5,910
2,164
2,767
2,665
3,258
4,373
5,497
5,272
5,324
5,760
5,552
984
48
558
3,148
2,815
3,223
1,908
5,167
653
–
–
–
–
136
5,026
5,497
5,272
5,324
5,760
5,688
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
133
Definition of statistical ratios
Current Ratio
(cid:47)i(cid:84)uid Ratio
foreign exchange
(cid:42)earing Ratio
(cid:44)nterest Cover
Return on Shareholders(cid:182) (cid:40)(cid:84)uity
(cid:40)arnings per Share
(cid:32)
(cid:32)
(cid:32)
(cid:32)
(cid:32)
(cid:32)
current assets(cid:18)current liabilities
(cid:11)current assets(cid:16)inventory(cid:16)prepayments(cid:16)foreign e(cid:91)change hedge asset on borrowings(cid:12)(cid:18)(cid:11)current liabilities(cid:16)bank overdraft (cid:177)
hedge liability)
(cid:11)long term debt (cid:14) term creditors(cid:12)(cid:18)(cid:11)shareholders(cid:182) e(cid:84)uity (cid:14) long term debt (cid:14) term creditors(cid:12)
earnings before interest and ta(cid:91)(cid:18)interest e(cid:91)pense
profit after ta(cid:91)(cid:18)average shareholders(cid:182) e(cid:84)uity
profit after ta(cid:91)(cid:18)weighted average number of shares issued
134
INDEX
Index
Index
2014 Announcements
2015 (cid:50)b(cid:77)ectives
Auditor(cid:182)s (cid:44)ndependence Declaration
Balance Sheet
Business Strategy
Cash (cid:41)low Statement
Chairman(cid:182)s Report
Chief (cid:40)(cid:91)ecutive(cid:182)s Report
Community
Company (cid:51)rofile
Corporate (cid:42)overnance Statement
Director’s Declaration
Director(cid:182)s Report
Employment
(cid:40)nvironment
Financial Performance
Future Supply
Health and Safety
(cid:44)ndependent Auditor(cid:182)s Report
Land
Market and Customers
Notes to the Financial Statements
(cid:50)perating and (cid:41)inancial Review
Operations
(cid:50)verview
Radiation monitoring
Ranger 3 Dedps Social (cid:44)mpact Assessment
Ranger (cid:50)re Reserves
Regulatory (cid:41)ramework
Shareholder (cid:44)nformation
Statement of Changes in Equity
Statement of Comprehensive (cid:44)ncome
Sustainable Development
Ten Year Performance
132
10
84
91
16
93
6
8
51
5
85
127
66
48
41
12
22
30
128
45
26
94
12
14
40
32
54
23
36
130
92
90
40
133
134
Energy Resources of Australia Ltd Financial Report 2014
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
135
INDEX
(cid:43)ead Office
(cid:47)evel 3(cid:15) (cid:40)nergy House
1(cid:27)(cid:16)20 Cavenagh Street
GPO Box 2394
Darwin NT 0(cid:27)01
Tel: (cid:14)(cid:25)1 (cid:11)0(cid:12) (cid:27) (cid:27)(cid:28)2(cid:23) 3500
(cid:41)a(cid:91): (cid:14)(cid:25)1 (cid:11)0(cid:12) (cid:27) (cid:27)(cid:28)2(cid:23) 3555
www.energyres.com.au
Ranger Mine
(cid:47)ocked (cid:37)ag 1
Jabiru NT 0886
(cid:53)e(cid:74)istered Office
(cid:40)nergy Resources of Australia (cid:47)td
c/ Mallesons Stephen Jacques
(cid:47)evel 5(cid:15) N(cid:44)CTA (cid:37)uilding (cid:37)
7 London Circuit
Canberra City ACT 2601
Energy Resources of Australia Ltd Financial Report 2014
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
Energy Resources of Australia Ltd Financial Report 2014
135
136
INDEX
This page has been left blank intentionally
ENERGY RESOURCES OF AUSTRALIA LTD ANNUAL REPORT 2014
E
N
E
R
G
Y
R
E
S
O
U
R
C
E
S
O
F
A
U
S
T
R
A
L
I
A
L
T
D
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
4
Surrounding environment remained
protected, as confirmed by the
Supervising Scientist
Ranger 3 Deeps Exploration
Decline completed
Produced 1,165 tonnes
of uranium oxide
Strong cash position
maintained
Reduction in
employee numbers
with end of Pit 3
initial backfill
Implemented process
safety improvement
action plan