ANNUAL
REPORT
2015
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2015 YEAR IN REVIEW
Produced 2,005 tonnes and sold 2,183 tonnes
of uranium oxide.
Refer to page 7 and page 10 for further detail
$72 million in positive
cash flow, $365 million
cash at bank.
Refer to page 7 for further detail
Net loss after tax
$275 million.
Refer to page 7 for further detail
$405 million spent on
rehabilitation and water
management since
2012.
Refer to page 28 for further detail
Commissioning of the dredge to transfer tailings
from Tailings Storage Facility.
Refer to page 11 for further detail
Ranger 3 Deeps Mineral Resource
upgrade to 43,858 tonnes of
contained uranium oxide.
Ranger 3 Deeps Project deferred
following completion of Prefeasibility
Study.
Refer to page 16 for further detail
Refer to page 13 for further detail
Revegetation works
at Jabiluka complete
with 16,000 plants
over 10 years planted.
Refer to page 32 for further detail
Capping of Pit 1
80% complete.
Refer to page 12 for further detail
Female employment
participation rate 17%,
Indigenous participation
rate 13%.
Refer to page 33 for further detail
Process Safety
Improvement Action
Plan implemented.
Return to service
of critical assets
progressed.
Refer to page 10 for further detail
Refer to page 10 for further detail
t ERA Processing Technician Kevin Horace checks over drummed uranium oxide before it is shipped to customers
ii
ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT 2015 YEAR IN REVIEW
Sales Revenue ($M)
Drummed Production Tonnes (t)
651.4
2011
2012
2013
2014
2015
369.6
356.1
379.2
332.8
2011
2012
2013
2014
2015
1,165
2,005
2,641
2,960
3,710
Net Profit After Tax ($M)
Indigenous Employees (FTE’s)
2011
2012
2013
2014
2015
-153.6
-218.8
-135.8
-187.8
-275.5
2011
2012
2013
2014
2015
99
103
79
47
49
Operating Cashflow ($M)
All Injury Frequency Rate (per 200,000 hrs worked)
2011
2012
2013
2014
2015
-3.3
-17.9
-54.0
54.9
84.6
2011
2012
2013
2014
2015
0.57
0.52
0.67
0.91
1.27
1
ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT CONTENTS
2015 Annual Report
2015 Year in Review ................................................................................................................. ii
Company Overview ..................................................................................................................3
Chairman’s Report ....................................................................................................................4
Chief Executive’s Report ...........................................................................................................5
2016 Objectives ........................................................................................................................6
Operating and Financial Review ................................................................................................7
Financial performance ......................................................................................................... 7
Operations ........................................................................................................................ 10
Business Strategy .............................................................................................................. 12
Future Supply..........................................................................................................................16
Sales and Marketing ...............................................................................................................20
Health and Safety ...................................................................................................................21
Radiation monitoring ..............................................................................................................22
Regulatory framework ............................................................................................................23
Sustainability Report ........................................................................................25
Overview ................................................................................................................................27
Environment ...........................................................................................................................28
Land .......................................................................................................................................32
Employment ...........................................................................................................................33
Community .............................................................................................................................35
Financial Report ....................................................................................................37
2
ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT COMPANY OVERVIEW
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 for
more than three decades.
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.
Located eight kilometres east of Jabiru and 260 kilometres
east of Darwin, 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, the Jabiluka deposit will not be
developed by ERA without the approval of the
Mirarr Traditional Owners.
Ranger has produced in excess of 120,000 tonnes of
uranium oxide (U3O8) in the 33 years since it began
production.
ERA is currently processing stockpiled ore following the
completion of open cut mining in 2012.
ERA has a sales and marketing agreement with Rio Tinto
Uranium pursuant to which ERA’s product is sold to
international power utilities under strict international and
Australian Government safeguards which ensure that
Australian uranium is only used for peaceful purposes.
ERA is committed to strong environmental management
practices and is continuing progressive rehabilitation of
the Ranger Project Area as well as rehabilitation of the
Jabiluka site.
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.
The Company’s shares are publicly held and traded on
the Australian Securities Exchange, with Rio Tinto, a
diversified resources group, currently holding 68.4 per cent
of ERA shares.
ERA’s uranium mining activities are regulated through
Commonwealth and Northern Territory legislation.
In addition, 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.
Acknowledgement
ERA acknowledges the Mirarr people,
Traditional Owners of the land on which
ERA operates.
ERA is committed to strong environmental
management practices and is continuing
progressive rehabilitation of the Ranger
Project Area as well as rehabilitation of the
Jabiluka site.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT
In 2015, nuclear energy as a low carbon
emission source of energy has been firmly put
on the agenda in Australia and globally.
PETER MANSELL
CHAIRMAN
CHAIRMAN’S
REPORT
I was very pleased to be appointed as the Chairman of the
Board of Energy Resources of Australia in late 2015. On
behalf of the Board, I would like to acknowledge the five
Board members who resigned during the year and thank all
of them for their different, but valuable contributions.
The newly constituted Board must now, as a matter of
priority, review the business and set the direction and
strategy for ERA for the medium to long-term and optimise
short-term cash flow. Notwithstanding the decisions
announced during the year by the major shareholder Rio
Tinto and the Mirarr Traditional Owners not supporting the
expansion of the Ranger Mine to an underground operation
at this time, the ERA Board has a responsibility to all
stakeholders to find a path forward for ERA that maximises
shareholder value.
In 2015, nuclear energy as a low carbon emission source
of energy was firmly put on the agenda in Australia and
globally.
South Australia’s Nuclear Fuel Cycle Royal Commission
has been a platform to frame the public debate on the
future of nuclear energy and uranium mining. A great
deal of information, from many differing viewpoints, was
presented. The final report and recommendations of the
Royal Commission are due to be published by May 2016.
In late 2015, the Prime Minister Malcolm Turnbull,
Environment Minister Greg Hunt and Foreign Minister
Julie Bishop attended the United Nations Conference on
Climate Change in Paris and reinforced their commitment
to Australia playing its part in combating climate change.
The Prime Minister has been vocal in his support for
Australia’s uranium export industry to continue to be part
of the global energy supply chain mix.
Nuclear energy, as a key component of the global clean
energy strategy, addresses the needs of energy security,
affordability and low carbon emissions. Large economies,
such as China, India and Argentina are increasingly turning
to nuclear as part of their future energy supply to provide
secure, low carbon electricity on a large scale.
As one of only three uranium mines currently producing in
Australia and one with large resources, ERA is in an enviable
position to capitalise on the changing sentiment towards
nuclear energy and the gains in nuclear technology which
have been made as part of the global effort to address
climate change.
ERA has a long history of safe operation of its mine and
care for the environment. Over the decades it has made
significant social and financial contributions, not only to
the West Arnhem community, but also the wider Northern
Territory and shareholders.
Throughout its operating history, ERA has held and
demonstrated a strong commitment to progressive
rehabilitation of its sites, details of which are in this Annual
Report. Since 2012, ERA has spent more than $405 million
on rehabilitation and water management projects, of that
$27 million was spent during 2015. The Board will ensure
that the Company fulfils its rehabilitation responsibilities
consistent with best practice technology and to the
satisfaction of all relevant stakeholders.
The Board’s aim is to continue to work with stakeholders
such as the Northern Territory and Commonwealth
Governments, the Mirarr Traditional Owners, their
representatives the Gundjeihmi Aboriginal Corporation,
shareholders and other key recognised stakeholders to
reach a suitable long-term positive outcome for all.
Peter Mansell
Chairman
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT
ERA ended the year with an all injury
frequency rate of 0.67. This has been a solid
improvement and shows the efforts and
focus of the team.
ANDREA SUTTON
CHIEF EXECUTIVE
CHIEF EXECUTIVE’S
REPORT
2015 has been a challenging year for ERA in a number of
respects. Before I turn to our operational performance let
me begin, as always, with safety.
The health and safety of the ERA team, service providers
and community and the protection of the local environment
continue to be underlying core values within the business.
ERA ended the year with an all injury frequency rate of
0.67 per 200,000 hours worked. This has been a solid
improvement and shows the efforts and focus of the team.
Two key areas which we have focused our safety campaigns
on this year have been process safety and communication
and engagement to build a stronger health and safety
culture within the business.
The Process Safety Improvement Action Plan has resulted
in improved identification and monitoring of process safety
hazards and risks at Ranger and focuses on health and
safety leadership and critical risk management. There has
also been a renewed focus on asset integrity with on-
going testing of key plant infrastructure and preventative
maintenance. Four leach tanks out of the original seven are
back in use with work continuing on returning an additional
leach tank to service.
Although critical assets were still being returned to service
during the year, the processing of low-grade stockpiles
yielded excellent results for the Company. The processing
team delivered an impressive 2,005 tonnes of uranium oxide
which was at the higher end of the 2015 guidance.
Production guidance for 2016 is between 1,900 and
2,300 tonnes.
During the year, the Board made the difficult decision that the
Ranger 3 Deeps project should not proceed to Final Feasibility
Study in the current operating environment. Following
that announcement by the Company, the Ranger 3 Deeps
Exploration Decline was placed on care and maintenance.
As announced by ERA to the ASX in October, the
Gundjeihmi Aboriginal Corporation has formally advised
that the Mirarr Traditional Owners do not support an
extension to the Ranger Authority. ERA respects the
decision of the Traditional Owners and is undertaking a
review of its business in light of this decision. The outcome
of the review will be announced in the first half of 2016.
ERA holds assets in the Ranger stockpiles, the Ranger 3
Deeps resource and the Jabiluka Mineral Lease.
ERA has reached a number of milestones in progressive
rehabilitation in 2015. The final phase of the revegetation
project at Jabiluka was completed, bringing the total
planting of seedlings on the site to some 16,000 over a
decade. This work was completed in close consultation with
the Mirarr Traditional Owners.
This year, the rehabilitation of Pit 1 also made good
progress with its conversion from a process water to a pond
water catchment. When compared to process water, pond
water needs less treatment before it is discharged to the
external environment.
Capping on Pit 1 progressed with the final layers of
laterite being placed over the preload before waste rock is
deposited so a revegetation programme can commence.
ERA is taking an innovative approach to the rehabilitation
of Pit 3 which was depleted in 2012. A system of injection
bores have been installed from the surface of the pit to
receive brine from the brine concentrator. Pit 3 began to
receive tailings directly from the mill through a pipeline
from the plant.
An important aspect of the rehabilitation work for which
ERA is responsible at Ranger involves water and tailings
management. A key milestone was the launch and
successful commissioning of the custom built dredge on
the Tailings Storage Facility. The 27 metre long vessel is
designed to dredge tailings from the Tailings Storage Facility
and deposit them into Pit 3.
Engagement on closure criteria for the mine and associated
infrastructure continues with key stakeholders, including the
Northern Territory and Commonwealth governments and
Traditional Owners.
As noted above, the year has been a challenging one for ERA.
We enter 2016 with a newly reconstituted Board looking to
the future.
Lastly, I would like to take this opportunity to thank the
employees for their hard work in 2015, and their continued
commitment to ERA.
Andrea Sutton
Chief Executive
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT
2015 ANNUAL REPORT
SUSTAINABILITY DEVELOPMENT REPORT
FINANCIAL REPORT
2016 OBJECTIVES
The Company’s objective is to continue to produce uranium oxide safely, while protecting the
environment and contributing to the global energy market and local economy and enhancing
shareholder value.
Area
Objectives
Health,
Safety and
Environment
Committed to the goal of zero harm
• Complete all actions under the Process Safety Improvement Action Plan
• Focus on strong safety leadership development
• Progressively implement the Critical Risk Management programme at Ranger
• Demonstrate a sound understanding of critical risk profiles within the organisation and monitor
using the Critical Control Management Plan
• Continue to protect the World Heritage listed Kakadu National Park through effective risk
assessment and environmental management plans
Financial
Maximise cash generation and shareholder value
• Continue to identify savings and cash generation opportunities
• Maximise operational efficiencies and cost savings
• Continue to maintain optionality of Ranger 3 Deeps and Jabiluka
• Finalise and implement the outcomes of the strategic business review
Operations
Economically produce uranium from stockpiled ore while integrating rehabilitation activities
• Maximise production of uranium oxide
• Optimise availability and throughput of Brine Concentrator
• Actively monitor the integrity of the processing plant and operating assets
Rehabilitation
and Closure
Continue progressive rehabilitation of the Ranger Project Area
• Dredging of the Tailings Storage Facility
• Determine closure criteria through the Closure Criteria Working Group
• Continue revegetation work on disturbed land
Communities
and
Government
Develop a shared understanding and strengthen relationships with key stakeholders
• Actively engage with the representatives of the Mirarr Traditional Owners, the Gundjeihmi
Aboriginal Corporation, to achieve mutually beneficial outcomes for the Company, the Traditional
Owners and shareholders
• Engage with governments and their agencies to ensure timely outcomes on the Company’s
objectives
• Ongoing implementation of the objectives of the Ranger Mining Agreement including business
development, training and land management
• Seek to determine the long term future of Jabiru with governments, Traditional Owners and
stakeholders
People
Foster a safe, capable, committed and diverse workforce
• Continue to grow diversity of the ERA workforce
• Continue to grow regional training and development programme
• Provide leadership and development opportunities for the workforce
6
ENERGY RESOURCES OF AUSTRALIA LTD
OPERATING AND FINANCIAL REVIEW
Financial performance
This year saw many financial achievements for ERA, with a
number of key milestones reached.
ERA continued to generate cash flow from its operations
and, for the first time since 2009, with reduced non-
operating expenditure, the Company’s overall cash
resources increased (excluding the 2011 rights issue).
This improvement was the result of a determined focus
on maximising cash flow from the production of uranium
oxide from stockpiles, reduced exploration expenditure,
completion of key rehabilitation milestones and favourable
foreign exchange.
ERA increased its cash balance by $72 million during 2015,
ending the year with $433 million in total cash resources
and no debt. Total cash resources consist of $365 million
in cash at bank and $68 million of cash held on deposit
by the Commonwealth Government as part of the Ranger
Rehabilitation Trust Fund.
ERA’s 2015 earnings before interest, tax, depreciation and
amortisation was $24 million, compared with a loss of
$164 million in 2014.
ERA recorded a net loss after tax of $275 million compared
to a net loss after tax of $188 million in 2014. This was
negatively impacted by ERA recording a non-cash charge
for the write down of deferred tax assets of $197 million at
half year.
The non-cash charge for the write down was undertaken
as a result of the Board decision in June not to progress
the Ranger 3 Deeps project to Final Feasibility Study in the
current operating environment. As a result of this decision,
ERA considered that its carried forward tax losses no
longer satisfied the recognition criteria under the Australian
Accounting Standards.
REVENUE
Revenue from the sale of uranium oxide was lower than
2014 at $332.7 million. Despite achieving an average
realised price well in excess of the average spot price in
2015 and favourable movements in the USD/AUD exchange
rate, reduced sales volume impacted overall revenue.
Sales volume for 2015 was 2,183 tonnes of uranium oxide
compared with 3,148 tonnes for 2014.
ERA’s average realised sales price has tracked the long-term
price index for uranium oxide in 2015. The average realised
sales price which ERA received for uranium oxide in 2015
was US$51.99 per pound compared to US$49.50 in 2014.
This compares favourably against the average spot price for
2015 of US$36.86 per pound.
Uranium oxide sales are denominated in US dollars. Therefore
the weakening of the Australian dollar was beneficial to ERA.
The average USD/AUD exchange rate during the year was
US$0.75, compared with US$0.91 for 2014.
MARKET URANIUM PRICES EXPRESSED IN AUSTRALIAN DOLLAR TERMS ARE AT THEIR HIGHEST SINCE 2011
U3O8 average spot price expressed in A$ per pound
ERA’s 2015 U3O8 average realised
price of US$51.99 per pound at average FX
rate of US$0.75 = A$69 per pound
69
57
54
50
46
41
49
35
70
60
50
40
30
20
10
0
2009
2010
2011
2012
2013
2014
2015
U3O8 average spot price (US$ per pound)
46
47
56
48
38
32
37
Average FX rate (AUD/USD)
0.80
0.93
1.04
1.05
0.94
0.91
0.75
U3O8 average spot price (A$ per pound)
57
50
54
46
41
35
49
2009
2010
2011
2012
2013
2014
2015
* Rounding differences may occur
7
ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT
OPERATING AND FINANCIAL REVIEW
OPERATING COSTS
Cash costs for 2015 were significantly lower than 2014,
due to the elimination of the requirement to purchase
uranium oxide (2014: $67 million), an ongoing focus on
cash preservation, a favourable exchange rate, reduced
exploration and evaluation expenditure and favourable
movements in consumable input prices.
The Company’s cash generation programme continued to
identify further opportunities for savings and efficiency
improvements across the business in 2015. Work on
pursuing additional opportunities will continue in 2016.
Favourable input costs were achieved through ongoing
re-negotiation of procurement contracts and continued
internal challenge on process improvement, ensuring the
operation maximises value from expenditure.
CAPITAL EXPENDITURE
Capital expenditure for 2015 of $12 million was consistent
with the previous year (2014: $12 million). The 2015 year
saw capital expenditure directed at the completion of the
remaining water management infrastructure and targeted
sustaining capital.
REHABILITATION
Progressive rehabilitation continued with expenditure of
$27 million incurred. Expenditure was primarily associated
with the construction and commissioning of the dredge and
associated infrastructure necessary to relocate the tailings
stored in the Tailings Storage Facility for final deposition in
Pit 3. Key infrastructure to enable brine injection into the
bottom of Pit 3 was also engineered during the year.
Senior Supervisor Water Transfer, Sandip Ramani
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT OPERATING AND FINANCIAL REVIEW
Maintenance Trade Apprentice Dane Warhurst and
Superintendent Darren Fairman in the Ranger Power Station
CASH GENERATION CASE STUDIES
Camp removal saves cash
A review was performed in 2015 to optimise and rationalise
the Company’s camp accommodation. As an outcome to
the review, a project was implemented to remove more than
two-thirds (242 rooms) of the accommodation at the Ranger
Mine Village personnel camp, as well as the mess, all of
which were incurring significant rental and operating costs,
and were in need of maintenance. This decision required
the establishment of a shuttle service to allow the remaining
100 room tenants to access ERA’s mess in Jabiru, with
appropriate scheduling to ensure the kitchen would operate
effectively.
The costs to demobilise the camp were also minimised by
selecting a contractor with an innovative approach that
enabled the sections of the camp to be removed over a
two month period.
All work was completed safely, on time and on budget and
resulted in considerable cost savings in rental, operating and
maintenance costs as well as cost avoidance for removal.
Power station generates savings
The main diesel power station at Ranger has five 5 megawatt
diesel Pielstick engines which supply electricity to the Ranger
mine site and the township of Jabiru. At peak times power
demand of up to 13.5 megawatts is experienced.
A team of ERA technicians developed and implemented a
strategy to overcome compatibility issues between a smaller,
highly efficient 2 megawatt DA6 Cummins generator at
Ranger and the main power station. The team worked
through technical challenges to allow effective integration
of the DA6 Cummins and the 5 megawatt Pielsticks which
run at different speeds.
The team base-loaded the smaller, more fuel efficient and
lower maintenance DA6 generator into the main power
station and integrated it with the larger Pielstick engines.
With effective integration, the lower cost DA6 is now the
highest priority generator to run.
The result is that the DA6 generator’s run hours increase,
while the Pielsticks’ run hours reduce which provides a
lower cost outcome for power generation at Ranger.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT OPERATING AND FINANCIAL REVIEW
Operations
This year was a successful one for operations at Ranger.
The team was focused on the continued safe return
of critical assets to service, the continued roll out of
the Process Safety Action Improvement Plan and the
optimisation of production of uranium oxide.
Total production of 2,005 tonnes of uranium oxide for
the year was at the higher end of the range of published
guidance of between 1,600 tonnes and 2,200 tonnes.
PROCESS SAFETY IMPROVEMENT ACTION PLAN
Following the failure of Leach Tank 1 in December 2013,
a 24 month roadmap was set out to improve process
safety at Ranger. On behalf of the Australian and Northern
Territory Governments, Noetic Risk Solutions Pty Ltd
(Noetic) and other independent organisations undertook
an investigation and made recommendations to improve
the standard of safety in the processing plant area of
the mine. Noetic is participating in ongoing regulatory
oversight of the Process Safety Improvement Action Plan’s
implementation and completed a further four visits to
Ranger to track progress during the year.
Substantial progress was made during the year in
implementing the Process Safety Improvement Action Plan.
Areas of focus have been the identification of process
safety hazards and the identification and understanding of
the effectiveness of the critical controls in managing the
hazards.
ERA has two main processes to check the effectiveness of
critical controls. First are the self-assessments carried out
by those who are accountable for implementing controls,
known as Process Safety Hazard Control Effectiveness
monitoring. The second are Critical Control Monitoring
Plans which are undertaken by senior leaders.
Key initiatives were introduced in 2015 as part of the
Process Safety Improvement Action Plan. These included:
• training across the workforce to initiate cultural change;
• process safety hazards defined, critical controls detailed
and monitoring plans established;
• confirming the effectiveness of critical controls; and
• appointment of a dedicated Process Safety Specialist.
As part of the robust system of managing critical assets,
other major pieces of infrastructure underwent regular
scanning programmes to ensure their integrity.
PRODUCTION
During the year, ERA produced 2,005 tonnes of uranium
oxide. Ore was fed from the stockpiles at Ranger and
production was uninterrupted except for a scheduled
fortnight of shutdown in the second quarter for
maintenance.
In December, the processing team achieved the highest run
rate of ore through the plant in more than a decade.
October saw the highest monthly containerised production
at Ranger for two years.
Average head grade of the ore in 2015 was 0.10 per cent
uranium oxide.
Work on the full recovery of all critical assets in the
processing plant continued in 2015.
The Board approved the return to service of the Clarifier
Tank in October.
The Clarifier Tank enables improved recovery and had been
offline since October 2013. It has undergone a complete
overhaul including a full rubber reline. Quality assurance for
the overhaul, as with all critical assets, has been provided by
external certified tank specialists.
Processing of ore continued using four of the original
seven leach tanks at Ranger. Leach Tanks 4, 5, 6 and 7
operated throughout the year (except during periods of
maintenance), while work was commenced to return Leach
Tank 3 to service (expected in the first quarter of 2016).
The laterite plant was successfully recommissioned after
an extended period with grade, extraction and throughput
all exceeding plan. Leach Tank 5 was used to process
laterite ore.
PROGRESSIVE REHABILITATION
Progressive rehabilitation describes the way in which we
manage our responsibilities to restore the environment
throughout the life of our ongoing operations. This means
that rehabilitation of the Ranger site is being completed
alongside processing operations.
ERA’s pathway to achieving progressive rehabilitation is set
out in the Integrated Tailings, Water and Closure Strategy,
which provides the strategy for ongoing rehabilitation
works, including operational and infrastructure projects
necessary for successful closure. The cost and timeframe for
execution of the progressive rehabilitation programme were
largely unaffected by the announcement regarding Ranger
3 Deeps in June 2015.
ERA has undertaken extensive research (for example into trial
landforms and revegetation techniques) and consultation
with stakeholders in formulating its closure strategy.
A key element of the Integrated Tailings, Water and Closure
Strategy is the Tailings and Brine Management Project,
which entered the construction phase in December 2013.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT OPERATING AND FINANCIAL REVIEW
The Tailings and Brine Management Project provides an
integrated operational pathway for:
• rehabilitating the exhausted Pits 1 and 3;
• managing the transfer of tailings from the Tailings
Storage Facility to Pit 3;
• managing the transfer of water between the Tailings
Storage Facility and Pit 3;
• managing the brine waste stream from the Brine
Concentrator to Pit 3;
• supporting conversion of Pit 1 from a process water
catchment to a pond water catchment; and
• redirecting tailings from the processing mill away from
the Tailings Storage Facility and into Pit 3.
Making innovative use of proven technologies, the Tailings
and Brine Management Project achieved significant progress
by the end of 2015 with the successful commissioning of
operational elements.
These included the commissioning of the new stainless steel
dredge, which will reclaim tailings from the Tailings Storage
Facility, associated pumping infrastructure to transfer
dredged tailings from the Tailings Storage Facility to Pit 3,
and water recovery and pumping infrastructure to transfer
excess process water from Pit 3 back to the Tailings Storage
Facility, allowing controlled consolidation of tailings within
Pit 3.
In addition, the brine transfer pumping and injection
infrastructure was constructed, which enables the
concentrated brine waste stream from the Brine
Concentrator to be injected into the base of Pit 3.
The installation of this infrastructure means that after three
years of studies and options assessment, the transfer of
tailings to Pit 3, the continued reduction and treatment of
process water and tailings in the Tailings Storage Facility,
and the safe disposal of all future processing waste is now
a matter of routine operation. This is a critical milestone
for ERA.
From 2016, all production tailings will be directed to Pit 3,
brine waste will be injected securely into the base of Pit
3 for permanent containment, the process water in the
Tailings Storage Facility will progressively reduce as it is
treated by the Brine Concentrator, and the tailings mass in
the Tailings Storage Facility will be progressively transferred
to Pit 3 by dredge operations. These activities are integral to
the successful execution of the closure strategy which was
approved by the Board in January 2013.
Ranger Mine’s Tailings Storage Facility
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT OPERATING AND FINANCIAL REVIEW
REHABILITATION OF PIT 3
The initial backfill of Pit 3 was successfully completed
in 2013, with a total of 33.7 million tonnes of waste
rock placed into the base of the pit. Five brine injection
wells were installed within the engineered backfill which
will enable injection of the waste brine from the Brine
Concentrator into the pit.
As tailings from the Tailings Storage Facility and milling
operations are transferred into the pit, a water recovery
drain and extraction pump system will transfer excess water
back to the Tailings Storage Facility.
In early 2015, tailings slurry from the mill began to be
transferred directly to Pit 3. The tailings from the mill form
beaches, with excess water pooling at designated low
points at the base of the Pit 3 access ramp.
This allows the safe and progressive movement of
extraction pumps and associated infrastructure back up the
access ramp as Pit 3 fills with tailings.
On the eventual completion of processing activities, and
when the Tailings Storage Facility tailings are completely
transferred, the tailings mass in Pit 3 will be capped with a
waste rock layer prior to final land formation.
Based on the existing Ranger Authority, Pit 3 rehabilitation,
including land formation and revegetation with locally
sourced native plant species, is to be completed by 2026.
REHABILITATION OF PIT 1
In parallel with rehabilitation works in Pit 3, the conversion
of Pit 1 from a process water catchment to a pond water
catchment was also progressed in 2015. This will enable
ERA to manage the process water inventory on site better.
In recent years, Pit 1 has been used to store mill tailings as
required by the Ranger Authority. In 2012, ERA commenced
Pit 1 closure works with the installation of over 7,700
dewatering wicks, the addition of a geotextile fabric layer
and of a pre-load rock layer to compress the tailings mass.
The rock pre-load activated the drainage wicks, forcing the
water beneath Pit 1 to travel to the surface where it was
collected at a low point and pumped to the Tailings Storage
Facility.
During 2015 this pre-load rock layer was capped with an
impervious layer of laterite covering over 80 per cent of the
tailings mass surface.
Completion of the clay liner will allow the final bulk rock
fill to be placed in the future ahead of land forming and
revegetation.
BRINE CONCENTRATOR
The Brine Concentrator is used to treat process water
which is stored in the Tailings Storage Facility and Pit 3.
It heats process water to high temperatures, the water then
evaporates and is cooled, condensed and discharged to the
environment as high quality, clean distilled water.
The commissioning of the Brine Concentrator continued
during 2015.
Throughout commissioning, the facility has demonstrated
that it can treat water at the desired rate. ERA is working
with the equipment manufacturer HPD, a subsidiary of
Veolia, to increase plant availability and address various
technical issues.
The Brine Concentrator underwent a full shutdown
during the year to undergo statutory inspections, planned
maintenance and cleaning.
During the year, the Brine Concentrator produced 881.5
megalitres of distillate.
POWER STATION
Significant productivity improvements were made in the
power station which continued to service Ranger Mine and
the township of Jabiru.
Technical personnel at ERA achieved this by base loading
a highly efficient 2 megawatt generator into the diesel
power station. This integration of the high speed generator
with the low speed diesel alternator resulted in an excellent
outcome from a safety, cost and productivity perspective.
All of the five 5 megawatt diesel units in the power
station underwent scheduled overhauls and maintenance
throughout the year. The efficiency of the power station’s
operation now means that two of the five units can be
offline at any time.
Business Strategy
ERA’s vision is to be a world-class uranium supplier that
contributes to environmental sustainability and is trusted by
Traditional Owners, the community and its people.
ERA holds two undeveloped uranium resources of
international significance at Ranger 3 Deeps and Jabiluka.
In addition, ERA has stockpiled Ore Reserves at Ranger
that, in the absence of development of other resources, are
expected to sustain operations until late 2020 under current
economic assumptions.
ERA’s key business objectives are to:
• continue to operate effectively and safely;
• develop a long term resource base;
• 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.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT OPERATING AND FINANCIAL REVIEW
CURRENT OPERATIONS
Current operations rely on the processing of uranium ore
stockpiles following cessation of open pit mining of Pit 3.
In January 2016, ERA announced that it had reclassified
6,003 tonnes of uranium oxide contained within surface
stockpiles from Mineral Resources to Ore Reserves.
The Company’s estimate of Ore Reserves for the Ranger
stockpiles at 31 December 2015 was 10,383 tonnes of
contained uranium oxide (see Future Supply, page 16).
The Company has generated positive cash flow from the
processing of stockpiled ore in each year since the cessation
of open pit mining operations in 2012. The Company has
initiatives in place to reduce costs and improve productivity
to offset the adverse impact of declining ore grades over
time. Subject to market conditions, and in the absence of
further mine development, the mine plan which supports
the Ore Reserves Statement assumes that, stockpiled ore
can continue to be economically processed at Ranger until
late 2020.
RANGER 3 DEEPS
The Ranger 3 Deeps project involved the construction
of a 2,710 metre Exploration Decline and an associated
underground exploration drilling programme designed to
pave the way to a potential underground mine.
In June, ERA announced that the Ranger 3 Deeps project
would not proceed to Final Feasibility Study in the current
operating environment. The decision was driven primarily
by two key factors. First, the Board’s view that the uranium
market had not improved as ERA previously expected and
there was uncertainty regarding the uranium market’s
direction in the immediate future. Second, having finalised
and considered the Prefeasibility Study, the economics of
the project required operations beyond the current Ranger
Authority.
Also in June, ERA’s major shareholder Rio Tinto announced
that it supported ERA’s decision to not progress the project,
and did not support further study or future development of
Ranger 3 Deeps.
In the second half of 2015, the Gundjeihmi
Aboriginal Corporation formally advised that the
Mirarr Traditional Owners do not support an extension
to the Ranger Authority.
ERA’s vision is to be a world-class uranium
supplier that contributes to environmental
sustainability and is trusted by Traditional
Owners, the community and its people.
Sunrise at Ranger Mine
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT OPERATING AND FINANCIAL REVIEW
The Ranger Authority is granted under the Atomic Energy
Act 1953 (Cth). The Atomic Energy Act permits one renewal
only of the Authority. The existing Ranger Authority,
which was renewed in 1999, allows mining and processing
operations until 8 January 2021 and access for rehabilitation
activities until 8 January 2026. As the renewal has been
exercised, the Atomic Energy Act would need to be
amended to enable a further renewal by ERA.
As part of the Prefeasibility Study, ERA announced to the
market in July it had updated the Ranger 3 Deeps Mineral
Resource to 19.58 million tonnes at an overall grade of
0.224% U3O8, representing 43,858 tonnes of contained
uranium oxide. The Ranger 3 Deeps Exploration Decline
remains under care and maintenance.
JABILUKA
In addition to Ranger 3 Deeps, the Jabiluka Mineral Lease
remains one of ERA’s key assets. Jabiluka is a large, high-
quality uranium ore body of international significance.
ERA has entered into a Long Term Care and Maintenance
Agreement with the Mirarr Traditional Owners in relation to
the Jabiluka resource.
Future mining developments at Jabiluka will not occur
without the consent of the Mirarr Traditional Owners.
In January 2016, ERA announced that it had written
back all Jabiluka Ore Reserves to Mineral Resources.
Previously identified Jabiluka Ore Reserves of 67,700
tonnes of uranium oxide have now been re-classified
and incorporated into the existing Mineral Resources.
Consequently Jabiluka Mineral Resources have been
updated to 137,107 tonnes of uranium oxide at a cut-off
grade of 0.2% U3O8 (see Future Supply, page 17).
STRATEGIC REVIEW
Following advice received from Gundjeihmi Aboriginal
Corporation in the second half of 2015 that the Mirarr
Traditional Owners do not support an extension to
the Ranger Authority, ERA announced an intention to
undertake a review of its business.
Following this announcement, the Company has initiated
a strategic review with the aim of determining an
optimal pathway for the business focused on maximising
shareholder value. The outcomes of the strategic review are
expected to be announced in the first half of 2016.
Superintendent Dean Bonner with the dredge “Jabiru”
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT OPERATING AND FINANCIAL REVIEW
BUSINESS RISKS
The business risks that could adversely affect the
achievement of the financial performance or financial
outcomes of the company are described below.
Undeveloped resources
The Company has significant undeveloped uranium
resources at Ranger 3 Deeps and Jabiluka.
In 2015 the ERA Board determined that development of the
Ranger 3 Deeps project would not proceed to Final Feasibility
study in the current operating environment. This was, in
part, due to the Board’s assessment that the economics of
the project required operations beyond the current Ranger
Authority, which permits processing operations until January
2021. An extension of the Ranger Authority would enable
the Company to revisit the project’s economics over time.
Support from the Mirarr Traditional Owners is a key factor in
the Company’s ability to secure an extension to the Ranger
Authority. In the second half of 2015, representatives of the
Mirarr Traditional Owners withdrew from negotiations with
the Company on the possibility of an Authority extension.
In relation to Jabiluka, ERA has agreed that future mining
development will not occur without the consent of the
Mirarr Traditional Owners. It is uncertain that this consent
will be forthcoming and, by extension, that the Jabiluka
deposit will be developed. Should this consent not
eventuate in the future, the Jabiluka Undeveloped Property
would face full impairment.
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.
Should current forecasts for foreign exchange rate, prices,
costs, resource and mining techniques not be realised, and
in the absence of any other successful developments, the
Company may require an additional source of funding to fully
fund the rehabilitation of the Ranger Project Area. Any inability
to obtain additional capital or to monetise assets would have
a material impact on ERA’s business and financial performance.
Water management
Management of water on the Ranger Project Area is
critical to the ongoing operation of ERA’s processing 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 the
Company will depend on many factors. Should current
forecasts for foreign exchange rate, prices, costs, resource
and mining techniques not be realised, and in the absence
of any other successful developments, the Company may
require an additional source of funding to fully fund the
rehabilitation of the Ranger Project Area.
Any inability to obtain sufficient capital would have a
material impact on the Company’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 (Trust
Fund) is then determined. The Trust Fund includes both
cash and financial guarantees.
The Company’s ability to continue to access financial
guarantees can be influenced by many factors including
future cash balance, cash flows and shareholder support.
Should one or more of the financial guarantees be
withdrawn at any time and the Company is unable to
access replacement guarantees, substantial additional cash
would be required to be deposited into the Trust Fund. In
a scenario where this occurs the Company’s cash resources
available to fund operations would reduce. The Company
has plans in place to address these risks.
Regulators and stakeholders
Regulatory approvals would required to commence any
production from the proposed Ranger 3 Deeps mine or on
any other parts of the Ranger Project Area and the Jabiluka
Mineral Lease. If regulatory approvals are not obtained or
are obtained on unsatisfactory conditions, ERA will not be
able to proceed with those developments.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT FUTURE SUPPLY
EVALUATION AND EXPLORATION
Total evaluation expenditure for 2015 was $9 million, which
principally related to close-out activities of the $57 million
Ranger 3 Deeps Prefeasibility Study.
ERA suspended the final stage of the surface exploration
programme on the Ranger Project Area in 2015 to preserve
cash following the deferral of the Ranger 3 Deeps project.
The updated estimate has increased the Mineral Resource
to 19.58 million tonnes with a change in the overall grade
to 0.224% U3O8, equating to 43,858 tonnes of contained
uranium oxide (previously 12.58 million tonnes with a grade
of 0.277% U3O8 to 34,867 tonnes of uranium oxide).
The Ranger 3 Deeps geological model has been updated
with all underground drilling data acquired to date.
There was no exploration expenditure in 2015.
The Ranger 3 Deeps Exploration Decline remains under care
and maintenance.
RANGER 3 DEEPS RESERVES AND RESOURCES
In July, ERA updated the Ranger 3 Deeps Mineral Resource
estimate as part of the Ranger 3 Deeps Prefeasibility Study.
Economic assumptions relating to the cut-off grade of
the Mineral Resource have been updated in line with the
Prefeasibility Study assumptions. This has resulted in an
improved Mineral Resource cut-off grade of 0.11% U3O8
(previously 0.15% U3O8).
RANGER RECONCILIATION
Ore Reserves as at 1 January 2015
Ore Reserves depleted by processing
Other adjustments. See Explanatory Notes
Ore Reserves as at 31 December 2015
Explanatory Notes
Effect of lowered cut-off grade from 0.08% to 0.06%
Favourable Stockpile Model Performance
*Rounding differences may occur
RANGER RESERVES AND RESOURCES
During 2015 ERA processed 2,518 tonnes of uranium oxide.
Offsetting the reduction in Probable Ore Reserves
associated with production, in December ERA reduced the
cut-off grade for stockpiled ore from 0.08% U3O8 to
0.06% U3O8. The previous 0.08% U3O8 cut-off was
relevant to in situ hard rock open pit mining. The revised
0.06% U3O8 cut-off reflects lower mining costs for stockpile
mining which does not require drilling and blasting.
CONTAINED U3O8
TONNES*
6,206
(2,518)
6,695
10,383
6,003
692
Stockpiled ore being hauled to the discriminator
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT FUTURE SUPPLY
Taking into account the 2,518 tonnes of uranium oxide
processed in 2015, this had the net effect of increasing
the Probable Ore Reserves of uranium oxide for Ranger to
10,383 tonnes at 31 December 2015 (31 December 2014:
6,206 tonnes).
During the reporting period, all processed ore was sourced
from either run of mine stocks or low grade stockpiles.
For the same period, Ranger Mineral Resources increased
by 3,438 tonnes of uranium oxide, from 52,711 tonnes to
56,149 tonnes.
The increase was mainly due to the lowering of the Ranger
3 Deeps cut-off grade in line with the Prefeasibility Study
assumptions.
JABILUKA RESERVES AND RESOURCES
The Jabiluka Mineral Lease 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.
Since entering into the Long Term Care and Maintenance
Agreement, the reporting of Jabiluka Ore Reserves and
Mineral Resources has been grandfathered under the
reporting requirements of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves, 2004 Edition (JORC 2004 Code).
In 2015 ERA determined that the 2015 Jabiluka Ore
Reserves and Mineral Resources statement should be
updated in line with the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves,
2012 Edition (JORC Code 2012). The Company was of the
view that it was appropriate to bring Jabiluka Ore Reserves
and Mineral Resources into line with the JORC Code 2012,
to reflect updated assumptions in relation to the economic,
technical, environment, approvals and communities aspects
of the resource. The JORC Code 2012 also requires the
completion of prefeasibility level studies to report Ore
Reserves, which have not been undertaken.
In accordance with the JORC Code 2012, ERA has written
back all Jabiluka Ore Reserves to Mineral Resources.
Previously identified Jabiluka Ore Reserves of 67,700
tonnes of uranium oxide have now been re-classified and
incorporated into the existing Mineral Resources.
Consequently Jabiluka Mineral Resources have been
updated to 137,107 tonnes of uranium oxide at a cut-off
grade of 0.2% U3O8.
GOVERNANCE
ERA’s Competent Person is a full time employee of ERA.
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.
As part of its internal controls, ERA applies the standards
of the Rio Tinto Ore Reserves Steering Committee (ORSC)
in the generation and publication of Mineral Resources and
Ore Reserves.
The ORSC comprises senior representatives from technical,
financial and business fields within the Rio Tinto Group and
meets on a quarterly basis.
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 programme
is conducted by independent external consulting personnel
in a programme 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 Person.
Other improvements introduced by the ORSC include
a web-based reporting and sign-off database, annual
internal Competent Person reports and Competent Person
development and training.
Approval of Ore Reserves and Mineral Resources for ERA is
the responsibility of the Chief Executive and estimates are
carried out by a Competent Person as defined by the JORC
Code 2012.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT FUTURE SUPPLY
ERA 2015 Ore Reserves & Mineral Resources
RANGER ORE RESERVES
Current Stockpiles
In situ
Proved
Probable
CUT-OFF GRADE – STOCKPILE ORE
0.06% U3O8
CUT-OFF GRADE – STOCKPILE ORE
0.08% U3O8
As at 31 December 2015
As at 31 December 2014
Ore (MT) % U3O8
t U3O8
Ore (MT) % U3O8
t U3O8
12.08
0.086
10,383
5.05
0.123
6,206
–
–
–
–
–
–
–
–
–
–
–
–
Sub-total Proved and Probable Reserves
12.08
0.086
10,383
5.05
0.123
6,206
Total Ranger No. 3
Stockpiles, Proved and
Probable Reserves
12.08
0.086
10,383
5.05
0.123
6,206
CUT-OFF GRADE – STOCKPILE
RESOURCE 0.02% U3O8
UNDERGROUND INSITU RESOURCE
0.11% U3O8
CUT-OFF GRADE – STOCKPILE
RESOURCE 0.02% U3O8
UNDERGROUND INSITU RESOURCE
0.15% U3O8
RANGER MINERAL RESOURCES
IN ADDITION TO THE ABOVE RESERVE
Current Mineralised Stockpiles
31.17
0.04
12,291
38.29
0.05
17,844
In situ resource (R3 Deeps)
Measured
Indicated
Sub-total Measured and Indicated Resources
Inferred Resources
Total Resources
3.72
10.41
45.31
5.44
50.75
0.27
0.22
0.10
0.20
0.11
10,134
22,636
45,062
11,087
56,149
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
8,579
52,711
Ranger Ore Stockpiles and Pit 3
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT
FUTURE SUPPLY
AS AT 31 DECEMBER 2015 CUT-OFF
GRADE 0.20% U3O8
AS AT 31 DECEMBER 2014 CUT-OFF
GRADE 0.20% U3O8
ORE (MT) % U3O8
t U3O8
ORE (MT) % U3O8
t U3O8
JABILUKA ORE RESERVES (ALL WRITTEN BACK TO RESOURCE)
Proved
Probable
Total Proved and Probable Reserves
JABILUKA MINERAL RESOURCES
Measured
Indicated
Sub-total Measured and Indicated
Inferred Resources
Total Resources
*Rounding differences may occur
–
–
–
1.21
13.88
15.09
10.03
25.12
–
–
–
0.89
0.52
0.55
0.54
0.55
–
–
–
10,769
72,176
82,945
54,162
137,107
–
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
15,330
16,440
57,500
73,940
Competent persons
Ranger and Jabiluka 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).
The JORC Code 2012 envisages 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. 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) 2015 Annual Statement of Reserves
and Resources which was released to ASX on 28 January 2016 and can be found at:
http://www.asx.com.au/asxpdf/20160128/pdf/434mvv7l0j6nhn.pdf
Neither the information that relates to Ranger and Jabiluka Mineral Resources or Ore Reserves, nor the underlying resource models, have
changed since the ERA 2015 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 Ore Reserves and Mineral Resources is based on information compiled by geologist
Stephen Pevely (a full time employee of ERA).
Stephen Pevely is a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the
style of mineralisation and the type of deposit under consideration, and to the activity being undertaken, to qualify as a Competent Person
as defined in the JORC Code 2012. Stephen Pevely consents to the inclusion in this report of the matters based on his information in the
form and context in which it appears.
Summary data for year end 2014 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 may result if the calculations are
repeated using the tabulated figures.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT
SALES AND MARKETING
Under ERA’s sales and marketing agreement with Rio Tinto
Uranium all production from ERA and the Rössing uranium
mine in Namibia (which is also majority-owned by Rio Tinto)
is purchased by Rio Tinto Uranium and sold to nuclear utility
customers around the world. ERA’s uranium is ultimately
delivered to a variety of customers in the United States of
America, Europe, China, Japan, South Korea and Taiwan.
ERA’s exposure to the spot price is reduced by an emphasis
on long-term contracting in order to capture the highest
market value for its product. The average realised price
achieved in 2015 was US$51.99 per pound compared with
the average spot price of US$36.68 per pound.
The short term uranium market continued to be challenging
for producers in 2015, in an environment where supply was
greater than demand by approximately 25 million pounds
of uranium oxide. Most Japanese reactors remain offline,
and some older units in the United States of America
and Europe are being closed prematurely due to low
electricity prices in some regions. These developments have
reduced demand in the short term, while mine production
has continued to expand in recent years, particularly in
Kazakhstan and Canada. Moreover, utilities are holding
high levels of uranium inventories in various forms, which
have also reduced near-term demand as well as long-term
contracting activity.
However, the longer-term outlook for uranium is more
positive.
China continues its strong commitment to nuclear power
development, with 29 units in operation and another 22
under construction. ERA was the first Australian supplier of
uranium oxide to China, and it remains an important and
growing market.
A number of other countries are expanding nuclear power
for purposes of energy security and because of the low
carbon emissions associated with the generation of electricity
through nuclear. At present, new nuclear units are under
construction in South Korea, Finland, France, the United
States of America and Russia. The United Arab Emirates
has embarked on the first major nuclear programme in the
Middle East, with four units under construction, the first
of which will enter service in 2017. ERA, through Rio Tinto
Uranium, is expected to be one of the United Arab Emirates’
initial suppliers of uranium oxide following the signing of the
Australia-UAE bilateral agreement.
Four years after the failure of the facility at Fukushima, there
were some encouraging signs in Japan, as the first two
units returned to service during 2015. Following the failure
at Fukushima, all of Japan’s 54 units were shut down while
the regulatory system was overhauled. The two reactors,
Sendai 1 and 2, were approved to restart under new
regulatory standards in the second half of 2015 and another
26 units are currently undergoing revised safety reviews in
anticipation of eventual restart. This process is likely to take
a number of years, since all reactors returning to service
must meet the Japanese Nuclear Regulation Authority’s
stringent post-Fukushima safety requirements.
In November, Australia finalised a long-term bilateral civil
nuclear agreement with India to export uranium for nuclear
power generation. The agreement means that Australia
can now export uranium to India for use in that country’s
safeguarded nuclear units. India has 21 operating reactors
and has ambitious plans to add more reactors to help meet
its rapidly growing electricity needs in a low carbon manner.
India also imports uranium from Canada, Russia, and
Kazakhstan.
Drummed production of uranium oxide ready for shipping
20
ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT HEALTH AND SAFETY
Safety is a core value for ERA. The team at ERA is
committed to zero harm.
A comprehensive and co-ordinated focus on safety
delivered a significant improvement in safety performance
for ERA in 2015.
This was achieved through a variety of programmes and
activities designed to ensure that safety was a part of
everyday workplace conversations and to build awareness at
all levels within the business.
One of the key safety performance measures used by ERA
is the All Injury Frequency Rate (AIFR) which expresses
the frequency of recordable injuries – lost time injuries,
restricted work injuries and medical treatment cases per
200,000 hours worked.
In 2015 ERA achieved an AIFR of 0.67, compared with 1.27
in 2014, and 0.91 in 2013.
AUDITS
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 February ERA underwent independent surveillance
audits of its integrated Health, Safety and Environment
Management System. The surveillance audits ensure the
systems remain on track for successful recertification in
2017 by identifying opportunities for improvement.
The 2015 surveillance review had no major findings for
ERA, which confirms the health, safety and environment
governance and procedures are meeting objectives.
In addition ERA participated in an audit of health, safety
and environment standards and management systems in
November.
SAFETY LEADERSHIP
Safety leadership training was conducted at ERA during
August. The training was designed to re-enforce leadership
accountability for safety at all levels ranging from senior
management through to supervisors and team leaders.
The audit involved personnel from other Rio Tinto
operational sites travelling to ERA to conduct a review of
ERA’s progress in implementing the recently updated Rio
Tinto safety standards, which are to be fully implemented
by 2016.
A key focus of the training was to increase contact with
front line teams through various mechanisms including
increased participation by leaders in tool box talks and start
of shift conversations.
MANAGING HEAT AND HUMIDITY
During the hotter months of the year, hydration and heat
stress are critical issues for ERA’s workforce, especially for
employees and contractors required to work outdoors while
wearing protective clothing and equipment.
Each year ERA implements programmes designed to
encourage behaviours which can help to manage heat
stress and maintain hydration.
In 2015 these hot weather programmes were expanded to
encourage workers to consider areas like attitude, mental
health and job design as part of working in an environment
of extreme heat and humidity.
As an example, the environmental weed spraying team
has moved its start time to 6am, allowing more work to be
completed in the cooler part of the early day and allowing
the majority of field work to be finished prior to 2pm which
is the hottest part of the day.
UPDATED RIO TINTO SAFETY STANDARDS
First introduced in 2001, and updated in 2011, the Rio Tinto
safety standards were updated again in 2015 and reflect
the Rio Tinto Group’s latest learnings for health, safety,
environment and communities and social performance.
The new standards rationalise previous requirements,
improving clarity and efficiency, and support improved
governance and monitoring across the Rio Tinto Group.
NEW CRITICAL RISK MANAGEMENT SYSTEM
In 2015 ERA began roll out of a new critical risk
management (CRM) process implemented by Rio Tinto.
CRM is designed to ensure that each work area has a clear
understanding of what potentially fatal risks are associated
with work activities, and ensure there are effective controls
in place and verified to manage those risks.
The CRM programme implementation commenced in
November 2015. The new process ensures a standardised
approach across all Rio Tinto managed sites and supports a
proactive approach to managing critical risks.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT RADIATION MONITORING
ERA maintains a comprehensive radiation monitoring
programme at Ranger, in accordance with the Company’s
Radiation Policy and Radiation Management Plan.
This enables the Company to achieve the performance
outcomes described in ERA’s Health, Safety and
Environment Management System, which is certified to
Australian (AS4801) and international (ISO14001) standards.
These performance outcomes require that radiation
exposure to workers, the public and the environment are as
low as reasonably achievable.
A variety of mobile and fixed monitoring stations are
used to monitor radiation. There are also personal
monitoring systems that are used to capture individual
worker radiation dose.
Monitoring results are subject to review prior to being
finalised. Preliminary results from the first three quarters of
2015 for workers, the public and the environment were well
below regulatory dose limits. Results for the fourth quarter
will be finalised and released early in 2016.
Monitoring results are compared to limits recommended
by the International Commission on Radiological Protection
(ICRP) for uranium industry workers as adopted by
Australian legislation.
The ICRP sets two levels of radiation exposure, other than
from natural and medical sources, to distinguish between
two types of people: members of the public and radiation
workers.
These radiation exposure limits (above natural background
and medical exposures) are:
• Members of the public: 1 millisievert (mSv) per annum
• Radiation workers: 20 mSv per annum over a five year
period with a maximum of 50 mSv in any one year
ERA employees and contractors whose occupational
exposure to radiation may exceed 5 mSv per year are
declared ‘designated’ workers and their exposure is more
stringently monitored.
Examples of activities at Ranger that require a designated
worker status include mine production, process production,
process maintenance and electrical maintenance.
Doses are calculated using the methodology required by the
Code of Practice on Radiation Protection and Radioactive
Waste Management in Mining and Mineral Processing.
The total effective dose is the sum of the dose from three
exposure pathways: external gamma radiation, inhalation
of radon decay products and inhalation of long lived alpha
activity.
ERA provides occupational radiation dose data for workers
at Ranger mine to the Australian Government’s Australian
National Radiation Dose Register (ANRDR).
The ANRDR is managed by the Australian Government to
collect, store, manage and distribute the radiation doses
records received by individuals working at uranium mining
and milling sites.
Designated workers are able to access the ANRDR, and
ERA also provides a copy of personal dose records to all
designated workers.
RESULTS
To ensure the highest possible quality control on radiation
doses, the results are reviewed internally by ERA and
externally by the Company’s regulators.
The maximum and mean annual radiation doses received
by designated workers and the maximum radiation doses
received by non-designated workers during 2015 will be
reported in the 2015 Annual Radiation Protection and
Atmospheric Monitoring Report.
The 2015 report will be submitted to stakeholders in March
2016.
Preliminary analysis of the available dose results for 2015
indicates that all occupational and public radiation doses
remain well below the national and international dose limits.
The table on this page provides a summary of the maximum
and mean annual radiation doses received by designated
and non-designated workers for the first three quarters of
the year.
The doses are in line with the ICRP principles of Justification,
Optimisation and Limitation and remain at the lower end of
the spectrum for uranium workers.
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 two per cent) of
the 1.0 mSv member of public dose limit and less than one
per cent of the natural background in Australia of between
2 and 3 mSv (which varies according to location).
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)
1.05
0.25
1.43
0.38
1.40
0.28
0.13
0.08
0.29
0.15
0.36
0.14
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT REGULATORY FRAMEWORK
Ranger processing plant team members Kieran Leftwich,
Elizabeth Miller and Xavier Martini
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 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, Innovation and
Science;
• Northern Territory Department of Mines and Energy;
• Commonwealth Government’s Supervising Scientist
Branch;
• 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.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT REGULATORY FRAMEWORK
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,
Innovation and Science and the Commonwealth Supervising
Scientist Branch.
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/science/supervising-
scientist/communication/committees/arrac
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 Branch and Technological Societies with the
remaining representatives being from the Commonwealth
Supervising Scientist Branch, 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/science/supervising-
scientist/communication/committees/arrtc
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 Environment 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.
Stockpiled ore being loaded for processing
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Report
ENERGY RESOURCES OF AUSTRALIA LTD 25
CONTENTS
Overview ................................................................................................................................27
Environment ...........................................................................................................................28
Land .......................................................................................................................................32
Employment ...........................................................................................................................33
Community .............................................................................................................................35
Due to the sensitive nature of
the surrounding environment,
ERA strives for safety leadership,
environmental protection and strong
and enduring relationships with
all stakeholders.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTFINANCIAL REPORTSUSTAINABILITY DEVELOPMENT REPORT OVERVIEW
The area surrounding ERA’s operations is internationally
recognised for unique ecosystems and biodiversity,
significant environmental and cultural heritage value 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 2015 was
overseen by the Commonwealth Government’s Supervising
Scientist Branch, which conducts extensive monitoring
and research programmes on the Ranger Project Area and
Jabiluka Mineral Lease.
ERA will continue to engage with the Mirarr Traditional
Owners, local communities and all levels of government to
protect the natural environment in which it operates.
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.
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ENERGY RESOURCES OF AUSTRALIA LTD FINANCIAL REPORT2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORT ENVIRONMENT
ERA is committed to protecting the environment in which
it operates. Measures to protect the environment include a
wide range of preventative 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. ERA has a strong history of
engagement and co-operation with its regulators and
other stakeholders to ensure that the environment remains
protected.
The Commonwealth’s Supervising Scientist Branch 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.
The Supervising Scientist Branch uses a structured
programme of audits and inspections, in conjunction with
the Northern Territory Department of Mines and Energy to
supervise regional uranium mining operations.
ERA’s monitoring results and the results from the
Supervising Scientist Branch are made available to the
public.
During 2015, results from statutory monitoring programmes
showed that ERA continued to protect the surrounding
environment.
WATER
Effective water management is a fundamental element of
ERA’s business and environmental protection activities.
The Kakadu region’s extended dry periods, potential for
extreme storms, and highly variable annual rainfall requires
flexibility and innovation in ERA’s approach to water
management.
The 2014-15 wet season was a below average rainfall year
with a total of 1182 millimetres recorded at Jabiru Airport to
30 June 2015 (annual average 1566 millimetres).
Drier conditions resulted in a 25 per cent reduction in the
volume of pond water treated through ERA’s microfiltration
and reverse osmosis treatment facilities.
It was a pivotal year for ERA in water management, with
new systems and infrastructure in place to send production
tailings and brine to Pit 3, and enabling a planned steady
reduction in process water inventories.
ERA’s operational and planning activities are built on a
comprehensive water management strategy that is based
on industry-leading monitoring systems and significant
investment in infrastructure for the storage, transfer and
treatment of water.
WATER MANAGEMENT PLAN
ERA’s Health, Safety and Environment Management
System provides the governance framework for all water
management operations and planning activities at Ranger.
Water management performance objectives and outcomes
set out in the Health, Safety and Environment Management
System are delivered through ERA’s Water Management Plan.
The Water Management Plan is updated every year and
submitted to regulatory authorities for approval, with advice
and input from the Minesite Technical Committee.
The 2014-2015 Water Management Plan was approved in
March and the updated 2015-16 Water Management Plan
was submitted to the Minesite Technical Committee in
October.
The Water Management Plan covers water capture, storage,
supply, distribution, sampling, use, treatment and disposal
across the Ranger mine site, and describes the systems for
routine and contingency management of process, pond and
release water.
WATER MANAGEMENT INFRASTRUCTURE
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.
ERA achieves that operational flexibility through a range of
water management facilities, systems and infrastructure,
including:
• a process water transfer pumping system connecting the
Tailings Storage Facility with Pit 3;
• surface water and seepage interception trenches around
stockpiles;
• use of continuous real-time water quality monitoring
stations;
• an expanded network of ground water monitoring bores
(over 220);
• installation of around 7,700 prefabricated vertical drains
(wicks) across the Pit 1 tailings area;
• successful diversion of over 60 per cent of Pit 1
catchment away from the process water system to the
pond water system;
• water treatment plants; and
• Brine Concentrator.
PEAK PROCESS WATER MILESTONE ACHIEVED
ERA’s water management facilities, systems and
infrastructure combined in late 2015 to achieve a significant
turning point in ERA’s operational history – the beginning of
sustained reduction in process water volumes contained in
the Tailings Storage Facility.
This has been achieved through ERA’s progressive
rehabilitation of Pit 1 and Pit 3 (see Operations page 12),
in conjunction with the Brine Concentrator, the newly
commissioned dredge and associated tailings and process
water pumping systems, and brine injection wells.
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ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTFINANCIAL REPORTSUSTAINABILITY DEVELOPMENT REPORT ENVIRONMENT
The dredge will be used to transfer tailings from the
Tailings Storage Facility to Pit 3. In addition, all new tailings
generated by production operations are now also being
directed to Pit 3.
The trenches are excavated down to base rock at a depth of
approximately four metres and backfilled with impermeable
material placed over a water collection system to catch
water on the upstream side.
Process water from the Tailing Storage Facility is treated by
the Brine Concentrator, which has the capacity to treat up
to 1.83 gigalitres of process water per year.
The pure distillate from the Brine Concentrator is released
via irrigation or to local waterways and the concentrated
brine waste stream will be injected into the base of Pit 3.
Placement of the waste rock capping layer and an
impermeable laterite seal over the tailings mass in Pit 1 has
enabled the conversion of more than 60 per cent of the Pit
1 catchment from process water to pond water, significantly
reducing the volume of process water being sent to the
Tailings Storage Facility.
These actions will continue in future years and achieve the
net effect of a continual reduction in both the tailings mass
and the volume of process water being stored in Tailing
Storage Facility.
GULUNGUL CREEK
Water quality monitoring in Gulungul Creek during the
2014-15 wet season recorded two occasions in which
electrical conductivity results exceeded associated trigger
levels set for Magela Creek.
Gulungul Creek is an ephemeral waterway that flows during
the wet season along the western side of the Ranger mine
site, and joins Magela Creek downstream of the mine.
ERA and the Supervising Scientist Branch conducted
additional monitoring work in response to these events
to quantify possible environmental impacts and identify
potential contributing water sources.
The Supervising Scientist stated in its 2014-2015 Annual
Report that preliminary findings of this monitoring work
indicated that “any detectible biological effect was
unlikely”.
This conclusion is supported by the results of in-situ toxicity
monitoring, direct toxicity testing and macro-invertebrate
studies carried out by the Supervising Scientist Branch.
INTERCEPTION TRENCHES
In response to elevated levels of electrical conductivity in
Gulungul Creek in the 2014-15 wet season ERA has installed
approximately 1,000 metres of interception trenches during
the 2015 dry season. This complements the interception
trench system installed in late 2014.
The interception trenches are located next to the western
wall of the Tailings Storage Facility.
Water collected in the trenches then drains to a new sump
at the north-west corner of the Tailings Storage Facility and
from there is transferred to ERA’s pond water management
and treatment system.
The interception trenches prevent significant amounts of
shallow groundwater from entering the Gulungul Creek
system.
In the past, ERA has successfully used interception trenches
to divert surface and shallow groundwater run-off away
from Retention Pond 1.
NEW MONITORING POINTS
During 2015 ERA extended its comprehensive groundwater
monitoring network with the installation of 21 new wells
and additional real-time monitoring telemetry equipment
into nine wells.
The telemetry equipment transmits data wirelessly providing
continual information about ground water conditions
including water quality parameters, such as electrical
conductivity.
Technical Officer Water Monitoring, Richard Lindner
undertakes onsite testing
29
ENERGY RESOURCES OF AUSTRALIA LTD FINANCIAL REPORT2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORT ENVIRONMENT
The new monitoring wells will provide valuable data on the
effectiveness of ERA’s remedial actions to intercept shallow
groundwater and maintain water quality in local waterways.
ERA’s water monitoring system comprises over 220
groundwater bores across the Ranger operational area.
In addition, ERA operates 14 continuous real-time water
quality sensing stations located within the Magela and
Gulungul creek systems, upstream and downstream of the
Ranger mine. Monitoring stations are equipped with auto
samplers that collect water samples triggered by in-stream
events.
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 and
timely data.
This data is shared with members of the Minesite Technical
Committee, including the Supervising Scientist. The
Supervising Scientist also conducts independent monitoring
of waters upstream and downstream of the Ranger
mine site. The results are published on its website:
https://www.environment.gov.au/science/supervising-
scientist/supervision/arr-mines/ranger
INDEPENDENT SURFACE WATER WORKING GROUP
The 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.
During 2015 further progress was made on
recommendations set out in the ISWWG’s 2013 review
report.
This included a review of historic sediment monitoring data
and past and recent literature to inform the development of
a new sediment monitoring programme. The recommended
approach is currently being trialled alongside investigative
studies in Coonjimba Billabong.
In addition, the compliance monitoring programme has
been updated through the Minesite Technical Committee
and was applied during the 2015/16 wet season.
ERA has also addressed recommendations for improved
quality control and monitoring and reporting practices.
Continued improvement will be addressed through the
annually approved Water Management Plan.
30
Hydrogeologist Alana O’Neill inspects core drilled for
groundwater monitoring bores
MANAGING WATER BY 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 Tailings
Storage Facility or Pit 3 prior to treatment via the Brine
Concentrator;
• 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 retention ponds prior
to being put through reverse osmosis 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 conventional
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;
ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTFINANCIAL REPORTSUSTAINABILITY DEVELOPMENT REPORT ENVIRONMENT
• 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.
CLOSURE CRITERIA
ERA is currently in the process of developing closure
criteria for the Ranger mine, which are then subject to
consideration by relevant stakeholders, including the
Mirarr Traditional Owners, the Northern Land Council, the
Northern Territory Department of Mines and Energy, the
Commonwealth Department of Industry, Innovation and
Science and the Supervising Scientist Branch.
During 2015, ERA continued work to develop and define
these closure criteria, which set out the actions required
to rehabilitate the mine with no detrimental impact to the
surrounding environment of Kakadu National Park.
In accordance with the existing Ranger Authority, all mining
and processing activities at Ranger must cease by January
2021 and rehabilitation must be completed by January 2026.
CULTURAL CRITERIA
Part of the closure criteria development work completed
this year related to a review of cultural requirements for
closure activities conducted by anthropologist and linguist
Murray Garde.
The aim is to ensure closure planning and activities,
including rehabilitation and revegetation, take into account
important cultural values, and re-create a cultural landscape
in which the Mirarr can resume traditional practices.
The report – Closure Criteria Development – Cultural is the
result of consultations with the Mirarr Traditional Owners
through the Gundjeihmi Aboriginal Corporation, together
with fieldwork and research conducted over a 12 month
period between 2013 and 2014.
After a period of consultation, the report was approved for
release by the Gundjeihmi Aboriginal Corporation in early
2015.
The report reflects the Mirarr Traditional Owners’ responses
to the cultural closure criteria objectives established by the
Ranger Closure Criteria Working Group.
This includes a set of 12 cultural closure criteria, outlines the
post-closure land use and provides a list of vegetation that
has cultural significance.
The successful completion of these cultural closure criteria is
a significant milestone.
Examples of desired rehabilitation and revegetation
outcomes that reflect cultural values include:
• the landform can be accessed, and is readily traversable,
by people;
• culturally important flora and fauna are present;
• traditional practices can resume (e.g. occupancy,
camping, burning and harvesting); and
• visual connection with key cultural sites is re-established.
Principal Advisor Rehabilitation and Ecology Ping Lu at the
Jabiluka revegetation site
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REVEGETATION
Revegetation is a key component of the progressive
rehabilitation activities which have been taking place at
Jabiluka and Ranger.
Over the year, significant progress was made in
rehabilitation management at both sites, including the
trials carried out to determine the best path forward for
revegetation of the Ranger site.
JABILUKA
Over the 2014-15 wet season, hundreds of native tube
stocks were planted as part of the third phase of a
revegetation project at Jabiluka, bringing the total plantings
to approximately 16,000 for the period between 2005
and 2015.
The saplings were raised from seeds collected locally and
consisted of 22 different species of native plants. This work
was carried out in conjunction with Kakadu Native Plants,
a local indigenous business. Eight indigenous workers from
Kakadu Native Plants and five ERA indigenous trainees were
part of the team which helped in the planting programme.
A total of 19 monitoring plots and two transects were
established and surveyed for progress. In October, survey
results revealed a tree density of 1,530 stems per hectare
of which about 500 stems per hectare were eucalyptus and
non-acacia species, which is above target planting density
of 1,000 stems per hectare.
Ongoing weed, fire and water quality management is in
place at Jabiluka.
RANGER
Closure studies and revegetation trials at Ranger progressed
throughout the year. A trial comparing four different
revegetation methods across an eight hectare trial landform
has determined that the optimum method for revegetation
at Ranger is by using tubestock plantings grown on waste
rock. The four metre section of the landform which
consisted of waste rock from the run of mine proved to
be the most successful option. Annual monitoring results
found that the height, trunk diameter and density of the
tubestocks which were planted on the waste rock far
exceeded those planted on a mix of laterite and waste rock
and direct seeding methods. Weeds were also less prevalent
on the waste rock section of the landform and there was no
problem with waterlogging.
There have been some excellent indicators of a functional
nutrient cycle on the trial landform. These indicators include
various species of mushrooms. Fauna like frogs, spiders,
birds, snakes, rock rats and dingoes are also colonising on
the revegetated areas. During the year, permission was
granted for ERA, through Kakadu Native Plants, to collect
seeds from within Kakadu National Park to raise tubestocks
for planting at Ranger.
During the year, Dr Ping Lu, Principal Advisor Rehabilitation
and Ecology was assisted on the trial landform studies by
two students from Charles Darwin University who were
undertaking Masters and PhD studies. Ping is a Fellow of
the Charles Darwin University and a co-supervisor of the
students.
WEED MANAGEMENT
ERA carries out regular weed control activities on the
Ranger Project Area and Jabiluka Mineral Lease.
Activities are guided by ERA’s land management strategy
which targets priority species including Annual pennisetum,
Mission Grass and Rattlepod.
The weed season runs from October to May. In-field weed
monitoring shows that ERA’s programme has resulted in a
progressive reduction of weed infestation over the Ranger
Project Area.
In 2015 ERA adopted a qualitative approach to weed
management, providing a greater role for the Land
Management team to assess trends in defined weed
management areas, backed by regular on-ground
observations.
CONTROLLED BURN
In some circumstances ERA uses controlled burns to
manage weeds. In October a weed management burn was
approved outside of the Annual Fire Plan and was carried
out on a day when weather conditions became more
extreme than forecast.
The fire travelled across the Ranger Project Area into
Kakadu National Park. ERA supported Parks Australia and
Northern Territory Fire and Rescue Service with on-ground
fire-fighting activities and funded the use of helicopter
water bombing to extinguish the fire.
The incident and response has resulted in development
of closer working relationships with Parks Australia and
Northern Territory Fire and Rescue Service through a formal
working arrangement and additional internal approval
processes for controlled burns outside of the burn season
which traditionally finishes at the end of June.
32
ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTFINANCIAL REPORTSUSTAINABILITY DEVELOPMENT REPORT EMPLOYMENT
After significant reduction in workforce size in recent years
due to completion of mining operations and a number of
major projects, ERA’s employee numbers and turnover have
stabilised.
ERA engaged eight new Indigenous trainees in 2015.
These trainees work in areas including plant operations,
water management, warehousing, and community
relations.
At 31 December 2015, ERA’s total workforce was 409
people (full time equivalent, including 38 contractors).
This compares with 415 at the same time in 2014, and
519 in 2013.
ERA also directly employed 10 apprentices, five school-
based apprentices, and eight Indigenous trainees. At year
end Indigenous employment was approximately 13 per cent
of employees, a slight increase over 2014 (12 per cent).
ERA’s female employment participation declined slightly
during 2015 to 17 per cent of employees (2014: 18 per cent).
The average rolling staff turnover in 2015 was 21 per
cent (2014: 39 per cent) reflecting previous years’
completion of open pit mining operations, completion of
major infrastructure projects and associated studies, and
conclusion of related redeployment programmes.
INDIGENOUS EMPLOYMENT
ERA maintains a strong focus on Indigenous employment
as a consequence of its role as a major employer in Jabiru
and the West Arnhem region.
At 31 December 2015, ERA had a total of 49 Indigenous
employees, representing 13 per cent of employees
(2014: 12 per cent).
Indigenous employees are engaged in a variety of roles
within ERA, ranging from operational functions through to
leadership positions at superintendent and senior-supervisor
levels.
Indigenous trainees are paired with workplace mentors.
The Mentoring Programme 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.
Four of the new Indigenous trainees for 2015 have been
recruited via the Pre-Employment Programme.
PRE-EMPLOYMENT PROGRAMME
ERA continued support for the Pre-Employment Programme,
which provides opportunities for school leavers and other
local people to learn skills and gain accreditation to enable
them to enter the workforce or find new local employment.
The programme is supported by a range of stakeholders
including ERA, Warnbi Aboriginal Organisation, Carey
Training, Westpac, Jabiru Medical Centre and the Northern
Territory Department of Business.
In 2015 eight participants completed the five week course
and successfully achieved accreditation in Certificate II –
Resource Infrastructure Work Preparation, which includes a
Certificate in First Aid.
INDIGENOUS ENTERPRISE DEVELOPMENT
The Indigenous Enterprise Development scheme completed
its third year of operation in 2015. The scheme involves
ERA working with the Gundjeihmi Aboriginal Corporation
and local businesses to develop employment and training
opportunities.
During the year ERA worked with the Indigenous operators
of the Anbinnik Caravan Park in Jabiru on a proposal to
provide overflow accommodation for ERA employees or
contractors.
ERA also worked with Carey Training, an Indigenous owned
and operated registered training organisation, to deliver the
2015 Pre-Employment Programme.
In addition local Indigenous people can gain recognised
skills accreditation through a Certificate III in Land
Management by participating in ERA’s Indigenous
Revegetation Workforce.
The Indigenous Enterprise Development scheme provides
accredited training for people from local Indigenous
communities to work on regional revegetation activities,
such as progressive rehabilitation activities at ERA, weed
management and fire monitoring.
ERA Community Relations team members Nicole Jacobsen
and Keleasha Ogden in Jabiru
33
ENERGY RESOURCES OF AUSTRALIA LTD FINANCIAL REPORT2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORT EMPLOYMENT
EDUCATION PARTNERSHIP
ERA continued its support for the Education Partnership
which is designed to provide assistance and encourage
collaboration with the West Arnhem College.
The Education Partnership provides education and training
opportunities which support employment and career options
for students and families in the West Arnhem region.
The Partnership improves education and employment
outcomes for local community members, supports regional
development, aims to build capacity and resilience in
the local economy and supports sustainable regional
development.
APPRENTICESHIPS
In 2015 ERA continued its apprenticeship programme with
a new intake of four apprentices, bringing the total number
of ERA apprentices to 10. The apprentices are engaged for
four years and achieve Certificate III in various mining and
industry related fields.
In 2015 ERA engaged five school-based apprentices.
School-based apprentices continue their year 11 and
year 12 schooling while maintaining part-time work at
ERA. A school-based apprenticeship can lead to further
employment or a full-time apprenticeship, either with ERA
or with another employer.
An integrated programme of activities includes work
experience placements and school-based apprenticeships
for local students at ERA, school visits and presentations by
ERA employees, and support for school-based education
programmes involving resource industry development.
CULTURAL AWARENESS
ERA’s Cultural Awareness Programme provides new
employees and contractors with an introduction to the
unique cultural, environmental and historical values of the
Kakadu region and the Mirarr Traditional Owners.
During 2015 ERA continued to provide opportunities for
school-based apprenticeships and supported a school
expedition “road show” to highlight career pathways in the
mining sector.
During the year 35 new employees and long-term
contractors participated in cultural awareness training.
The programme is delivered in partnership with the
Gundjeihmi Aboriginal Corporation representing the
Mirarr Traditional Owners.
Community Relations Trainee Keleasha Ogden
34
ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTFINANCIAL REPORTSUSTAINABILITY DEVELOPMENT REPORT COMMUNITY
RELATIONSHIP WITH MIRARR TRADITIONAL OWNERS
The Mirarr Traditional Owners of the land on which ERA
operates are key stakeholders, and their input and support
for our activities are integral to our business.
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.
Throughout 2015 ERA held discussions with the Gundjeihmi
Aboriginal Corporation on a diverse range of matters
including rehabilitation planning, cultural heritage and
environmental protection, employment and training,
water management, housing and town planning, royalties,
community activities and the Kakadu West Arnhem
Social Trust.
During 2015, ERA and the Gundjeihmi Aboriginal
Corporation also held formal negotiations about the
future of mining at Ranger.
RANGER AUTHORITY
The negotiations about the future of mining at Ranger
were specifically focussed on the Company’s proposal to
extend the Ranger Authority beyond 2021, for the purpose
of mining the Ranger 3 Deeps resource. In the second half
of 2015, the Gundjeihmi Aboriginal Corporation formally
advised that the Mirarr Traditional Owners did not support
an extension to the Ranger Authority.
The multi-million dollar trust supports initiatives that deliver
long-term, positive benefit to the
local community.
The Kakadu West Arnhem Social Trust’s activities include
support for the Children’s Ground programme, which
delivers education, health and allied support services in
Jabiru and outstations across Kakadu, the Culture First
Programme at Jabiru Area School, and the Gunbang Action
Group’s alcohol management coordination programme.
The Gundjeihmi Aboriginal Corporation and the Northern
Land Council represent the Mirarr Traditional Owners on
Ranger related committees which meet on a regular basis.
These include the Ranger Minesite Technical Committee
and the Closure Criteria Working Group.
ERA and the Gundjeihmi Aboriginal Corporation continue
to collaborate in regard to the township of Jabiru, including
town governance, housing, local and Northern Territory
Government engagement, infrastructure and local business
development.
ROYALTY PAYMENTS
Following the completion of Pit 3 mining operations,
ERA continues to generate revenue from the processing
of stockpiled ore. This Ranger production will continue to
deliver royalty payments to the Indigenous community and
the Northern Territory Government.
ERA continues to maintain discussion with the Gundjeihmi
Aboriginal Corporation on a wide range of issues.
These royalty payments are calculated on 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.
The remaining 1.25 per cent of royalties derived from
Ranger sales revenue is paid to the Commonwealth and
distributed to the Northern Territory Government.
In 2015, ERA’s royalties totalled $17.9 million. This compares
with $15.4 million paid in 2014 and $18.4 million 2013.
Under current agreements, royalty payments are expected
to decline in line with forecast production rates.
With the decision to defer further studies on the Ranger 3
Deeps project, ERA will continue to process remaining low
grade ore stockpiles.
ENGAGEMENT AND COLLABORATION
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.
The Relationship Committee, established under the
2013 Ranger Mining Agreement, met on a regular basis
throughout 2015 to promote information sharing and
collaboration, to respond to Mirarr questions on Ranger
operational matters and to discuss opportunities for
increasing local Aboriginal participation in business
development, training and employment.
Each year ERA makes a Sustainability Payment to the
Northern Land Council which is passed through to the
Kakadu West Arnhem Social Trust. The Kakadu West
Arnhem Social Trust is a charitable trust founded by senior
Mirarr Traditional Owner Yvonne Margarula in 2013.
The Trust funds programmes which aim to address
Aboriginal disadvantage in the Kakadu West Arnhem
region. Along with the Gundjeihmi Aboriginal Corporation,
ERA is represented on the Kakadu West Arnhem Social
Trust board.
35
ENERGY RESOURCES OF AUSTRALIA LTD FINANCIAL REPORT2015 ANNUAL REPORTSUSTAINABILITY DEVELOPMENT REPORT COMMUNITY
JABIRU OUTLOOK
ERA is a substantial contributor to the economy, population,
infrastructure and services in Jabiru. ERA continues to
work within the current legal framework which requires
the Company to cease mining and processing activities in
January 2021. The current Jabiru town lease is also due to
expire in July 2021.
ERA is seeking to understand the social and economic
implications of a potential exit from Jabiru and has begun
preliminary contingency planning for reducing its presence
in Jabiru.
In 2015 ERA continued to advocate for agreement on the
future governance arrangements, to take effect in 2021, in
order to provide certainty for the town.
The long term future for Jabiru is closely linked to formal
recognition of Mirarr traditional ownership of the land on
which Jabiru is located and the options for future lease
governance.
COMMUNITY EVENTS
In 2015, ERA hosted a series of organised site visits to the
Ranger mine, providing an opportunity for approximately
450 local community members and tourists to see the
Ranger operations and the work being done in parallel to
protect the environment.
ERA’s community partnership sponsorship programme
provides financial and in-kind support for local community-
based events, schools, sporting clubs and cultural events.
ERA continued its long-running support for the Mahbilil
festival which was held in Jabiru in September as well as
the Kakadu Triathlon which was held in Jabiru in May and
raised $7,193 for CareFlight.
ERA was again a major sponsor of the National Indigenous
Music Awards in Darwin which celebrates the achievements
of traditional and contemporary musicians.
General Manager – Operations, Tim Eckersley hosts a
meeting with Jabiru business and community leaders
36
ENERGY RESOURCES OF AUSTRALIA LTD 2015 ANNUAL REPORTFINANCIAL REPORTSUSTAINABILITY DEVELOPMENT REPORT DIRECTOR'S REPORT
Financial
Report
CONTENTS
Director’s Report ..............................................................................................................38
Auditor’s Independence Declaration .................................................................................63
Corporate Governance Statement .....................................................................................64
Statement of Comprehensive Income ................................................................................71
Balance Sheet ...................................................................................................................72
Statement of Changes in Equity ........................................................................................73
Cash Flow Statement ........................................................................................................74
Notes to the Financial Statements .....................................................................................75
Directors’ Declaration .....................................................................................................108
Independent Auditor’s Report .........................................................................................109
Shareholder Information ................................................................................................. 111
2015 ASX Announcements ............................................................................................. 113
Ten Year Performance ..................................................................................................... 114
Index .............................................................................................................................. 115
ENERGY RESOURCES OF AUSTRALIA LTD 37
37
ENERGY RESOURCES OF AUSTRALIA LTD DIRECTOR’S REPORT
Directors
Mr Peter Mansell
CHAIRMAN
B.Com, LLB, H. Dip. Tax, FAICD
Ms Andrea Sutton
CHIEF EXECUTIVE
BE (Hons) Chemical,
GradDipEcon, GAICD
Mr Bruce Cox
NON-EXECUTIVE
DIRECTOR
BCom, CPA, MBA, GAICD
Appointed as Managing
Director and Chief Executive
in September 2013.
Ms Sutton brings extensive
operational, technical and
corporate experience to
ERA from her 21 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. Currently
Chair of the Northern
Territory Minerals Council
of Australia Management
Committee and Member of
the Northern Territory Mining
Advisory Council.
Appointed as a Director in
November 2014. Chair of the
Audit and Risk Committee
between June 2015 and
January 2016 and member
of the Remuneration
Committee between June
and December 2015.
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 34
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.
Appointed as a Director and
Chairman of the Board in
October 2015. Chair of the
Remuneration Committee
and member of the Audit and
Risk Committee.
Mr Mansell has extensive
experience in the mining,
corporate and energy sectors,
both as an advisor and as an
independent non-executive
Chairman and Director of
listed and unlisted companies.
He is currently a Director of
Aurecon Group Pty Ltd and
Foodbank of Australia Ltd.
Mr Mansell practised law
for a number of years as a
partner in corporate and
resources law firms in each
of South Africa and Australia.
Mr Mansell retired from
legal practice in 2004 and
has since held directorships
in a number of companies
including BWP Management
Ltd, Foodland Associated
Ltd, OZ Minerals Ltd, W.A.
Newspaper Holdings Ltd
(Chairman), Western Power
(Chairman) and Zinifex Ltd
(Chairman). Mr Mansell also
chaired the Advisory Board
of Pacific Aluminium Ltd in
anticipation of its intended
float in 2014.
Ms Joanne Farrell
NON-EXECUTIVE
DIRECTOR
BSc, Grad Dip Business Management
Appointed as a Director
in June 2014. Chair of the
Remuneration Committee
and member of the Audit
and Risk Committee between
June and December 2015.
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 28 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.
38
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT DIRECTOR’S REPORT
Directors
Mr Shane Charles
NON-EXECUTIVE
DIRECTOR
LLB
Mr Paul Dowd
NON-EXECUTIVE
DIRECTOR
BSc (Eng), FAusIMM, MAICD
Mr Simon Trott
NON-EXECUTIVE
DIRECTOR
BSc (Hon), GradDipFin, GAICD
Appointed as a Director in
October 2015. Member (from
October 2015) and now Chair
(from January 2016) of the
Audit and Risk Committee.
Mr Charles is currently
Chairman of the Toowoomba
and Surat Basin Enterprise,
an independent, business
driven organisation with a
vision to pursue sustainable
growth and diversity within
the region. He is at the
forefront of developing an
Asia strategy for the region
(principally in relation to
China) to allow producers and
exporters the opportunity
to access new markets and
capital. Mr Charles was also
the inaugural Chief Executive
Officer of the TSBE. Mr
Charles is a Commissioner
of the GasFields Commission
Queensland, a statutory
body designed to facilitate
and promote co-existence
between the on-shore gas
industry, rural landholders
and regional communities.
Mr Charles was previously
the Chairman of Stanwell
Corporation Limited.
Appointed as a Director in
December 2015.
Mr Trott has 18 years’
experience in the mining
industry, across various
roles in finance, business
development and operations
having worked in Australia,
Asia and the United
Kingdom. He was appointed
Managing Director, Rio
Tinto Diamonds, Salt and
Uranium in January 2016,
with accountability for the
marketing, operational and
commercial aspects of Rio
Tinto Diamonds, Dampier
Salt Limited and Rio Tinto
Uranium Canada, marketing
under Rio Tinto Uranium and
Rio Tinto’s investments in
ERA and Rössing Uranium.
Mr Trott is currently a director
of Dampier Salt Limited, a
director of Rössing Uranium
Limited and a director of
Chlor Alkali Unit Pte Ltd.
He holds a Bachelor of
Science (Hon), a Graduate
Diploma in Finance and
Investment and is a Graduate
Member of the Australian
Institute of Company
Directors.
Appointed as a Director
in October 2015. Member
of the Remuneration
Committee.
Mr Dowd is a mining
engineer with 50 years’
experience in the mining
industry, primarily in the
private sector, but also
serving in the public sector
as head of the Victorian
Mines and Petroleum
Departments. He is
currently a non-executive
Director of OZ Minerals Ltd
and PNX Metals Ltd. Mr
Dowd has previously held
senior executive positions
as Managing Director of
Newmont Australia Ltd and
Vice President Australia and
New Zealand Operations
for Newmont Mining
Corporation and prior to that
as Chief Operating Officer
of Normandy Mining Ltd. He
was previously Chairman of
Adelaide Resources Ltd and
a non-executive Director
of Macarthur Coal Ltd. Mr
Dowd is Chairman of the
CSIRO Minerals Resources
Sector Advisory Council, and
an Advisory Board Member of
the South Australian Minerals
and Petroleum Expert Group
(SAMPEG) and the University
of Queensland – Sustainable
Minerals Institute.
39
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT DIRECTOR'S REPORT
Directors
Mr Peter McMahon
CHAIRMAN
BEcon(Hons), MEcon, MSc
Dr Helen Garnett
NON-EXECUTIVE
DIRECTOR
BSc(Hons), PhD, PSM, FTSE, FAICD
Mr Peter Taylor
NON-EXECUTIVE
DIRECTOR
BA, BSc, LLB, LLM, FAICD
Appointed as a Director in
February 2007. Resigned as a
Director in April 2015.
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 November 2012 and
Chairman in January 2013.
Member of the Audit
and Risk Committee and
Remuneration Committee
before resigning as a
Director in June 2015.
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 a Director
in January 2005. Chair
of the Audit and Risk
Committee and member of
Remuneration Committee
before resigning as a Director
in June 2015.
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.
40
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT Mr John Pegler
NON-EXECUTIVE
DIRECTOR
BE (Mining), MAusIMM, MAICD
Dr David Smith
NON-EXECUTIVE
DIRECTOR
BSc (Hons), PhD, FAICD
Appointed as a Director in
July 2009. Member of the
Audit and Risk Committee
and Chair of Remuneration
Committee before resigning
as a Director in April 2015.
Mr Pegler 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 2015. Member of the
Audit and Risk Committee
and Remuneration
Committee before resigning
as a Director in June 2015.
Dr Smith is currently a
non-executive director
of Bradken Limited. He
is a former Chairman of
Bannerman Resources Limited
and non-executive director
of Atlas Iron Limited and
Macmahon Holdings Limited.
Prior to that Dr Smith has
had more than 30 years’
experience with Rio Tinto
in roles including Managing
Director of the Simandou
iron ore project in Guinea,
Managing Director of Pilbara
Iron and Managing Director
of Rössing Uranium Limited
in Namibia. His career has
spanned the uranium, coal,
salt, iron ore and aluminium
commodity sectors. Dr Smith
has a Bachelor of Science
(Hons) from the University of
New South Wales and a Ph.D
in Metallurgy. He is a Fellow
of the Australian Institute
of Company Directors and
Deputy Chairman of the West
Australian Ballet Company.
41
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT DIRECTOR'S REPORT
Executive Committee
Ms Andrea Sutton
CHIEF EXECUTIVE
BE (Hons) Chemical, GradDipEcon,
GAICD
Mr James May
CHIEF FINANCIAL OFFICER
BA (Hons) FCA
Mr Tim Eckersley
GENERAL MANAGER,
OPERATIONS
B.Sc. Agric (Hons)
Mr Eckersley was appointed
as General Manager
Operations in September
2012. Over the last 22 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.
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
15 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.
Appointed as Managing
Director and Chief Executive
in September 2013.
Ms Sutton brings extensive
operational, technical and
corporate experience to
ERA from her 21 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. Currently
Chair of the Northern
Territory Minerals Council
of Australia Management
Committee and Member of
the Northern Territory Mining
Advisory Council.
42
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Mr Thomas Wilcox
COMPANY SECRETARY
AND LEGAL COUNSEL
LLB, LLM, BCom
Mr Alan Tietzel
CHIEF ADVISOR
AGREEMENTS
BA, BCom, Dip Ed MBA
Mr Wilcox was appointed
as Company Secretary and
Legal Counsel in November
2013. Mr Wilcox joined the
Rio Tinto Group in 2009
and has previously served
as legal counsel in London
and Melbourne, working
predominantly with the
Exploration and Energy
Groups. Prior to joining the
Rio Tinto Group, Mr Wilcox
was employed in private
legal practice since 2003.
Mr Wilcox is a Director of
Australian Football League
Northern Territory.
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.
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. His employment with
ERA ceased on 1 March
2015. Dr Sinclair has over
30 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.
43
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL 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 MEETINGS6
REMUNERATION
COMMITTEE MEETINGS6
OTHER
COMMITTEE MEETINGS6
DIRECTOR
SCHEDULED6 SHORT NOTICE6
P McMahon1
A Sutton
B Cox
J Farrell
H Garnett1
J Pegler2
D Smith3
P Taylor2
P Mansell4
S Charles4
P Dowd4
S Trott5
3/3
7/7
7/7
6/7
3/3
3/3
3/3
3/3
1/1
1/1
1/1
1/1
5/5
9/9
9/9
8/9
5/5
1/1
5/5
1/1
1/1
0/1
1/1
-
1/1
-
4/4
3/3
1/1
1/1
1/1
-
1/1
1/1
-
-
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Resigned as a Director 20 June 2015.
Resigned as a Director 13 April 2015.
Appointed as a Director 27 January 2015. Resigned as a Director 20 June 2015.
Appointed as a Director 26 October 2015.
Appointed as a Director 6 December 2015.
Number of meetings attended/maximum the Director could have attended.
2/2
-
-
-
2/2
2/2
-
-
-
-
-
-
1/1
1/1
-
-
1/1
-
-
-
-
-
-
-
Ms Sutton was invited to each Audit and Risk Committee meeting 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 2016 are shown
below:
ENERGY RESOURCES
OF AUSTRALIA LTD
ORDINARY SHARES
RIO TINTO LIMITED
ORDINARY SHARES
RIO TINTO LIMITED
OPTIONS IN
ORDINARY SHARES
RIO TINTO LIMITED
CONDITIONAL
INTERESTS IN
ORDINARY SHARES
-
42,500
-
-
-
-
-
-
-
-
-
-
11,537
7,823
5,399
-
26,777
6,331
23,039
35,948
3,500
-
1,744
2,355
2,888
-
8,111
-
3,666
-
-
5,312
-
-
-
-
9,350
-
45,624
-
37,328
-
-
16,426
-
-
-
24,510
DIRECTORS
A Sutton
P McMahon1
B Cox
H Garnett1
J Farrell
J Pegler2
D Smith3
P Taylor2
P Mansell4
S Charles4
P Dowd4
S Trott5
Note 1
Note 2
Note 3
Note 4
Note 5
Resigned as a Director 20 June 2015.
Resigned as a Director 13 April 2015.
Appointed as a Director 27 January 2015. Resigned as a Director 20 June 2015.
Appointed as a Director 26 October 2015.
Appointed as a Director 6 December 2015.
44
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Remuneration report
The Remuneration Report is set out under the following main
headings:
A.
B.
C.
D.
E.
F.
G.
Board oversight of remuneration
Principles used to determine non-executive Directors’
remuneration
Principles used to determine executive remuneration
Details of remuneration
Executive service agreements
Share based compensation
Additional information
The information provided in the Remuneration Report has been
audited by the Company’s independent auditor as required by
section 308(3C) of the Corporations Act 2001.
Board oversight of remuneration
A
The Remuneration Committee has responsibility to review:
•
remuneration framework and policies (including key
performance indicators) for the Company’s Chief Executive
and senior executives;
remuneration and performance of the Company’s Chief
Executive and senior executives;
remuneration of the Company’s non-executive Directors;
and
remuneration disclosures made by the Company.
•
•
•
The Remuneration Committee Charter is available at the
Corporate Governance section of ERA’s website.
B
Principles used to determine non-
executive Directors’ remuneration
Fees and payments to non-executive Directors reflect the
demands which are made on, and the responsibilities of, the non-
executive Directors. The Remuneration Committee reviews and
makes recommendations to the Board regarding non-executive
Directors’ remuneration. These fees are comprised of a base
fee and any fees payable to non-executive Directors for their
membership on established committees of the Board. ERA does
not pay retirement or post-employment benefits to non-executive
Directors, however, statutory superannuation contributions are
paid to non-executive Directors. In addition, from time to time,
the Board may approve that non-executive Directors receive
additional fees for services provided outside the established
committee processes.
The following principles are applied in determining the
remuneration of non-executive Directors:
•
the responsibilities of, and time spent by, the non-executive
Directors on the affairs of ERA, including preparation time;
acknowledgement of the personal risk borne as a Director;
comparison with professional market rates of remuneration
to remain competitive with the market having regard to
companies of similar size and complexity; and
the desire to attract Directors of a high calibre with
appropriate levels of expertise and experience.
•
•
•
At the 2008 Annual General Meeting, shareholders resolved
to amend the Constitution of the Company to provide that the
aggregate remuneration for non-executive Directors of ERA
would be not more than $800,000 per annum. At the 2015
Annual General Meeting, the 2014 Remuneration Report was
approved with 92.32 per cent of shares voted in favour (voting
comprised 363,749,929 votes ‘for’ the resolution and 30,240,884
votes ‘against’ the resolution). North Limited and Peko-Wallsend
Pty Ltd, which are both Rio Tinto entities, voted a combined total
of 354,078,854 votes ‘for’ the resolution. The aggregate amount
of non-executive Directors’ remuneration paid in 2015 was
approximately $535,000 inclusive of statutory superannuation.
The non-executive Directors’ fees were reviewed by the Board in
January 2015. The Board resolved that there would be a modest
increase in non-executive Directors’ fees in 2015. There was no
increase in committee fees. The annual fees for non-executive
Directors for 2015 (excluding superannuation) are as follows:
Chairman
Non-executive Director
Audit and Risk Committee
Chair*
Audit and Risk Committee
Member*
Remuneration Committee
Chair*
2015
$165,000
$92,000
2014
$162,000
$90,000
$20,000
$20,000
$13,000
$13,000
$5,000
$5,000
* Fees are payable in addition to Chairman and non-executive Director fees.
The Board has resolved that no additional committee fees are
payable to members of the Remuneration Committee (other than
the Remuneration Committee Chair).
C
Principles used to determine executive
remuneration
The Remuneration Committee is responsible for the review of,
and where appropriate will make recommendations to the Board
in respect of, executive remuneration.
The Corporations Act 2001 and relevant Accounting Standards
require disclosures in respect of “key management personnel”,
being those persons having authority and responsibility for
planning, directing and controlling the activities of the Company.
The key management personnel are, in addition to the Directors,
the permanent General Managers of the Company (including
the Chief Advisor Agreements) reporting directly to the Chief
Executive. Throughout this Remuneration Report the key
management personnel who are not Directors are collectively
referred to as “senior executives”.
45
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
As the Company is a member company of the Rio Tinto Group, it
generally implements the remuneration policies and procedures
determined by the Rio Tinto Remuneration Committee and
applied to senior management personnel across the wider Rio
Tinto Group to determine the remuneration of the Chief Executive
and senior executives.
components to the achievement of challenging individual and
business performance targets, and ensures the attraction,
motivation and retention of the high calibre senior executives
required to lead the Company.
The Company Secretary of the Company is subject to the same
executive remuneration pay and reward framework.
As a member of the Rio Tinto Group, ERA’s Chief Executive and
senior executives are seconded from Rio Tinto and are hence
drawn from the talented pool of executives in the wider Rio Tinto
Group. It is the view of the Remuneration Committee (which has
been endorsed by the Board) that a company of ERA’s size,
scope and remote location would have significant difficulty in
attracting executives of the calibre necessary to ensure superior
performance or in retaining them for significant periods if this
arrangement was not in place. Under these circumstances,
the Board believes that the general application of the Rio
Tinto remuneration framework to ERA’s Chief Executive and
senior executives, with appropriate review by the Company’s
Remuneration Committee, is of benefit to ERA.
For the purposes of assessing the appropriate level of
remuneration, the Australian resources sector is considered
the most relevant comparator group. Additional references are
also made to other relevant supplementary comparator groups.
Typically, base salaries are positioned at the median of these
comparator groups, while incentive plans are designed with the
potential to deliver total remuneration outcomes across the full
market range according to business and individual performance.
The related costs of these programmes are recognised in the
Company’s financial statements.
Executive remuneration, including base salary and short and long
term incentive plan awards, and other terms of employment are
reviewed annually having regard to the evaluation of individual
and business performance against goals set at the start of the
year, global economic conditions and relevant comparative
information. As well as base salary, remuneration packages may
include fringe benefits such as medical insurance, car, rent and
other allowances, superannuation, retirement entitlements and
short and long term incentives.
The annual performance evaluation and management process
includes formal consultation between the Chairman (based on
the Remuneration Committee’s review and recommendations)
and the Managing Director, Rio Tinto Diamonds, Salt and
Uranium regarding the Chief Executive of the Company, and
between the Remuneration Committee and the Chief Executive
of the Company regarding the senior executives.
An annual performance evaluation of the Chief Executive and
senior executives was undertaken in 2015.
The executive pay and reward framework is designed to provide
a total remuneration package which is competitive in the market;
aligns total remuneration with delivered individual and short
and long term business performance; strikes an appropriate
balance between fixed and variable components; links variable
46
The executive pay and reward framework has four components:
•
•
•
base salary and benefits;
short term incentive plans;
long term incentive plans through participation in the
Rio Tinto Performance Share Plan (PSP), Rio Tinto
Management Share Plan (MSP) and, in the case of the Chief
Executive, the ERA Long Term Incentive Plan (ERA LTIP);
and
other remuneration such as superannuation.
•
Performance and non-performance related
remuneration
Total remuneration is a combination of the fixed, performance and
service related elements described in this report. The short and long
term incentive plans (other than the Rio Tinto MSP) are the variable
components of the total remuneration package and are therefore “at
risk”. They are tied to achievement of specific business measures,
individual performance and service. The other components are
referred to as “fixed” as they are not at risk.
The long term incentive plans are designed to provide a target
expected value of between 22.5 and 45 per cent of base salary
for the senior executives and the Chief Executive, delivered in
any one year through a blend of PSP, MSP and, in the case of
the Chief Executive, ERA LTIP awards. In 2015, awards were
made under the MSP and ERA LTIP.
Excluding post employment and non-monetary benefits, the
proportion of total direct remuneration, assuming maximum
award levels and maximum levels of performance, provided by
way of variable at risk components as at 31 December 2015 for
the Chief Executive and senior executives was between 48 and
68 per cent. The actual proportion of total direct remuneration
provided by way of variable performance related components will
differ from these percentages depending on measured Company
and individual performance and the current blend of share plans.
Base salary
Base salary is set at a level consistent with market expectations
within the wider Rio Tinto remuneration framework and may
be delivered as a mix of cash and prescribed non-financial
benefits. It is targeted broadly at the median of companies of
similar size, global reach and complexity, including other large
natural resource companies. Base salary is reviewed annually
and adjusted taking into account the individual and Company
performance, global economic conditions, role responsibilities,
an assessment against comparator groups, internal relativities
and base salary budgets applying to the broader employee
population.
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Short term incentive plan
The short term incentive plan provides a bonus opportunity and is
designed to support the overall remuneration policy by focusing
management personnel on calendar year performance against
challenging individual and business targets.
Short term incentive performance conditions
Individual performance is reviewed against relevant targets and
objectives annually. The Chief Executive and senior executives
of the Company have between 40 and 70 per cent of their
performance based bonus based on business measures with the
remainder based on individual measures.
The short term incentive plan bonus payments disclosed in this
report are amounts paid in 2015 relating to performance in 2014,
as 2015 performance calculations are not finalised at the date
of this report. The Company’s business performance measures
for 2014 used in the determination of short term incentive plan
payments were:
•
Safety - ERA All Injury Frequency Rate and Lost Time
Injuries;
Financial - ERA net earnings and free cash flow; and
Business - ERA drummed production, cost of material milled,
volume and cost of material moved, Brine Concentrator
performance, Ranger 3 Deeps and progression of
rehabilitation of Pit 1 and Pit 3.
•
•
Bonus Deferral Plan
In 2015, 25 per cent of the Chief Executive’s (Ms Sutton) short
term incentive plan bonus pay was satisfied through the deferred
award of shares in Rio Tinto Limited under the terms of the Rio
Tinto Bonus Deferral Plan (BDP).
The same percentage will be satisfied in 2016 through the
deferred award of shares in Rio Tinto Limited under the terms of
the Rio Tinto BDP.
Long term incentive plans
In 2015, the Company’s Remuneration Committee considered
the application of the Rio Tinto long term incentive plan to
the Company’s Chief Executive and senior executives. As
previously outlined, the Remuneration Committee believes that
the general application of the Rio Tinto remuneration framework
(including the Rio Tinto long term incentive plans) to ERA’s Chief
Executive and senior executives with appropriate review by the
Remuneration Committee, is of benefit to the Company. As such
the Remuneration Committee recommended that the Company’s
long term incentive plans remain unchanged for 2015. During
2016, the Remuneration Committee will review the position for
future years.
Share based remuneration dependent on performance
Performance Share Plan
The Rio Tinto PSP provides a conditional right to Rio Tinto shares
to eligible senior management personnel within the Rio Tinto
Group, including the Chief Executive and senior executives of the
Company.
The conditional awards only vest if the performance condition
set by the Rio Tinto Remuneration Committee is satisfied by
Rio Tinto, although the Rio Tinto Remuneration Committee
retains discretion to satisfy itself that satisfaction of the
performance condition is a genuine reflection of the underlying
performance of the business. Prior to the vesting of conditional
awards, Rio Tinto’s Total Shareholder Return (TSR) performance
against the performance condition is calculated independently by
Willis Towers Watson.
Subject to Rio Tinto Remuneration Committee approval,
awards vest based on the Rio Tinto Group’s TSR performance
against the Morgan Stanley Capital World Index (one third)
and the Euromoney Global Mining Index (one third), along with
improvement in Rio Tinto EBIT margin (one third) relative to
global mining comparators. This is reviewed at 31 December
of the fifth year of the grant. The level of vesting depends on
performance against the indices.
If Rio Tinto was subject to a change of control or a company
restructuring, the conditional awards would only vest subject to
the satisfaction of the performance condition measured at the
time of the change of control or restructuring. Should this occur
within the first 36 months from date of grant of the award, the
number of shares that can vest will be reduced pro-rata over the
36 month period. The Rio Tinto Remuneration Committee has
discretion to adjust the performance condition to ensure a fair
measure of performance.
Rio Tinto releases awards to participants as either Rio Tinto
plc or Rio Tinto Limited shares. Awards may, upon vesting, be
satisfied by Rio Tinto through the transfer of treasury shares, the
issue of new shares or the purchase of shares in the market.
Chief Executive’s long term incentive plan
Consistent with the approach in 2014, in 2015 the Remuneration
Committee recommended that the Chief Executive’s long term
incentive award be delivered in Rio Tinto shares under the Rio
Tinto MSP and under the ERA Long Term Incentive Plan (ERA
LTIP). The Chief Executive is the only executive who participates
in this plan. The amount of the Chief Executive’s long term
incentive award that would otherwise have been provided under
the Rio Tinto PSP has been provided under the ERA LTIP.
The ERA LTIP is an award of rights that have a value calculated
by reference to the Company’s share price (ie phantom shares).
Whether or not the rights vest depends on the extent 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. For the
2015 award, the performance conditions will be measured over a
three year period (from 1 January 2015 to 31 December 2017).
47
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
DIRECTOR’S REPORT
The two performance conditions are a relative TSR condition and
the achievement of ERA strategic measures. Each 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’s relative performance
against other uranium producers and the achievement of ERA
strategic measures. The Board considers that this reflects the
appropriate mix of incentives to achieve an improvement in ERA’s
performance over the long term.
Share based remuneration not dependent on
performance
Management Share Plan
Under the Rio Tinto MSP, conditional grants of Rio Tinto shares
may be awarded to eligible employees of the Company which will
vest, wholly or partly, upon expiry of a three year vesting period.
Rio Tinto shares to satisfy the vesting are purchased by Rio Tinto
in the market. Award levels under the Rio Tinto MSP are at the
discretion of Rio Tinto.
For the TSR performance condition, rights vest based on ERA’s
TSR performance against Areva SA, Cameco Corp, Denison
Mines Corp, Energy Fuels Inc, Fission Uranium Corp, Paladin
Energy Limited, Summit Resources Limited, Uranium Energy
Corp and Ur-Energy Inc over the performance period. Vesting will
be subject to ERA’s ranked position using the following schedule:
In the case of a change of control, awards vest on the date of
the change of control, but the award may be reduced pro rata to
reflect the acceleration of vesting. Prior to the change of control,
and with the consent of the acquiring company, the shares can
be converted to shares in the acquirer. After a change of control,
this can only be achieved with the consent of the employee.
Other Share Plans
All employees of the Company may participate in Rio Tinto share
savings and share option plans applicable at particular locations.
Up to and including 2011, these include the Rio Tinto Limited
share savings plan for senior executives employed from the
Rio Tinto Limited group of companies and the Rio Tinto plc share
savings plan for senior executives employed from the Rio Tinto
plc group of companies. In 2012, the Rio Tinto Remuneration
Committee approved and implemented a new global employee
share purchase plan, myShare. The new plan is offered to eligible
employees. Under the plan, employees may acquire shares
up to the value of US$5,000 per year capped at 10 per cent of
their base salary. Each share purchased will be matched by the
Company providing the participant holds the shares and remains
employed at the end of the three year vesting period. Further
details are at Note 30 to the Financial Statements.
Share dealing policy
The participation of the Chief Executive and senior executives
in the Rio Tinto share plans involving the awarding of Rio Tinto
securities at a future date, and any grants of shares and options
under these plans, is subject to and conditional upon compliance
with the terms of the ‘Rules for dealing in securities of Rio Tinto’
(“Rules for dealing”). The Rules for dealing expressly prohibit the
limiting of exposure to economic risk in relation to such securities,
and are available on the Rio Tinto website at www.riotinto.com.
Equal or greater to 2nd
ranked company
Between the 5th and 2nd
ranked companies
Above the 6th ranked
company
100 per cent of the rights
subject to the TSR condition
vest
Between 22.5 per cent and 100
per cent of the rights subject to
the TSR condition vest, on a pro
rata basis
22.5 per cent of the rights
subject to the TSR condition
vest
Equal to the 6th ranked
company or below
Nil vesting
For the ERA strategic measures, an assessment of the level of
vesting applicable to this portion of the award is to be assessed
by the Remuneration Committee, with the final outcome to be
recommended to the Board by the Chairman at the end of the
three year performance period. The elements to be considered in
respect of ERA strategic measures include financial performance,
organisational and personnel related performance, relations with
stakeholders and progress in respect of the Ranger 3 Deeps
underground mine project. For outstanding performance, the
Board may determine to permit a number of rights to vest that is
equal to 150 per cent of the initial number of rights awarded that
were subject to ERA strategic measures condition.
Upon vesting, the value of the ERA LTIP award will be converted
into Rio Tinto MSP shares. The number of Rio Tinto MSP shares
to be awarded will be calculated based on the five day average
Rio Tinto Limited share price prior to the Rio Tinto MSP grant
date in March of the year of vesting. Any Rio Tinto MSP shares
provided will vest after a further two year period in February
2020. There are no further performance conditions, however, the
Rio Tinto MSP shares can be forfeited in certain circumstances
related to cessation of employment.
48
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Details of remuneration
D
Details of the remuneration of each non-executive and executive Director and each of the senior executives 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 McMahon1
B Cox2
H Garnett1
J Farrell2
J Pegler3
D Smith4
P Taylor2,3
H Newell2,5
P Mansell6
S Charles6
P Dowd6
S Trott2,7
Total 2015
Total 2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2015
2014
2014
2015
2015
2015
2015
89
175
92
9
56
110
92
50
31
108
46
26
90
40
31
17
17
6
503
582
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8
16
-
-
5
10
-
-
3
10
4
-
-
-
6
3
3
-
32
36
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Resigned as a Director 20 June 2015.
Amounts paid directly to Rio Tinto Limited.
Resigned as a Director 13 April 2015.
Appointed as a Director 27 January 2015. Resigned as a Director on 20 June 2015.
Resigned as a Director 11 June 2014.
Appointed as a Director 26 October 2015.
Appointed as a Director 6 December 2015.
97
191
92
9
61
120
92
50
34
118
50
26
90
40
37
20
20
6
535
618
49
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Executive Director and senior executives
Set out below is an overview of the remuneration paid to the
executive Director and senior executives in 2015. This includes
details of the key elements of remuneration and a summary of
total remuneration for 2015.
STIP outcomes
Ms Sutton’s achievement against her 2014 personal objectives
was assessed as ‘good’. Detailed outcomes are below:
•
Safety performance deteriorated in 2014 with an increase in
the All Injury Frequency Rate to 1.27 (2013: 0.91)
•
•
• Work programme completed for the restart of the Ranger
processing plant to the satisfaction of the regulators and
Board requirements
ERA produced 1,165 tonnes of uranium oxide following the
restart of processing operations and sold 3,148 tonnes of
uranium oxide
The Ranger rehabilitation programme progressed to
schedule, including Pit 1 capping and Pit 3 stage 1 backfill
ERA achieved its target of $150 million in cost reductions set
in 2011 and continued strong cash management focus
The Ranger 3 Deeps Exploration Decline was completed on
schedule and budget
The Ranger 3 Deeps Prefeasibility Study was substantially
completed on schedule and budget
Brine Concentrator commissioning and optimisation
continued in 2014
•
•
•
•
LTIP awards granted
Award levels are set so as to incentivise executives to provide
sufficient retention for the executive team and to contribute to the
competitiveness of the overall remuneration package. The value
of the awards granted to Ms Sutton in 2015, based on the fair
value calculations performed by individual advisors, was 45 per
cent of base salary. The eventual value of the award will depend
on performance during the period 2015 to 2017.
Andrea Sutton
(Chief Executive from 23 September 2013)
Base salary
Ms Sutton was appointed as Chief Executive and Managing
Director on 23 September 2013. Ms Sutton’s base salary is
reviewed annually with reference to the underlying performance
of ERA, the Rio Tinto Group and Ms Sutton, global economic
conditions, role responsibility, an assessment against relevant
comparator groups, internal relativities and base salary budgets
applying to the broader employee population.
On 1 March 2015, Ms Sutton’s base salary was $400,402.
STIP objectives
The STIP cash payment made to Ms Sutton in 2015 was
determined by assessing individual and business performance in
2014 against objectives set for that year.
The following individual objectives were set for Ms Sutton for
2014:
•
Completion of the work programmes required by regulators
and the ERA Board to achieve a safe restart of the Ranger
processing plant within the agreed timeframes
Execution of the water management strategy, including
progress of the tailings and brine management system,
capping of Pit 1 and finalisation of Pit 3 stage 1 backfill and
infrastructure implementation to schedule and budget
Ranger 3 Deeps Prefeasibility Study development and
submission of the Ranger 3 Deeps Draft Environmental
Impact Statement
Develop and implement optimisation strategy for the Brine
Concentrator
•
•
•
• Management of cash flow and implementation of continued
•
cash management controls
Establish an ongoing independent review of operational
safety and environmental risks
50
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Total remuneration
The table below provides a summary of Ms Sutton’s total remuneration disclosed for 2014 and 2015. The purpose of this table is to
enable shareholders to better understand the actual remuneration received and to provide an overview of the actual outcomes of the
Company’s remuneration arrangements. The remuneration details set out on page 54 include theoretical accounting values relating to
various parts of the remuneration packages, most notably long term incentive plan arrangements. Accordingly, the numbers below are
not compatible with those in the table on page 54.
(STATED IN $’000)
Base salary paid1
STIP cash bonus2
STIP deferred shares3
LTIP share based payments
Superannuation
Other benefits4
Total remuneration
% change from previous year
% of maximum STIP cash bonus awarded
% of maximum STIP cash bonus forfeited
Note 1
Note 2
Note 3
Note 4
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.
2015
2014
399
136
45
223
143
84
1,030
9
46
54
389
175
57
143
98
84
946
-
61
39
Senior executives
Base salary
Base salaries are reviewed annually, with reference to the underlying performance of ERA, the Rio Tinto Group and the individual,
global economic conditions, role responsibility, an assessment against relevant comparator groups and base salary budgets applying
to the broader employee population.
At the end of 2014 and 2015, the base salaries of the Company’s senior executives were:
BASE SALARY A’$000 (UNLESS OTHERWISE SPECIFIED)
2015
2014
CHANGE
Tim Eckersley
James May
Greg Sinclair1
Steeve Thibeault2
Alan Tietzel
Note 1
Note 2
Employment with ERA ceased on 1 March 2015. Salary is reflected at time of resignation.
Employment with ERA ceased on 30 May 2014. Salary is reflected at time of resignation.
322
240
297
-
355
315
235
297
316
349
2%
2%
-
-
2%
51
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
STIP objectives and outcomes
The individual objectives set out below relate to the 2014 financial year (with the corresponding Short Term Incentive Payment paid in
2015).
SUMMARY OF INDIVIDUAL OBJECTIVES
•
•
•
•
•
•
•
•
•
Prevention of high consequence safety and environmental events
Demonstrate Health, Safety and Environment leadership
Business Transformation – workforce transformation and on boarding major projects
Cash reduction and preservation for Ranger operations
Productivity maximisation and improvement for Ranger operations
Safe delivery of uranium oxide production targets (pro-rated to mill restart date)
Completion of Pit 1 pre-load and Pit 3 stage 1 backfill
Embed brine concentrator into Ranger operations
Leadership and engagement – develop effective stakeholder relationships
Prevention of high consequence safety and environmental events
Demonstrate Health, Safety and Environment leadership
Achieve accounting and reporting excellence in all material respects
Drive and deliver cash generation and cost improvement opportunities for ERA
•
•
•
•
• Manage treasury processes and financing risks for the business
•
•
•
Deliver best practice procurement service to ERA
Support major investment decisions through high quality project evaluation
Demonstrable leadership on ERA finance matters internally and externally
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Prevention of high consequence safety and environmental events
Demonstrate Health, Safety and Environment leadership
Deliver the objectives of the Ranger 3 Deeps Prefeasibility Study
Implement the Tailings and Brine Management Project
Implement the Pit 1 Rehabilitation Project
Implement progressive rehabilitation programme and continue to engage stakeholders in
relation to closure criteria
Safely execute the surface exploration programme to target high grade deposits on the Ranger
Project Area and ensure compliance with the JORC Code in regard to the reporting of reserves
and resources
Deliver the agreed cost reduction targets as part of ongoing business improvement initiatives
Prevention of high consequence safety and environmental events
Demonstrate Health, Safety and Environment leadership
Progress implementation of commitments and opportunities in the Ranger Mining Agreement
Develop long term engagement and negotiation strategy for strategic growth and tenure
extension
Cash management – ensure outcomes of strategic project negotiations have regard to cost
impacts
Secure Traditional Owner support for a Ranger 3 Deeps underground mine
Undertake, support and provide guidance on Government Relations matters
Tim Eckersley
James May
Greg Sinclair
Alan Tietzel
52
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
A summary of the individual targets and performance for each of the Company’s senior executives (other than the Chief Executive) for
the 2014 financial year (with the corresponding Short Term Incentive Payment paid in 2015) is set out in the table below.
MEASURES
Tim Eckersley
Financial performance
Business performance
Health and Safety
Individual
Total
James May
Financial performance
Business performance
Health and Safety
Individual
Total
Greg Sinclair
Financial performance
Business performance
Health and Safety
Individual
Total
Alan Tietzel
Financial performance
Business performance
Health and Safety
Individual
Total
WEIGHT (%)
SCORE (OUT
OF 200%)
WEIGHTED
SCORE (%)
10.0
15.0
15.0
60.0
100.0
10.0
15.0
15.0
60.0
100.0
10.0
15.0
15.0
60.0
100.0
10.0
15.0
15.0
60.0
100.0
143.6
69.1
0.0
108.0
-
143.6
69.1
0.0
108.0
-
143.6
69.1
0.0
93.0
-
143.6
69.1
0.0
100.0
-
14.4
10.4
0.0
64.8
89.6
14.4
10.4
0.0
64.8
89.6
14.4
10.4
0.0
55.8
80.6
14.4
10.4
0.0
60.0
84.8
LTIP awards
Award levels are set so as to incentivise executives to provide sufficient retention for the executive team and to contribute to the
competitiveness of the overall remuneration package. The value of the awards granted in 2015, based on the fair value calculations
performed by independent advisors, was between 22.5 per cent and 30 per cent of base salary.
53
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Executive Director and senior executives total remuneration
SHORT TERM BENEFITS
CASH
SALARY
($000)
CASH
BONUS8
($000)
OTHER7
($000)
TERMINATION
PAYMENTS
($000)
POST
EMPLOY-
MENT
BENEFITS
SUPER-
ANNUA-
TION
PENSION
($000)
SHARE
BASED
PAY-
MENTS7
CASH &
EQUITY
SETTLED
($000)
Executive Director
A Sutton1
Senior executives
T Eckersley2
J May3
G Sinclair4
A Tietzel6
S Thibeault5
Total 2015
Total 2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2014
399
389
364
360
239
137
49
296
396
397
131
1,447
1,710
136
175
85
117
53
-
-
89
89
122
94
363
597
84
84
32
33
75
38
6
38
46
38
31
243
262
-
-
-
-
-
-
-
-
-
-
-
-
-
143
98
70
72
51
27
10
66
35
30
34
309
327
223
169
100
88
39
17
11
63
112
107
34
485
478
TOTAL
($000)
985
915
651
670
457
219
76
552
678
694
324
2,847
3,374
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Performance related cash bonus: 46 per cent awarded in 2015, 54 per cent forfeited, 61 per cent awarded in 2014, 39 per cent forfeited.
Performance related cash bonus: 45 per cent awarded in 2015, 55 per cent forfeited. 64 per cent awarded in 2014, 36 per cent forfeited.
Performance related cash bonus: 45 per cent awarded in 2015, 55 per cent forfeited. No cash bonus is disclosed for 2014 as payments were made
in respect to services rendered to another Rio Tinto entity in 2013.
Salary paid in financial year from 1 January 2015 to 1 March 2015. No cash bonus was paid in respect to services rendered to ERA during the year,
62 per cent awarded in 2014, 38 per cent forfeited.
Salary paid in financial year from 1 January 2014 to 30 May 2014. Performance related cash bonus: 60 per cent awarded in 2014, 40 per cent forfeited.
Performance related cash bonus: 42 per cent awarded in 2015, 58 per cent forfeited, 60 per cent awarded in 2014, 40 per cent forfeited.
Other benefits includes relocation, accommodation, travel, vehicle and other allowances excluding cash paid site allowances which are treated as cash salary.
Performance related bonuses paid in 2015 relate to services in 2014 (equally bonuses paid in 2014 relate to services in 2013).
The value of share based awards has been determined in accordance with the recognition and measurement requirements of AASB2
“Share-based Payment”. The fair value of awards granted under the Rio Tinto Management Share Plan (MSP), Bonus Deferral Plan
(BDP), Performance Share Plan (PSP) and Share Savings Plan (SSP) has been calculated at their dates of grant using valuation
models provided by external consultants Lane Clark and Peacock LLP, including an independent lattice-based option valuation model
and a Monte Carlo valuation model which takes into account the constraints on vesting and exercise attached to these awards.
The fair value of awards granted under the ERA Long Term Incentive Plan (ERA LTIP) has been calculated at their date of grant using
a valuation model provided by external consultant Ernst & Young.
54
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Executive service agreements
E
Remuneration and other terms of employment for the Chief Executive and senior executives are formalised in service agreements.
These agreements provide for participation in the Rio Tinto short and long term incentive plans upon achieving performance and
service goals. The agreements may also provide for other benefits, including: medical insurance, vehicle and accommodation
allowances, relocation allowances and expenses and travel allowances.
The Chief Executive and senior executives will also be entitled to a range of pre-existing redundancy entitlements, depending on the
business and region from where they were originally employed within the Rio Tinto Group. These include:
•
•
•
•
•
•
•
notice may be worked or fully or partly paid in lieu, at ERA’s discretion;
additional capped service related payments may apply;
pro rata short term incentive plan payments may be paid based on the proportion of the performance period worked;
conditional share awards granted and held for less than three years at the date of termination are reduced pro-rata;
share options or conditional share awards held for less than 12 months at date of termination may be reduced pro-rata;
there is no contractual entitlement to payments in the event of a change of control; and
other major provisions of the agreements relating to remuneration as set out below.
A Sutton - Chief Executive
Term of agreement - Open, commenced 23 September 2013
Base salary (excluding superannuation, allowances and other benefits) as at 31 December 2015 of $400,402 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 100 per cent of base salary. Base salary and short term incentive
targets are to be reviewed annually. Termination by the employee is three months’ notice in writing or by the employer giving six
months’ notice or equivalent payment in lieu of notice.
In addition to Ms Sutton’s service agreement, ERA has entered into a secondment agreement with Rio Tinto in relation to Ms Sutton’s
services to ERA. The secondment agreement provides that ERA can end Ms Sutton’s secondment by giving Rio Tinto six months’
notice at any time. Rio Tinto can end Ms Sutton’s secondment by giving six months’ notice to ERA, provided such notice can be given
no earlier than 23 March 2016.
T Eckersley - General Manager Operations
Term of agreement - Open, commenced 10 September 2012
Base salary (excluding superannuation, allowances and other benefits) as at 31 December 2015 of $321,946 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 60 per cent of base salary. Base salary and short term incentive
targets to be reviewed annually. Termination by the employee is three months’ notice in writing or by the employer giving six months’
notice or equivalent payment in lieu of notice.
J May - Chief Financial Officer
Term of agreement - Open, commenced 5 May 2014
Base salary (excluding superannuation, allowances and other benefits) as at 31 December 2015 of $240,311 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 50 per cent of base salary. Base salary and short term incentive
targets to be reviewed annually. Termination by the employee is three months’ notice in writing or by the employer giving six months’
notice or equivalent payment in lieu of notice.
G Sinclair - General Manager Technical Projects
Term of agreement - commenced 1 May 2007 and resigned 1 March 2015
Base salary (excluding superannuation, allowances and other benefits) as at 1 March 2015 of $297,000 per annum. Maximum short
term incentive bonus upon meeting performance criteria is 50 per cent of base salary. Base salary and short term incentive targets to
be reviewed annually. Termination by the employee is one month notice in writing or by the employer giving three months’ notice or
equivalent payment in lieu of notice.
55
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
A Tietzel - Chief Advisor Agreements
Term of agreement - Open, commenced 1 October 2010
Base salary (excluding superannuation, allowances and other benefits) as at 31 December 2015 of $354,860 per annum. Maximum
short term incentive bonus upon meeting performance criteria is 60 per cent of base salary. Base salary and short term incentive
targets to be reviewed annually. Termination by the employee is three months’ notice in writing or by the employer giving six months’
notice or equivalent payment in lieu of notice.
S Thibeault - Chief Financial Officer
Term of agreement - commenced 1 December 2012 and resigned 30 May 2014
Base salary (excluding superannuation, allowances and other benefits) as at 30 May 2014 of $316,000 per annum. Maximum short
term incentive bonus upon meeting performance criteria is 50 per cent of base salary. Base salary and short term incentive targets
to be reviewed annually. Termination by the employee is three months’ notice in writing or by the employer giving six months’ notice
or equivalent payment in lieu of notice. Mr Thibeault commenced employment with the Company in July 2009 but entered into a new
service agreement on 1 December 2012.
F
Share based compensation
Rio Tinto Share Option Plan
In 2013 the Rio Tinto Share Option Plan was discontinued. Details of the costs of the share based payment plans applied by the
Company are provided at Note 30 of the Financial Statements.
The terms and conditions of each grant of options affecting remuneration in this or future reporting periods are as follows:
GRANT DATE
Rio Tinto Limited
7/03/2006
17/03/2009
EXERCISE
PRICE
(PRE RIGHTS
ISSUE)
EXERCISE
PRICE
(POST RIGHTS
ISSUE)
VALUE PER
OPTION AT
GRANT DATE
VALUE PER
OPTION
POST RIGHTS
ISSUE
$
71.06
49.56
$
54.95
33.45
$
17.09
13.36
$
17.09
13.36
EXPIRY
DATE
7/03/2016
17/03/2019
EARLIEST
EXERCISE
DATE
7/03/2009
17/03/2012
Rio Tinto Performance Share Plan
Share awards under the Rio Tinto Performance Share Plan (PSP) are granted at the discretion of the Rio Tinto Remuneration
Committee in line with Rio Tinto guidelines. In 2013 the PSP was revised, and as a transitional provision, 50 per cent potentially vest
after four years and 50 per cent potentially vest after five years. No PSP was granted as remuneration during 2015. The terms and
conditions of each right to Rio Tinto Limited or Rio Tinto plc shares affecting remuneration in this or future reporting periods are as
follows:
AWARD DATE
Rio Tinto Limited
19 March 2012
27 May 2013
27 May 2013
MARKET PRICE AT AWARD
PERFORMANCE PERIOD
ENDS1
MARKET PRICE AT
31 DECEMBER 2015
$65.85
$53.11
$53.11
31 December 2015
31 December 2016
31 December 2017
$44.71
$44.71
$44.71
Note 1
Vesting dependent upon continued employment with a Rio Tinto Group company.
56
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Rio Tinto Management Share Plan
Share awards under the Rio Tinto Management Share Plan (MSP) are granted at the discretion of the Rio Tinto Remuneration
Committee in line with Rio Tinto guidelines. The terms and conditions of each right to Rio Tinto Limited or Rio Tinto plc shares
affecting remuneration in this or future reporting periods are as follows:
AWARD DATE
Rio Tinto Limited
27 May 2013
17 March 2014
23 March 2015
MARKET PRICE
AT AWARD
PERFORMANCE PERIOD
ENDS1
PRICE AT
31 DECEMBER 2015
$53.11
$60.28
$54.02
31 December 2015
31 December 2016
31 December 2017
$44.71
$44.71
$44.71
Note 1
Vesting dependent upon continued employment with a Rio Tinto Group company.
Rio Tinto Bonus Deferral Plan
Share awards under the Rio Tinto Bonus Deferral Plan are granted at the discretion of the Rio Tinto Remuneration Committee in line
with Rio Tinto guidelines. The terms and conditions of each right to Rio Tinto Limited shares affecting remuneration in this or future
reporting periods are as follows:
AWARD DATE
Rio Tinto Limited
27 May 2013
17 March 2014
23 March 2015
MARKET PRICE AT AWARD
VESTING DATE1
PRICE AT
31 DECEMBER 2015
$53.11
$60.28
$54.02
100% 1 December 2015
100% 1 December 2016
100% 1 December 2017
$44.71
$44.71
$44.71
Note 1
Vesting dependent upon continued employment with a Rio Tinto Group company.
Share based compensation – Rio Tinto employee share schemes
The key management personnel of the Company who elected to participate in Rio Tinto employee share schemes as at 31 December
2015 are set out below:
P Taylor
J Farrell
B Cox
T Eckersley
A Tietzel
S Trott
Rio Tinto myShare Savings Plan
Rio Tinto myShare Savings Plan
Rio Tinto myShare Savings Plan
Rio Tinto Share Savings Plan
Rio Tinto myShare Savings Plan
Rio Tinto myShare Savings Plan
Rio Tinto myShare Savings Plan
57
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Equity instrument disclosures relating to key management personnel
Options provided as remuneration
Details of options over ordinary shares in Rio Tinto Limited and Rio Tinto plc held during the year and provided as remuneration to key
management personnel in respect of their service to ERA (or, in the case of non-executive Directors, to Rio Tinto) are set out below.
When exercisable, each option is convertible into one ordinary share of Rio Tinto Limited or Rio Tinto plc.
BALANCE AT
START OF
THE YEAR OR
ON JOINING1
2014
1,186
BALANCE AT END
OF THE YEAR3
GRANTED
AS REMUN-
ERATION
EXERCISED
DURING THE
YEAR
OTHER
CHANGES2
VESTED &
EXER-
CISABLE
UNVESTED
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,487)
(2,031)
(2,025)
(4,424)
-
-
(314)
-
-
-
-
-
-
-
-
-
-
-
1,186
2,888
2,888
2,008
2,008
5,312
7,343
3,666
8,090
8,111
8,111
-
-
-
-
-
-
-
-
-
-
2,888
2,888
2,008
4,495
7,343
9,368
8,090
8,090
8,111
8,425
Rio Tinto plc
Senior executives
S Thibeault
Rio Tinto Limited
Executive Director
A Sutton
Senior executives
A Tietzel
2015
2014
2015
2014
Non-executive Directors4
P Taylor
J Farrell
B Cox
2015
2014
2015
2014
2015
2014
Note 1
Note 2
Note 3
Note 4
Where a key management personnel joined during the year, balance at start of the year reflects holdings at time of commencement with ERA.
Other changes and end of year balance include changes made in relation to awards for service within the wider Rio Tinto Group, including before joining or after ceasing
with ERA, and forfeited options where conditions were not met.
Where a key management personnel left prior to the end of the year, the balance reflects the holding at the time of resignation.
Changes to balances for non-executive Directors do not relate to remuneration for services provided to the Company.
58
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Conditional awards provided as remuneration
Performance Share Plan; Management Share Plan; Bonus Deferral Plan
No conditional awards of ordinary shares of either ERA or of Rio Tinto Limited or Rio Tinto plc were provided during the year as
remuneration for services provided to ERA to any of the non-executive Directors. Details of conditional awards of ordinary shares in
Rio Tinto Limited and Rio Tinto plc held during the year and provided as remuneration to the Chief Executive and senior executives of
ERA in respect of their duties as officers of ERA are set out below. When exercisable, each award converts into one ordinary share of
Rio Tinto Limited or Rio Tinto plc.
BALANCE
AT START
OF THE
YEAR OR
ON JOINING1
GRANTED
AS REMU-
NERATION VESTED LAPSED
AWARDS
CAN-
CELLED
OTHER
CHANGES2
BALANCE
AT END
OF YEAR3
2014
2,039
78
(1,568)
2015
2014
2015
2014
2015
2014
2015
2014
2014
2015
2014
2015
2014
2014
2015
2014
2015
2014
2015
9,630
8,953
5,371
4,795
1,799
1,799
3,542
3,576
2,845
6,417
6,498
14,000
13,926
13,482
31,017
32,374
41,484
42,849
24,473
2,427
(2,561)
2,438
(1,564)
1,619
(1,078)
1,581
1,224
-
-
(899)
(656)
-
(267)
1,128
(1,033)
1,486
-
1,798
(1,514)
1,770
(1,644)
-
-
-
-
-
-
-
-
(3,038)
(4,069)
(1,188)
(7,541)
(1,515)
(10,848)
(1,479)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(144)
(146)
(197)
(87)
(107)
-
-
(97)
(129)
-
(153)
(207)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
405
9,350
9,630
5,825
5,371
2,367
1,799
3,178
3,542
4,331
6,548
6,417
5,464
4,143
16,426
14,000
10,688
22,982
13,815
37,291
158
31,017
14,988
45,624
114
41,484
-
24,473
Rio Tinto plc
Senior executives
S Thibeault
Rio Tinto Limited
Executive Director
A Sutton
Senior executives
T Eckersley
J May
G Sinclair
S Thibeault
A Tietzel
Non-executive Directors4
P Taylor
H Newell
J Farrell
B Cox
S Trott
Note 1
Note 2
Note 3
Note 4
Where a key management personnel joined during the year, balance at start of the year reflects holdings at time of commencement with ERA.
Other changes and end of year balance include changes made in relation to awards for service within the wider Rio Tinto Group, including before joining or after
ceasing with ERA, and Rio Tinto Rights Issue adjustments to accrued balances.
When a key management personnel left prior to the end of the year, the balance reflects holdings at the date of resignation.
Changes to balances for non-executive Directors do not relate to remuneration for services provided to ERA.
ERA Long Term Incentive Plan
In addition to the conditional awards set out above, as at 31 December 2015, Ms Sutton had been awarded a cumulative total of
223,528 rights (31 December 2014 balance: 129,837 rights) that have a value calculated by reference to the Company’s share price
(i.e. phantom shares). These awards have a three year performance period and, upon vesting, will be converted into Rio Tinto MSP
shares based on the five day average Rio Tinto Limited share price prior to the Rio Tinto MSP grant date in March of the year of
vesting. Any Rio Tinto MSP shares provided will vest after a further two year period. Further details of the ERA LTIP are available on
pages 47 and 48.
59
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Shareholdings
The number of shares held in ERA or Rio Tinto Limited during the financial year by each Director of ERA are set out below.
Energy Resources of Australia Ltd
P McMahon
Rio Tinto Limited
P McMahon
A Sutton
P Taylor
J Pegler
J Farrell
B Cox
D Smith
P Mansell
P Dowd
S Trott
BALANCE
AT START OF
THE YEAR1
INCREASED
DURING THE
YEAR
OTHER
CHANGES
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR2
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2015
2015
2015
42,500
42,500
18,405
18,405
9,211
8,895
33,804
28,121
6,331
6,331
19,404
19,131
5,395
5,395
33,078
3,137
1,744
2,318
-
-
-
-
3,170
1,880
4,601
5,683
-
-
12,077
1,788
9,571
1,476
65
363
-
-
-
-
(10,582)
-
(844)
(1,564)
(2,457)
-
-
-
(4,740)
(1,515)
(9,567)
(1,476)
(10,104)
-
-
-
42,500
42,500
7,823
18,405
11,537
9,211
35,948
33,804
6,331
6,331
26,741
19,404
5,399
5,395
23,039
3,500
1,744
2,318
Note 1
Note 2
Where a Director was appointed during the year, balance reflects holdings at the time of commencement with the Company.
Where a Director resigned during the year, balance reflects holdings at time of resignation as a Director of the Company.
Additional information
G
Further details relating to options
Value of options exercised during the year
2015
2014
VALUE OF
OPTIONS
EXERCISED
DURING THE
YEAR
MARKET PRICE
AT DATE OF
EXERCISE
-
$66,199
-
$58.78
Loans and other transactions with Directors and other key management personnel
There are no loans with Directors and other key management personnel. Other transactions with Director related entities are disclosed
in Note 24 – Related parties.
60
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Principal activities
The principal activities of the Company during the course of the
year consisted of the mining, processing and sale of uranium
oxide.
Dividends
No dividends have been paid by ERA to members in respect of
the 2015 financial year (2014: nil).
Operating and financial review
Details of ERA’s review and results of operations are included
in the Chairman’s Report on page 4 the Chief Executive’s Report
on page 5 and the Operating and Financial Review section on
page 7.
Significant changes to the state of affairs
In the opinion of the Directors, other than matters reported in
the Directors’ Report, the Chairman’s Report and the Chief
Executive’s Report, there were no significant changes in the state
of affairs of the Company during the year ended 31 December
2015.
Matters subsequent to the end of the financial
year
There has not arisen in the interval between the end of the year
and the date of this report any item, transaction or event of a
material nature that has significantly affected or may significantly
affect:
(i)
(ii)
(iii)
the operations of the Company;
the results of those operations; or
the state of affairs of the Company subsequent
to the financial year ended 31 December 2015.
Likely developments
In the opinion of the Directors, any likely developments in the
operations of the Company known at the date of this report have
been covered within the Annual Report and Notes to the financial
statements.
A general review of developments for ERA is presented in the
Operating and Financial Review section on page 7.
Annual General Meeting
The 2016 Annual General Meeting will be held on 4 May 2016 in
Darwin, in the Northern Territory of Australia. Notices of the 2016
Annual General Meeting will be set out in separate letters to the
shareholders of the Company.
Indemnification
Clause 11 of the Company’s constitution provides that every
Director, manager, officer or employee of the Company shall be
indemnified out of the funds of the Company against all liability
incurred by them in defending any proceedings in which they are
successful.
The Corporations Act 2001 prohibits a company from
indemnifying Directors, secretaries, executive officers and
auditors from liability except for liability to a party, other than the
Company or a related body corporate, where the liability does not
arise out of conduct involving a lack of good faith and except for
liability for costs and expenses incurred in defending proceedings
in which the officer or auditor is successful. An indemnity for
officers or employees who are not Directors, secretaries or
executive officers, is not expressly prohibited by the Corporations
Act 2001.
The Directors and Company Secretary of the Company, and all
former Directors and Company Secretaries, have the benefit of
the indemnity in Clause 11 of the Company’s constitution.
The indemnity also applies to executive officers of the Company
(being the senior executives and managers who are concerned
with, or take part in the management of the Company) as well as
other employees.
Insurance
Since the end of the previous financial year, the Company has
paid insurance premiums in respect of a Directors’ and officers’
liability policy of insurance.
The policy indemnifies all Directors and officers of ERA and its
controlled entities (including the Directors, Company Secretaries,
and executive officers referred to above) against certain liabilities.
In accordance with common commercial practice, the insurance
policy prohibits disclosure of the nature of the liability insured
against and the amount of the premium.
Environmental regulation and policy
ERA strives to be at the forefront of environmental management
in the uranium industry. It operates in accordance with relevant
Commonwealth and Northern Territory environmental legislation
as well as site specific environmental licences, permits and
statutory authorisations. ERA’s environmental management
system is ISO14001 compliant.
ERA is required to report any incident that is a divergence from
strict compliance with statutory requirements, even if the incident
has no detrimental environmental impact, and reports are made
to the Department of Mines and Energy (Northern Territory); the
Supervising Scientist Branch of the Commonwealth Department
of Environment; the Northern Land Council; the Commonwealth
Department of Industry, Innovation and Science and the
Gundjeihmi Aboriginal Corporation (representatives of the Mirarr
Traditional Owners).
ERA’s commitment to protect the environment in 2015 was
overseen by the Supervising Scientist Branch, which conducts
extensive monitoring and research programs on the Ranger
Project Area and Jabiluka Mineral Lease.
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ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
There were no prosecutions commenced or fines incurred in
respect of ERA’s environmental performance during 2015. The
environment remained protected through the period. Further
details of ERA’s environmental performance are included in the
Environment section of the Annual Report on page 28.
Corporate governance
The Board of ERA considers high standards of corporate
governance to be critical to business integrity and performance.
The corporate governance structures and practices in place
at ERA are substantially in compliance with the 3rd Edition of
the Corporate Governance Principles and Recommendations
developed by the ASX Corporate Governance Council
(“Council”).
Areas where the corporate governance practices of ERA do not
follow the Council’s recommendations arise due to Rio Tinto’s
68.4 per cent ownership of the Company and the management
direction, services and support this provides. The extent to
which the Company does not comply is detailed in the Corporate
Governance Statement on pages 64 to 70.
The Board of Directors has considered the position and, in
accordance with the advice received from the Audit and Risk
Committee, is satisfied that the provision of non-audit services
is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. All non-audit
services are reviewed by the Audit and Risk Committee to
ensure they do not impact on the impartiality and objectivity of
the auditors and do not undermine the general principles relating
to auditors’ independence as set out in Professional Statement
F1, including reviewing or auditing the auditors’ own work,
acting in a management or decision making capacity for the
Company, acting as advocate for the Company or jointly sharing
economic risks and rewards. Accordingly, the Directors have
satisfied themselves that the provision of non-audit services by
the auditors does not compromise the auditor independence
requirements of the Corporations Act 2001.
During the year, the following fees were paid or payable for
services provided by the auditors of the Company, its related
practices and non-audit related firms.
Rounding of amounts
The Company is of a kind referred to in ASIC Class Order
98/0100 and in accordance with that Class Order amounts in the
financial statements and Directors’ Report have been rounded to
the nearest thousand dollars, unless otherwise indicated.
AUDIT SERVICES
PricewaterhouseCoopers Australia
Audit and review of financial reports
Audit and review of financial reports
2015
$000
2014
$000
345
108
453
-
100
553
310
40
350
-
-
350
(additional 2014 fees)
Total remuneration for audit
services
Taxation services
Audit related services
Total Remuneration
Information on Auditor
PricewaterhouseCoopers continues in office in accordance with
Section 327 of the Corporations Act 2001.
A copy of the auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 is set out on
page 63.
Signed at Perth this 10 February 2016 in accordance with a
resolution of the Directors.
Auditors
PricewaterhouseCoopers 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. Each of the Directors at
the time this report was approved has confirmed that:
•
•
so far as he or she is aware, there is no relevant audit
information (ie information needed by the auditors in
connection with preparing their report) of which the auditors
are unaware; and
he or she has taken all steps that they ought to have taken
as a Director in order to make himself or herself aware
of any relevant audit information and to establish that the
auditors are aware of that information.
Non audit services
The Company may decide to employ the auditors on assignments
additional to their statutory audit duties where the auditor’s
expertise and experience with the Company are important.
Details of the amount paid or payable to the auditors for audit
services are set out below.
P Mansell
Director
Perth
10 February 2016
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ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
AUDITOR’S INDEPENDENCE DECLARATION
63
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT
The Board of ERA considers high standards of corporate
governance to be critical to business integrity and performance
and to maximise the overall long term return to shareholders.
The Board seeks to ensure that ERA meets the objectives of
its shareholders, while paying proper regard to the interests of
employees and external stakeholders.
The corporate governance structures and practices in place
at ERA are substantially in compliance with the 3rd Edition of
the Corporate Governance Principles and Recommendations
(“Principles”) developed by the ASX Corporate Governance
Council (“Council”).
The Board has considered the Council’s Principles, and ERA
did not comply with the following recommendations for the
whole of the reporting period:
•
Recommendation 2.4 – there was not a majority of
independent Directors.
Recommendation 2.5 – the Chair of the Board and Chief
Executive were the same person for part of the reporting
period.
Recommendations 4.1 and 7.1 – for part of the reporting
period the Audit and Risk Committee was not chaired
by an independent Director, nor did it have a majority of
independent Directors.
Recommendation 8.1 – for part of the reporting period
the Remuneration Committee was not chaired by an
independent Director, nor did it have a majority of
independent Directors.
•
•
•
As explained further below, the Board considers that in
each case this is either appropriate or was an unavoidable
consequence of the resignation of the Board’s independent
Directors in June 2015.
This Corporate Governance Statement is current as at 10
February 2016 and has been approved by the Board of ERA.
Board responsibilities and charter
In carrying out its responsibilities and powers, the Board at all
times recognises its overriding responsibility to act honestly,
fairly, diligently and in accordance with the law in serving the
interests of the ERA’s shareholders and employees and the
community.
The Board Charter underpins the strategic guidance and
effective management oversight provided by the Board, and
defines the division of responsibility between Board and
management by formal delegation and a system of Board
reserve powers.
Other than as specifically reserved to the Board in the Board
Charter, responsibility for the management of ERA’s business
is delegated to the Chief Executive who is accountable to the
Board.
64
The Board approves strategy and business plans and monitors
the performance of ERA against these plans. The Board also
monitors compliance with policies prescribed by the Board in
areas such as health and safety, environment, business ethics,
internal control and risk management. These policies are
designed to ensure that ERA meets or exceeds the regulatory
requirements governing its operations.
In addition to the matters expressly required by law to be
approved by the Board, the powers specifically reserved for the
Board are as follows:
(a)
confirming the appointment and removal of a Chief
Executive proposed by Rio Tinto and the terms and
conditions of the Chief Executive’s employment;
appointment and removal of a Company Secretary;
appointment of the Chair of the Board and members of
Board Committees;
any matters set out in the Schedule of Matters
Reserved for Decision or Consideration by the Board;
and
approval, subject to the Constitution, the Corporations
Act 2001 and the ASX Listing Rules, of each of the
following:
(i)
(b)
(c)
(d)
(e)
(ii)
(iii)
(v)
(vi)
(vii)
(viii)
(ix)
the issue of new shares or other securities in
the Company;
incurring of debt (other than trade creditors
incurred in the normal course of business);
capital expenditure in excess of $5,000,000;
the acquisition, divestment or establishment of
any significant business assets;
changes to the discretions delegated from the
Board;
the annual operating budget plan;
changes to the capital and operating approval
limits of senior management; and
the annual report and interim and preliminary
final reports.
The Board Charter is available at the Corporate Governance
section of ERA’s website.
Composition
From 1 January 2015 to 13 April 2015, the Board of ERA
consisted of eight Directors, seven of whom were non-executive.
On 13 April 2015, the number of Directors decreased to six,
following the resignation of Mr Taylor and Mr Pegler as non-
executive Directors.
On 20 June 2015, Mr McMahon, Dr Garnett and Dr Smith
resigned as non-executive Directors, reducing the number of
Directors to three, being Ms Sutton, Mr Cox and Ms Farrell.
On 26 October 2015, the number of Directors was increased to
six with the appointment of Mr Mansell (Chairman), Mr Charles
and Mr Dowd as non-executive Directors. On 6 December 2015
Mr Trott was appointed as a non-executive Director, increasing
the number of Directors to seven. Mr Cox will stand down as
a Director at the 2016 Annual General Meeting, reducing the
number of Directors to six.
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Ms Sutton was the Board’s only executive Director and held
the position of Chief Executive throughout 2015. Following the
resignation of Mr McMahon, and prior to the appointment of Mr
Mansell, Ms Sutton served as Chief Executive and Acting Chair.
Mr Mansell, Mr Charles, Mr Dowd, Dr Garnett, Mr McMahon, Mr
Pegler and Dr Smith all served as independent non-executive
Directors in 2015. Mr Cox, Ms Farrell, Mr Taylor and Mr Trott,
who are all executives of Rio Tinto, also served as non-executive
Directors during the period.
Skills, experience and diversity
The Board strives to achieve a diversity of skills, experience and
perspective among its Directors. Details of the Directors, their
experience, qualifications and other appointments are set out
on pages 38 to 41. Details of the independent status of each
Director is outlined in the Independence section below.
Qualification for Board membership is driven by the principle that
the Board’s composition should reflect the right balance of skills,
knowledge and diversity that the Board considers will best serve
the interests of ERA and all of its shareholders.
The Board reviews its structure, size and composition regularly.
The Board has not established a nominations committee. The
Board considers that its existing practices in reviewing Director
competencies, Board succession planning, Board performance
evaluation and Director selection and nomination carried out
in accordance with the Board Charter, are satisfactory and
appropriate given the size of the Board and ERA’s current
ownership structure.
The process to identify and nominate new independent
Directors from time to time is led by the incumbent independent
Directors (with the exception of the most recent appointments of
independent Directors in October 2015 which was necessarily
undertaken in the absence of incumbents). Decisions relating
to the appointment of Directors are made by the full Board.
Directors appointed by the Board are required by ERA’s
Constitution to submit themselves for re-election by shareholders
at the Annual General Meeting following their appointment.
There is no share ownership qualification for appointment as a
Director.
The ERA Board undertakes appropriate background checks and
screening prior to appointing a Director or putting a candidate
to security holders for election as a Director. ERA provides
security holders with all material information in its possession
concerning each Director standing for election or re-election in
the explanatory notes accompanying the notice of meeting.
Non-executive Directors are required to retire at least every
three years in accordance with ERA’s Constitution, but may offer
themselves for re-election.
The key attributes that the Board seeks to achieve in its
membership are set out below.
Mining
Health, Safety
and Environment
Financial
Technical
Strategy
Governance
Executive
leadership
Government
relations
Community
and indigenous
engagement
Risk
management
Senior executive experience in the
resources industry, including mining,
development, marketing and exploration
Familiarity with issues associated with
workplace health and safety, environment
and social responsibility
Proficiency in financial accounting and
reporting, corporate finance, internal
financial controls, corporate funding and
associated risks
A strong understanding in technical
areas of the resource industry, including
engineering, mining and processing
Proven ability in developing and imple-
menting successful business strategies,
including the capacity to probe and
challenge management on the delivery of
strategic objectives
Commitment to the highest standards of
governance, including Board experience
with other ASX listed companies that
demonstrate rigorous governance
standards
Sustainable success in business at a very
senior executive level
Interaction with government and
regulators and involvement in public
policy initiatives and decisions
Experience in engaging with a cross-
section of community and Indigenous
stakeholders
Experience in developing and establishing
risk management frameworks, setting risk
appetite and overseeing organisational
risk culture
Appointment, induction training and professional
development
All new non-executive Directors sign a letter of appointment
which sets out the key terms and conditions of their appointment
including duties, rights and responsibilities, the time commitment
envisaged and the Board’s expectations regarding their
involvement with committee work. The Chief Executive and
senior executives enter into service agreements which govern the
terms of their employment (see pages 55 and 56).
Induction training is provided to all new Directors. It includes
comprehensive induction materials, discussions with the
Chief Executive and senior executives and the option to visit
the Company’s operations at Ranger mine, either by
appointment or with the Board during its next site tour.
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The induction materials and discussions include information on
the Company’s strategy, culture and values; key corporate and
Board policies; the Company’s financial, operational and risk
management position; the rights and responsibilities of Directors;
and the role of the Board and its committees and meeting
arrangements.
All Directors are expected to maintain the skills required to
discharge their obligations to the Company. ERA provides
the opportunity for Directors to participate in professional
development activities to develop and maintain the skills and
knowledge needed to perform their role as Directors effectively.
Independence
For the purposes of determining Director independence, the
Board considers any material business relationship which
could interfere, or be perceived to interfere, with the Director’s
independence of judgement, ability to provide a strong, valuable
contribution to the Board’s deliberations and the Director’s ability
to act in the best interests of ERA and all shareholders. Where
contracts in the ordinary course of business exist between ERA
and a company in which a Director has declared an interest,
these are reviewed for materiality to both ERA and the other party
to the contract.
In addition to the examples set out in the Principles, the following
may be taken into account in considering such material business
relationships:
•
whether, within the last three years, the Director or a
close family member has been a member of executive
management of ERA, employed in a senior position with a
member of the Rio Tinto Group or has received additional
remuneration from the Company or a member of the
Rio Tinto Group;
whether the Director or a close family member is, or is
associated with, a substantial shareholder (more than
five per cent of the voting shares) in the Company or in a
member of the Rio Tinto Group;
the Director’s cross directorships of, or significant links with,
or involvement in, other companies;
the Director’s length of service on the Board and whether
this may have compromised independence; and
whether, within the last three years, the Director or a close
family member has had, either directly or indirectly and
whether as principal, employee or consultant, a material
business relationship with ERA or with a member of the
Rio Tinto Group, whether as an auditor, professional adviser,
supplier, or customer (“material” being more than five per
cent of ERA’s or the counterparty’s consolidated gross
revenue per annum).
•
•
•
•
Mr Mansell, Mr Charles and Mr Dowd are considered by the
Board to be independent Directors, as were Dr Garnett, Mr
Pegler and Dr Smith prior to their resignations.
66
Mr McMahon was nominated to the Board by Rio Tinto in
November 2012. Mr McMahon was previously an executive of
Rio Tinto, however, a sufficient period of time (three years) had
elapsed since he ceased employment with Rio Tinto. Prior to
his resignation, the Board was satisfied that Mr McMahon had
no continuing relationship with Rio Tinto that would interfere
with his independent exercise of judgement and that he was an
independent Director.
For the reporting period, the Board of Directors did not consist of
a majority of independent Directors (including between 20 June
2015 and 26 October 2015 when there were no independent
Directors). This does not follow Recommendation 2.4 of the
Council’s Principles. The Board considers it appropriate that
its usual composition (being an equal mix of independent and
non-independent Directors) recognises Rio Tinto’s 68.4 per cent
shareholding.
All Directors are required to, and do, bring an independent
judgement to bear on Board decisions and act in accordance with
their statutory duties of good faith and for a proper purpose, and
in the interests of all shareholders.
All related party transactions, including those with Rio Tinto, have
been determined by the independent Directors to be on arm’s
length terms and in the interests of ERA.
Chairman and Chief Executive
The Chairman, Mr Mansell, is an independent non-executive
Director. Mr Mansell’s other appointments are set out on page
38. The Board considers that none of his other commitments
interfere with the discharge of his duties to ERA.
The Chief Executive is Ms Sutton, who is also a Director.
Between 21 June 2015 and 26 October 2015, Ms Sutton served
as Chief Executive and Acting Chair of the Board. This is not
consistent with Recommendation 2.5 of the Council’s Principles.
The Board considered this at the time and determined that Ms
Sutton was the most appropriate person to serve as Acting Chair
until new independent Directors were appointed.
Company Secretary
The Company Secretary is responsible for ensuring that Board
procedures are complied with and that governance matters are
addressed. All Directors have direct access to the Company
Secretary who is accountable directly to the Board, through the
Chairman, on all matters to do with the proper functioning of
the Board. Details of the Company Secretary’s experience and
qualifications are set out on page 42.
Board meetings
The Board held seven scheduled meetings and nine
extraordinary meetings during 2015. In addition, there were
eight meetings held in 2015 of committees established by the
Board. The Board and Committee meeting attendance details for
Directors in 2015 are set out on page 44.
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Performance self assessment
In 2014 the Board performed an evaluation of itself that:
(a) considered the performance of the Directors and the Board
and the adequacy of the Board’s structures and processes,
including the Board Charter;
(b) set out goals and objectives of the Board for the upcoming
year; and
(c) considered whether any improvements or changes to the
Board structures and processes, including the Board Charter
and Audit and Risk Committee Charter, were necessary or
desirable.
The process of evaluation and self assessment took the form
of a questionnaire completed by each of the Directors and
the Company Secretary. Following collation by an external
consultant, the results and the adequacy and appropriateness
of the self assessment process were compiled. A report outlining
the results was circulated to all Directors and discussed at the
following Board meeting, where actions arising were agreed.
Due to the timing and number of changes to the Board’s
composition in 2015, a performance evaluation was not carried
out in the period.
Independent professional advice
The Board has adopted a procedure for Directors wishing to seek
independent professional advice, at the Company’s expense, in
the furtherance of their duties. The Board recognises that there
may be circumstances in which individual Directors are entitled
to independent professional advice at the Company’s expense
in the furtherance of their duties, and any Director may do so by
arrangement with the Company Secretary.
Remuneration
ERA’s Constitution provides that the aggregate remuneration
paid to non-executive Directors of ERA in any one year will not
exceed $800,000 or such other amount as may be approved
by shareholders from time to time. At the 2015 Annual General
Meeting, the 2014 Remuneration Report was approved with
92.32 per cent of shares voted in favour (voting comprised
363,749,929 votes ‘for’ the resolution and 30,240,884 votes
‘against’ the resolution). North Limited and Peko-Wallsend Pty
Ltd, which are both Rio Tinto entities, voted a combined total of
354,078,854 votes ‘for’ the resolution.
In 2012, the Board established a Remuneration Committee. At 31
December 2015, the Remuneration Committee comprised three
non-executive Directors, being Mr Mansell (Chair), Mr Dowd and
Ms Farrell, two of whom are independent. A majority of members
constitutes a quorum for a meeting. The Chief Executive may
be invited to attend Remuneration Committee meetings. Other
executives may also be invited to discuss or report on particular
agenda items.
During the period from 1 July 2015 to 6 December 2015, the
Remuneration Committee was comprised of Ms Farrell (Chair)
and Mr Cox, neither of whom are considered by the Board
to be independent. This does not follow Recommendation
8.1 of the Council’s Principles but was unavoidable following
the resignation of independent Directors. The composition of
the Remuneration Committee was modified shortly after the
appointment of new independent Directors in October 2015 to be
in line with Recommendation 8.1.
Prior to 20 June 2015, the Remuneration Committee was
comprised of Mr Pegler (Chair until 13 April 2015), Dr Smith
(Chair from 13 April 2015), Dr Garnett and Mr McMahon, all of
whom were independent Directors.
The Remuneration Committee Charter sets out the role and
objectives of the Remuneration Committee. A summary of the
objectives of the Remuneration Committee and the policies and
practices of the Company regarding the remuneration of non-
executive Directors, the Chief Executive and senior executives
is set out on pages 45 to 48 of the Remuneration Report.
The complete Remuneration Committee Charter is available at
the Corporate Governance section of ERA’s website.
Details of how the performance evaluation process is undertaken
by the Board in respect of the Chief Executive and senior
executives are set out on pages 45 and 48 of the Remuneration
Report.
Audit and Risk Committee
The Audit and Risk Committee is appointed by the Board and at
31 December 2015 comprised three non-executive Directors, two
of whom are independent. A majority of members constitutes a
quorum. The present members of the Audit and Risk Committee
are Mr Cox (Chair), Mr Mansell and Mr Charles. The Company’s
Chief Financial Officer, Chief Executive and Legal Counsel &
Company Secretary, the external auditor and the internal auditor
are invited to attend all meetings.
During the period from 1 July 2015 to 6 December 2015, the
Audit and Risk Committee was comprised of Mr Cox (Chair)
and Ms Farrell, neither of whom are considered by the Board
to be independent. This does not follow Recommendations 4.1
or 7.1 of the Council’s Principles but was unavoidable following
the resignation of independent Directors. The composition of
the Audit and Risk Committee was modified shortly after the
appointment of new independent Directors to be more in line with
Recommendations 4.1 and 7.1 of the Council’s Principles.
As at 31 December 2015 the Audit and Risk Committee
continued to be chaired by Mr Cox. This does not follow
Recommendations 4.1 or 7.1 of the Council’s Principles.
In December the Board considered the composition of the Audit
and Risk Committee in light of the skills and experience of the
current Directors and determined that it was appropriate for
Mr Cox to remain as Chair for the remainder of 2015.
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Prior to 20 June 2015 the Audit and Risk Committee was
comprised of Dr Garnett (Chair), Mr McMahon, Mr Pegler (until
13 April 2015) and Dr Smith, all of whom were independent
Directors.
The Audit and Risk Committee Charter sets out the role and
terms of reference of the Audit and Risk Committee and is
reviewed regularly. The Audit and Risk Committee Charter is
available at the Corporate Governance section of ERA’s website.
The Committee provides a formal structure for reviewing ERA’s
financial statements, accounting policies, control systems, risk
management practices and taxation issues and for liaison with
the external and internal auditors. The Committee also reviews
the adequacy of internal and external audit arrangements.
The Audit and Risk Committee advises the Board of any matters
that might have a significant impact on the financial condition
of ERA and has the authority to investigate any matters within
its terms of reference, having full access to the information and
resources of ERA to fulfil its function. Related party transactions
are considered by the Audit and Risk Committee. The Audit and
Risk Committee reviews compliance with the Corporations Act
2001, and the requirements of the ASX and other regulatory
requirements.
The Audit and Risk Committee held three scheduled meetings
during 2015 and two extraordinary meetings. Attendance details
of the 2015 meetings of the Audit and Risk Committee, and the
qualifications and experience of the members, are set out in the
Directors’ Report on pages 38 to 41 respectively.
Each year the external auditor submits a schedule of audit
services and fee estimate to the Audit and Risk Committee
for consideration and approval. PricewaterhouseCoopers has
been ERA’s external auditor for a number of years. Each year,
the Audit and Risk Committee reviews the effectiveness of the
external audit process and the independence of the auditor.
Based on its 2015 review, the Audit and Risk Committee was
satisfied with the external audit process and that the external
auditor remained independent. Any work to be conducted by the
external auditor other than the audit is approved by the Audit and
Risk Committee.
Details of the fees paid to PricewaterhouseCoopers during 2015
are outlined on page 62.
Diversity
ERA acknowledges the benefits that flow from advancing Board
and employee diversity, in particular gender and indigenous
diversity. These benefits include identification and rectification
of gaps in the skills and experience of Directors and employees,
enhanced employee retention, greater innovation and
maximisation of available talent to achieve corporate goals and
increased financial performance.
Diversity, in the context of the Company, primarily refers to
groups which are under represented in its workforce. ERA has a
particular focus on the representation of women and Indigenous
people in its workforce. ERA’s policy on diversity can be found on
the Company’s website at www.energyres.com.au. In accordance
with the Company’s diversity policy, ERA has set measurable
objectives to achieve diversity. The objectives and the Company’s
progress in achieving each objectives are set out below:
OBJECTIVE
OUTCOME
Women to represent 20 per
cent of the management
(being manager level and
above) and the Board by end
of 2015.
As at 31 December 2015
female participation at manager,
Executive Committee and Board
level is 24%. Women comprise
29% of Directors. Total female
participation is 17%.
Target of 33 per cent
Indigenous people and 25 per
cent female participation in
new apprenticeships by end
of 2015.
Throughout 2015, ERA had ten
full time apprentices, four of
whom are Indigenous (40%). In
addition, ERA has five school
based apprentices.
Target Indigenous
employment of 20 per cent by
the end of 2015.
ERA ended 2015 with an
Indigenous employment rate of
13 per cent.
As at 31 December 2015, the proportion of women employed by
ERA was as follows:
Board of Directors
Executive Committee and
managers
Company
29%
24%
17%
Code of business conduct
ERA has a Code of Business Conduct to be met by all employees
and Directors. All employees are required to maintain high
standards of ethical behaviour in the execution of their duties and
comply with all applicable laws and regulations in Australia and in
every other country in which the Company engages in business.
The Code of Business Conduct is reviewed to ensure it
adequately addresses the issues facing the Company and is
available for inspection on the Corporate Governance section of
the Company’s website at www.energyres.com.au.
In addition to the Company’s Code of Business Conduct, the
Company’s employees are required to comply with Rio Tinto’s
statement of business practice The Way We Work, available at
Rio Tinto’s website at www.riotinto.com.
The Company has a confidential whistleblower programme
known as ‘Speak-OUT’. Employees are encouraged to report any
suspicion of unethical or illegal practices.
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ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Purchase and sale of Company securities
ERA has in place a formal policy that reinforces to all Directors,
officers and employees the prohibitions against insider trading.
The Share Trading Policy is available for inspection at the
Corporate Governance section of the Company’s website at
www.energyres.com.au.
In addition, the “Rules for dealing in securities of Rio Tinto”
(“Rules for dealing”) apply to the participation of ERA executives
in the Rio Tinto long term incentive plans involving the awarding
of Rio Tinto securities at a future date. Any such grants of
shares and options under the Rio Tinto plans are subject to, and
conditional upon, compliance with the terms of the Rules for
dealing, including an express prohibition on hedging or limiting of
exposure to economic risk in relation to such securities.
Under the ERA Share Trading Policy:
•
Directors and senior managers must advise the Chairman in
writing, and receive approval in writing from the Chairman,
if they intend to purchase or sell ERA securities. In regard
to his own dealings, the Chairman is required to notify the
Chair of the Audit and Risk Committee.
No dealings in ERA securities may take place for the period
from the end of any relevant financial period to the trading
day following announcement of ERA’s annual results or half
year results.
•
Particulars of the interests held by Directors are outlined on page
44 of the Remuneration Report.
Risk identification and management
ERA has in place a range of policies and procedures to manage
the risks associated with its operating activities. These policies
and procedures have been adopted by the Board, with primary
oversight by the Audit and Risk Committee, to ensure that
potential business risks are identified and appropriate action
taken.
The Company has an annual internal audit programme that
is determined by the Audit and Risk Committee. The annual
internal audit programme is executed by an outsourced
provider which reports back to the Audit and Risk Committee
on its assessment of the Company’s control environment. In
addition, the Company’s compliance officer provides support for
internal audit planning activities and the monitoring of actions
implemented by the Company in response to findings raised by
the internal auditor.
ERA benefits from the Rio Tinto Group’s knowledge, policies
and practices on risk management and corporate assurance,
developed to manage Rio Tinto’s diverse business activities
covering a variety of commodities and operational locations.
Together, these make up a comprehensive framework and
approach to risk analysis and risk management. The Board has
in place a number of systems to identify and manage business
risks. These include:
•
the identification and review of all of the business risks
known to be facing the Company;
•
•
•
•
•
the provision of reports and information by management to
the Board, on a periodic basis, confirming the status and
effectiveness of the plans, controls, policies and procedures
implemented to manage business risks;
guidelines for ensuring that capital expenditure and revenue
commitments exceeding certain approved limits are placed
before the Board for approval;
limits and controls for all financial exposures, including the
use of derivatives;
a regulatory compliance programme; and
safety, health and environmental policies which are
supported by a set of standards and management systems
which recognise the Company’s commitment to achieving
high standards of performance in all its activities in these
areas.
The Audit and Risk Committee reviews ERA’s risk management
framework at least annually, and did so in 2015, to satisfy itself
that it continues to be sound.
In 2015, both the Audit and Risk Committee and the Board
undertook an assessment of the strategic risks to the Company’s
business and the mitigation strategies to be implemented
by management. The strategic risks identified through this
assessment were process water management, cashflow over
the period 2016 to 2018, Ranger 3 Deeps mine, stakeholder
support of the Company’s strategic initiatives, rehabilitation
of the Ranger Project Area, internal constraints relating to the
Company’s licence to operate, external events relating to the
Company’s licence to operate, long term resource access and
human resources.
These strategic risks are in addition to risks inherent to the
mining industry generally which include economic conditions
(fluctuations in commodity pricing and exchange rates),
international regulation of greenhouse gas emissions and impact
of climatic conditions. More information on ERA’s business risks,
including any material exposure to economic, environmental and
social sustainability risks, is set out on page 15 of the Annual
Report.
Each reporting period, the Chief Executive and the Chief
Financial Officer give statements to the Board that, in their
opinion, the financial records of the Company have been
properly maintained and that the financial statements comply
with the Australian Accounting Standards and give a true and fair
view of the Company’s financial position and performance. The
statements also provide that the opinion has been formed on the
basis of a sound system of risk management and internal control
which is operating effectively in all material respects. In 2015,
the Chief Executive and senior executives of the Company also
made a declaration that they:
•
understood the key requirements of each business integrity
element of the Rio Tinto’s The Way We Work; and
had actively engaged with their direct reports to:
•
- promote awareness of the business integrity values; and
- ensure compliance with the Company’s expectations
around each value.
69
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Public statements and disclosure matters
ERA makes full and immediate disclosures to its shareholders
and the market as required by, and in accordance with, its legal
and regulatory obligations. Established systems are in place
to ensure compliance and matters that may have a material
impact on the price or value of ERA’s securities are reported to
the market in accordance with the ASX Listing Rules and the
Corporations Act 2001. ERA’s Continuous Disclosure Policy
is available at the Corporation Governance section of ERA’s
website.
Shareholder communication
ERA recognises the importance of effective communication with
shareholders and the general investment community. Apart from
ERA’s compliance with its mandatory continuous disclosure
obligations, ERA takes steps to ensure that its shareholders
and other stakeholders are kept informed. Full advantage is
taken of the Annual General Meeting to inform shareholders of
current developments and to give shareholders the opportunity
to ask questions. PricewaterhouseCoopers, ERA’s external
auditor attends the Annual General Meeting and is available to
answer shareholder questions about the conduct of the audit
and the preparation and content of the auditor’s report. ERA
shareholders are also able to submit written questions regarding
the statutory audit report to the auditor via the Company. Any
questions received and answers provided will be made available
to members at the Annual General Meeting. Shareholders who
are unable to attend meetings are encouraged to appoint a
proxy to vote either as they direct or at their discretion.
ERA believes that investor seminars, presentations and
briefings on financial and operational issues, including
social and environmental performance, are valuable ways of
communicating with relevant professionals, employees and
other interested persons. The Chief Executive and Chief
Financial Officer conduct regular meetings with the Company’s
major investors and analysts, and the Company organises
investor briefings to coincide with the release of half year and
full year financial results.
ERA gives equal access to information disclosed in investor
seminars, presentations and briefings. If any such event is used
to disclose new material, it will, in advance or simultaneously, be
disclosed to the ASX and available on ERA’s website.
ERA provides shareholders with the option to receive
communications from, and send communications to, the
Company and the share registrar electronically. The contact
details are available on the Company’s website.
70
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2015
Revenue from continuing operations
Changes in inventories
Purchased materials (uranium oxide)
Materials and consumables used
Employee benefits and contractor expenses
Government and other royalties
Commission and shipping expenses
Depreciation and amortisation expenses
Financing costs
Statutory and corporate expenses
Other expenses
Profit/(loss) before income tax
Income tax (expense)/benefit
Profit/(loss) for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit/(loss) is attributable to:
Owners of Energy Resources of Australia Ltd
Total comprehensive income for the year is attributable to:
Owners of Energy Resources of Australia Ltd
Earnings per share for profit/(loss) attributable to the
ordinary equity holders of the Company:
Basic earnings per share (cents)
Diluted earnings per share (cents)
NOTES
2015
$’000
2014
$’000
3
348,260
401,798
4
4
4
4
5
(46,800)
(124,876)
-
(74,449)
(66,933)
(85,300)
(135,768)
(215,816)
(17,908)
(15,423)
(5,130)
(2,333)
(111,933)
(119,977)
(22,031)
(12,787)
(1,252)
(29,301)
(11,247)
(4,194)
(79,798)
(273,602)
(195,695)
85,802
(275,493)
(187,800)
-
-
(275,493)
(187,800)
(275,493)
(187,800)
(275,493)
(187,800)
27
27
(53.2)
(53.2)
(36.3)
(36.3)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
71
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT BALANCE SHEET
AS AT 31 DECEMBER 2015
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Inventories
Undeveloped properties
Property, plant and equipment
Deferred tax assets
Investment in trust fund
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Payables
Income received in advance
Provisions
Total current liabilities
Non-current liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
The above balance sheet should be read in conjunction with the accompanying notes.
72
NOTES
2015
$’000
2014
$’000
7
8
9
10
11
12
13
14
15
16
17
18
14
19
20
20
365,326
293,318
20,440
11,232
132,950
146,559
480
1,392
519,196
452,501
49,673
203,632
259,990
-
68,324
85,728
203,632
358,485
174,627
66,751
581,619
889,223
1,100,815
1,341,724
50,139
38,930
39,958
55,621
14,911
40,552
129,027
111,084
480,750
485,033
21,091
501,841
630,868
469,947
-
485,033
596,117
745,607
706,485
389,751
706,485
389,918
(626,289)
(350,796)
469,947
745,607
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2015
Balance at 1 January 2014
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Employee share options – value of employee services
20
Balance at 31 December 2014
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Employee share options – value of employee services
20
CONTRIBUTED
EQUITY
$’000
RESERVES
$’000
RETAINED
EARNINGS
$’000
NOTES
TOTAL
$’000
706,485
390,533
(162,996)
934,022
-
-
-
-
-
-
(187,800)
(187,800)
-
-
(187,800)
(187,800)
(615)
(615)
-
-
(615)
(615)
706,485
389,918
(350,796)
745,607
-
-
-
-
-
-
-
-
(275,493)
(275,493)
-
-
(275,493)
(275,493)
(167)
(167)
-
-
(167)
(167)
Balance at 31 December 2015
706,485
389,751
(626,289)
469,947
The above statement of changes in equity should be read in conjunction with the accompanying notes.
73
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
(inclusive of Goods and Services Tax)
Payments to suppliers and employees
(inclusive of Goods and Services Tax)
Payments for exploration and evaluation
Payments for rehabilitation
Interest received
Financing costs paid
NOTES
2015
$’000
2014
$’000
375,701
448,514
(261,400)
(368,975)
114,301
(8,749)
(26,538)
6,920
(1,340)
84,594
79,539
(83,205)
(56,977)
7,871
(1,219)
(53,991)
(11,906)
(11,590)
247
(11,659)
2,652
(8,938)
(904)
(904)
72,031
293,318
(23)
(962)
(962)
(63,891)
357,208
1
Net cash (outflow)/inflow from operating activities
26
CASH FLOW FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash (outflow)/inflow from investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Employee share option payments
Net cash (outflow)/inflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of year
7
365,326
293,318
The above cash flow statement should be read in conjunction with the accompanying notes.
74
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
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,
unless otherwise stated. The financial statements are for Energy
Resources of Australia Ltd (ERA).
(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
International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB).
(ii) Historical cost convention
These financial statements have been prepared under the
historical cost convention.
(iii) Critical accounting estimates
The presentation of financial statements requires the use of cer-
tain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the accounting
policies of the Company. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and esti-
mates are significant to the financial statements, are disclosed in
Note 2.
(b) Principles of consolidation
(i) Subsidiaries
ERA has no subsidiaries and is referred to in the financial report
as the Company.
Subsidiaries are all those entities (including special purpose
entities) over which the Company has the power to govern
the financial and operating policies, generally accompanying
a shareholding of more than one half of the voting rights. The
existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing
whether the Company controls another entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Company. They are de-consolidated from the
date that control ceases.
Intercompany transactions, balances and unrealised gains
on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the
Company.
(c) Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances, rebates and amounts collected on
behalf of third parties.
The Company recognises revenue when the amount of revenue
can be reliably measured, it is probable that future economic
benefits will flow to the entity and specific criteria have been met
for the Company’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, taking into
consideration the type of customer, the type of transaction and
the specifics of each arrangement.
(i) Sale of goods
Sales are brought to account when the products pass from the
physical control of the Company pursuant to an enforceable
contract, when selling prices are known or can be reasonably
estimated and when the products are in a form that requires no
further treatment by the Company.
In the case where a sale occurs and immediately after which
(part of) the goods are borrowed back by the Company under a
separate agreement, the revenue is deferred until repayment of
the borrowed goods occurs.
(ii) Rendering of services
Revenue from the rendering of services is recognised when the
service is provided.
(iii) Other revenue/income
Other revenue/income recognised by the Company includes:
•
interest income, which is recognised on a time proportion
basis using the effective interest rate method;
rental income, which is recognised on a straight line basis;
net gains on disposal of assets, which is recognised at the
date control of the asset passes to the acquirer;
foreign exchange gains; and
insurance recoveries, which is recognised on confirmation
from the insurer that the claim payment has been approved.
•
•
•
•
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements are measured using
the currency of the primary economic environment in which
the entity operates (“the functional currency”). The financial
statements are presented in Australian dollars, which is the
Company’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation
at year end exchange rates of monetary assets and liabilities
75
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
denominated in foreign currencies are recognised in the
statement of comprehensive income, except when they are
deferred in equity as qualifying cash flow hedges and qualifying
net investment hedges or are attributable to part of the net
investment in a foreign operation.
cost estimates, changes to lives of operations and revisions to
discount rates are capitalised within fixed assets. These costs are
then depreciated on a unit of production basis over the life of the
reserves.
(e) Financing costs
Financing costs (including interest) are included in the statement
of comprehensive income in the period during which they are
incurred, except where they are included in the cost of non-
current assets that are currently being developed and will take
a substantial period of time to complete. The borrowing costs
included in the cost of such developments are those costs that
would have been avoided if the expenditure on the development
had not been made.
Once the asset is ready for use, the capitalised borrowing costs
are depreciated as a part of the carrying amount of the related
asset.
The capitalisation rate used to determine the amount of
borrowing costs to be capitalised is the weighted average interest
rate applicable to the Company’s outstanding borrowings during
the year.
(f) Provisions
Provisions are recognised when the Company has a present
legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle
the obligation and the amount has been reliably estimated.
Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management’s
best estimate of the expenditure, adjusted for risk, required
to settle the present obligation at the balance sheet date. The
discount rate used to determine the present value reflects current
market assessments of the time value of money. The increase in
the provision due to the passage of time is recognised as interest
expense.
(i) Rehabilitation
The Company is required to rehabilitate the Ranger Project Area
upon cessation of mining operations. The costs are estimated
on the basis of a closure model, taking into consideration the
technical closure options available to meet the Company’s
obligations and applying a probability weighting to each option
based on the likelihood of executing each option. When it is
deemed only one option is available it is assigned a 100 per cent
probability. The cost estimates are calculated annually during
the life of the operation to reflect known developments, and are
subject to regular reviews.
The amortisation or unwinding of the discount applied in
establishing the net present value of provisions is charged to the
statement of comprehensive income in each accounting period.
The amortisation of the discount is shown as a financing cost.
Other movements in the provision for closure and restoration
costs, including those resulting from new disturbance, updated
76
Where rehabilitation is conducted systematically over the life
of the operation, rather than at the time of closure, provision is
made for the outstanding continuous rehabilitation work at each
balance date. All costs of continuous rehabilitation work are
charged to the provision as incurred.
Separately, the Company is required to maintain with the
Commonwealth Government the Ranger Rehabilitation Trust
Fund (“Trust Fund”), to provide security against the estimated
costs of closing and rehabilitating the mine immediately (rather
than upon the planned cessation of mining operations). Each
year, 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 in the Trust Fund, is then
determined. The Trust Fund includes both cash and financial
guarantees. The cash portion is shown as an investment on the
balance sheet (Note 15), and interest received by the Trust Fund
is shown as interest income.
The Company is required to rehabilitate the Jabiluka Mineral
Lease upon cessation of operations to a standard specified by
the Authorisation to operate issued by the Northern Territory
Government. The estimated cost of rehabilitation is currently
secured by a bank guarantee and fully provided for in the
financial statements.
(g) Income tax
Income tax expense for the period is the tax payable on the
current period’s taxable income based on the applicable income
tax rate adjusted by temporary differences between the tax bases
of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
The current income tax charge is calculated on the basis of
the tax laws enacted or substantively enacted at the end of the
reporting period in the country where the Company generates
taxable income (Australia).
Deferred income tax is provided in full, using the liability method,
on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial
statements. However, the deferred income tax is not accounted
for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time
of the transaction affects neither accounting nor taxable profit
or loss. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by
the reporting date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax
liability is settled.
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax liabilities and assets are not recognised for
temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent
entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse
in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle
the liability simultaneously.
Current and deferred tax balances attributable to amounts
recognised directly in equity are also recognised directly in equity.
(h) Trade and other receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method less provision for impairment.
Trade receivables are normally settled within 45 days and are
carried at amounts due. The collectability of trade receivables is
reviewed on an ongoing basis and specific provisions are made
for any doubtful amounts. Receivables which are known to be
uncollectible are written off.
Other receivables relate to transactions outside the usual
operating activities of the Company and are predominantly
concerned with rental receipts from employees and businesses
located within the Jabiru township. These ongoing activities
are expected to be settled during the 12 months subsequent
to balance date but are assessed regularly and impaired
accordingly.
(i) Inventories
Inventories, other than stores, are carried at the lower of cost and
net realisable value. Net realisable value is determined based
on estimated future sales prices, exchange rates and capital and
production costs, including transport.
Inventory is valued using the weighted average cost method and
includes both fixed and variable production costs as well as cash
and non-cash charges.
Stockpiles represent ore that has been extracted and is available
for further processing. If there is significant uncertainty as
to when the stockpiled ore will be processed it is expensed
as incurred. Where the future processing of this ore can be
predicted with confidence, for example because it exceeds the
mine’s cut off grade, it is valued at the lower of cost and net
realisable value.
Stockpiled ore’s net realisable value is calculated on a discounted
cash flow basis. If the ore will not be processed within 12 months
after the balance sheet date it is included within non-current
assets.
Work in progress inventory includes ore stockpiles and other
partly processed material. Quantities are assessed primarily
through surveys and assays.
Stores are valued at cost or net realisable value where applicable
and are impaired accordingly to take into account obsolescence.
For inventory management purposes the Company may enter
into uranium loans as a lending or receiving party. These loans
are entered into for logistical purposes and loans received are
repaid from the Company’s inventory. The uranium loans do not
meet the definition of a financial liability and are recorded net of
inventory.
(j) Impairment of assets
Assets that have an indefinite useful life and intangible
assets that are not yet available for use are tested annually
for impairment or more frequently if events or changes in
circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s
fair value less cost to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash flows (cash
generating units).
Fair value is determined as the amount that would be obtained
from the sale of the asset in an arm’s length transaction.
The value in use is determined using the present value of the
future cashflow expected to be derived from an asset or cash
generating unit.
(k) Property, plant and equipment
(i) Acquisition
Items of property, plant and equipment are recorded at historical
cost and, except for land, are depreciated as outlined below.
Historical cost includes expenditure that is directly attributable
to the acquisition of the items. Subsequent costs are included in
the asset’s carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the 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.
77
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
(ii) Depreciation and amortisation
Depreciation of plant and equipment is provided for as follows:
(a) individual assets that have a life equal to or longer
than the estimated remaining life of the Ranger mine are
depreciated on a unit of production basis over the life of the
reserves; and
(b) each other asset is depreciated over its estimated
operating life on a straight line basis.
The following indicates the depreciation method for buildings
and plant and equipment on which the depreciation charges are
based:
•
•
buildings – units of production over the life of reserves;
plant and equipment* – units of production over the life
of reserves.
* Some of these assets are depreciated on a straight line
basis over their useful operating life which is less than the
life of the Ranger mine. See below for the estimated useful
lives.
• Office equipment: computers - three years
• Office equipment: general - five years
Plant and equipment - five years
•
•
Furniture & fittings - ten years
• Motor vehicles - five years
•
•
Tailings Storage Facility - three years
Brine Concentrator - seven years
Assets are depreciated from the date of acquisition or, in respect
of internally constructed assets, from the time an asset is
completed and held ready for use.
(iii) Leases
Leases in which a significant portion of the risks and rewards
of ownership are not transferred to the Company as lessee are
classified as operating leases (Note 22). Payments made under
operating leases (net of any incentives received from the lessor)
are charged to the statement of comprehensive income on a
straight-line basis over the period of the lease.
(iv) Mine properties
Mine properties, consisting principally of Ranger Project Area
mining rights, are amortised on a unit of production basis over the
life of the economically recoverable reserves of Ranger.
(v) Deferred stripping costs
Stripping costs incurred in the development of a mine before
production commences are capitalised as part of the cost of
constructing the mine and subsequently amortised over the life of
the mine on a units of production basis.
Stripping costs incurred during the production stage of mining
operations are deferred where they are separately identifiable
and do not form part of normal mining activities. These costs are
deferred and amortised over the period in which the associated
ore is produced.
(l) Exploration and evaluation expenditure
Exploration and evaluation expenditure comprises costs which
are directly attributable to:
•
•
•
•
•
researching and analysing existing exploration data;
conducting geological studies, exploratory drilling and
sampling;
construction of underground tunnels, where necessary
for exploration drilling;
examining and testing extraction and treatment
methods; and
compiling prefeasibility and feasibility studies.
Exploration and evaluation expenditure also includes the costs
incurred in acquiring mineral rights, the entry premiums paid to
gain access to areas of interest and amounts payable to third
parties to acquire interests in existing projects.
Capitalisation of exploration expenditure commences when
there is a high degree of confidence in the project’s viability and
hence it is probable that future economic benefits will flow to the
Company. Capitalised exploration expenditure is reviewed for
impairment at each balance sheet date.
Subsequent recovery of the resulting carrying value depends
on successful development of the area of interest or sale of the
project. If a project does not prove viable, all unrecoverable costs
associated with the project and the related impairment provisions
are written off. Any impairment provisions raised in previous
years are reassessed if there is a change in circumstances which
indicates that they may no longer be required, for example if it is
decided to proceed with development. If the project proceeds to
development, the amounts included within intangible assets are
transferred to property, plant and equipment.
(i) Undeveloped properties
Undeveloped properties are mineral concessions where the
intention is to develop and go into production in due course.
The carrying values of these assets are reviewed annually by
management and the results of these reviews are reported to the
Board and Audit and Risk Committee. Impairment is assessed
based on a status report regarding the Company’s intentions for
development of the undeveloped property and is reviewed using
the fair value less cost to sell method.
(m) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is
recognised as part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of
GST receivable or payable. The net amount of GST recoverable
from, or payable to, the taxation authority is included with other
receivables or payables in the balance sheet. Cash flows are
presented on a gross basis. The GST components of cash
flows arising from investing or financing activities which are
recoverable from, or payable to the taxation authority, are
presented as operating cash flows.
78
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
(n) Trade and other payables
Liabilities are recognised for amounts to be paid in the future for
goods and services received prior to the end of the financial year,
whether or not billed to the Company. Trade accounts payable
are normally settled within 60 days. These are recognised initially
at their fair value and subsequently measured at amortised cost
using the effective interest rate method.
(o) Borrowings
Borrowings are initially recognised at fair value, net of transaction
costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in
the statement of comprehensive income over the period of the
borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
(p) Derivatives
Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently re-
measured to their fair value. The method of recognising the
resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the
item being hedged. The Company designates derivatives as
hedges against highly probable forecast transactions (cash flow
hedges).
The Company documents at the inception of the transaction
the relationship between hedging instruments and hedged
items, as well as its risk management objective and strategy
for undertaking various hedge transactions. The Company also
documents its assessment, both at hedge inception and on
an ongoing basis, of whether the derivatives that are used in
hedging transactions have been and will continue to be highly
effective.
The effective portion of changes in the fair value is recognised
in equity in the hedging reserve. The gain or loss relating to the
ineffective portion is recognised immediately in the statement of
comprehensive income.
Amounts accumulated in equity are recycled in the statement
of comprehensive income in the periods when the hedged item
will affect profit or loss (for instance when the forecast sale
that is hedged takes place). When a forecast transaction is no
longer expected to occur the cumulative gain or loss that was
reported in equity is immediately transferred to the statement of
comprehensive income.
Derivative financial instruments are not held for speculative
purposes.
(q) Employee entitlements
(i) Wages and salaries, annual leave and sick leave
The liability for employee entitlements to wages and salaries
represents the amount which the Company has a present
obligation to pay resulting from employees’ services provided
up to the reporting date. A provision exists for annual leave and
accumulating sick leave as it is earned by employees and is
measured at the amount expected to be paid when it is settled
and includes all related on costs. Liabilities for non-accumulating
sick leave are recognised when the leave is taken and measured
at the rates paid or payable.
(ii) Long service leave
The liability for long service leave expected to be settled within
12 months of the reporting date is recognised in the provision
of employee benefits and is measured in accordance with (i)
above. The liability for long service leave expected to be settled
more than 12 months from the reporting date is measured as
the present value of expected future payments to be made in
respect of services provided by employees up to the reporting
date. Consideration is given to the expected future wage and
salary levels, experience of employee departures and periods
of service.
Expected future payments are discounted using the rates
attaching to Commonwealth Government securities at the
reporting date, which most closely match the terms of maturity of
the related liabilities.
(iii) Superannuation plan
Employees of the Company are entitled to benefits on retirement,
disability or death from their membership of the Rio Tinto Staff
Superannuation Fund (“The Fund”). The Fund has both a defined
benefit and a defined contribution section. Contributions to the
defined contribution superannuation plans are expensed in the
income statement when incurred.
The Company has no staff who are members of the defined
contribution section.
(iv) Termination benefits
Termination benefits are payable when employment is terminated
before the normal retirement date, or when an employee
accepts voluntary redundancy in exchange for these benefits.
The 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.
Benefits falling due more than 12 months after the end of the
reporting period are discounted to present value.
79
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
(r) Segment reporting
Management has determined the operating segments based
on the reports reviewed by the Chief Executive, used to make
strategic decisions. The Chief Executive considers the business
from a product perspective.
Fair values are subsequently re-measured at each accounting
date to reflect the number of awards expected to vest based on
the current and anticipated TSR performance. If any awards are
ultimately settled in shares, the liability is transferred direct to
equity as the consideration for the equity instruments issued.
(s) Cash and cash equivalents
For the purposes of the statement of cash flows, cash includes
cash on hand and deposits held at call, net of any bank
overdrafts.
(t) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the
proceeds.
Incremental costs directly attributable to the issue of new shares
or options for the acquisition of a business are not included in the
cost of the acquisition as part of the purchase consideration.
(u) Earnings per share
(i) Basic earnings per share
Basic earnings per share is determined by dividing net profit after
income tax attributable to members of the Company, excluding
any costs of servicing equity other than ordinary shares, by the
weighted average number of ordinary shares outstanding during
the financial year, adjusted for bonus elements in ordinary shares
issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been
issued for no consideration in relation to dilutive potential ordinary
shares.
(v) Rounding of amounts
The Company is of a kind referred to in Class Order 98/0100,
issued by the Australian Securities and Investments Commission,
relating to the ‘rounding off’ of amounts in the financial report.
Amounts in the financial report have been ‘rounded off’ in
accordance with that Class Order to the nearest thousand
dollars, or in certain cases, to the nearest dollar.
(w) Share based payments
The fair value of cash settled share plans is recognised as a
liability over the vesting period of the awards. Movements in that
liability between accounting dates are recognised as an expense.
The grant date fair value of the awards is taken to be the market
value of the shares at the date of award reduced by a factor for
anticipated relative Total Shareholder Return (TSR) performance.
80
Equity settled share plans are settled either by the issue of
shares by the relevant parent Company, by the purchase of
shares on market or by the use of shares previously acquired
as part of a share buyback. The fair value of the share plans is
recognised as an expense over the expected vesting period with
a corresponding entry to other reserves. If the cost of shares
acquired to satisfy the plans exceeds the expense charged, the
excess is taken to the appropriate reserve. The fair value of the
share plans is determined at the date of grant, taking into account
any market based vesting conditions attached to the award (e.g.
TSR). The Company uses fair values provided by independent
actuaries calculated using a lattice based option valuation model.
Non-market based vesting conditions (e.g. earnings per share
targets) are taken into account in estimating the number of
awards likely to vest. The estimate of the number of awards likely
to vest is reviewed at each balance sheet date up to the vesting
date, at which point the estimate is adjusted to reflect the actual
awards issued. No adjustment is made after the vesting date
even if the awards are forfeited or not exercised.
Further information about the treatment of individual share based
payment plans is provided in Note 30.
(x) Dividends
Provision is made for the amount of any dividend declared,
determined or publicly recommended by the Directors on or
before the end of the financial year but not distributed at balance
date.
(y) New accounting standards and interpretations
Certain new accounting standards and interpretations have
been published that are not mandatory for 31 December 2015
reporting periods. The Company’s assessment of the impact of
these new standards and interpretations is set out below.
(i) AASB 9 Financial Instruments
AASB 9 Financial Instruments addresses the classification,
measurement and derecognition of financial assets and financial
liabilities. The standard is not applicable until 1 January 2018 but
is available for early adoption. The derecognition rules have been
transferred from AASB 139 Financial Instruments: Recognition
and Measurement and have not been changed. There will be
no impact on the Company’s accounting for financial liabilities,
as the new requirements only affect the accounting for financial
liabilities that are designated at fair value through profit or loss
and the Company does not have any such liabilities.
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
(ii) AASB 15 Revenue from Contracts with Customers
AASB 15 ‘Revenue from contracts with customers’ establishes
principles for reporting the nature, amount, timing and uncertainty
of revenue and cash flows arising from an entity’s contracts with
customers. The standard is not applicable until 1 January 2017
but is available for early adoption. ERA has not yet determined
the extent of the impact, if any.
In estimating the rehabilitation provision a risk free discount rate
is applied to the underlying cash flows. At 31 December the
Company has reduced the real discount rate from 2.5 per cent to
2.25 per cent. This resulted in an increase in the provision of
$7.2 million.
The overall change in the estimate (including change in estimate
and discount rate) to the rehabilitation provision is an increase of
$2.3 million at 31 December 2015.
There are no other standards that are not yet effective and that
are expected to have an impact on the entity in the current or
future reporting periods and in forecast transactions.
2
Critical accounting estimates and
judgements
Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including
expectations of future events that may have a financial impact on
the 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, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
(a) Rehabilitation provision
The calculation of the rehabilitation provision relies on estimates
of costs and their timing required to rehabilitate and restore
disturbed land to establish an environment similar to adjacent
areas of Kakadu National Park.
The costs are estimated on the basis of a rehabilitation model,
taking into account consideration of the preferred options
available to meet the Company’s obligations. The provision for
rehabilitation represents the net present cost at 31 December,
based on current disturbance, of the preferred plan within the
requirements of the Ranger Section 41 Authority.
The cost estimates are reviewed annually during the life of the
operation to reflect known developments. In 2015 this review
resulted in a decrease to the provision of $4.9 million. The
change in estimate considered updated technology and learnings
from work conducted to date, both on the Ranger Project Area
and other operations. The overall rehabilitation strategy remains
unchanged.
The ultimate cost of rehabilitation is uncertain and can vary
in response to many factors. It is reasonably possible that
outcomes within the next financial year that are different from the
current cost estimate could require material adjustment (increase
or decrease) to the rehabilitation provision for the Ranger
Project Area. Further information with regard to funding of the
rehabilitation provision is discussed in Note 28.
(b) Taxation
At the end of 31 December 2014, the Company recognised
certain deferred tax assets for temporary differences and
recoverable losses carried forward. In recognising these
deferred tax assets assumptions were made regarding the
Company’s ability to generate future taxable profits, including
from development of the Ranger 3 Deeps underground mine.
At the half year ended 30 June 2015, the Company recorded
a non-cash charge for the write down of the Company’s
deferred tax assets of $196.7 million. Following the Company’s
announcement on 11 June 2015 that the Ranger 3 Deeps project
will not proceed to Final Feasibility Study in the current operating
environment, the Company considers that the criteria under
Australian Accounting Standards for the recognition of carried
forward deferred tax losses are no longer satisfied.
As the write off is a non-cash item, it does not have any impact
on cash flow of the Company’s operations, nor will it impact the
availability of tax losses in future periods. The Company will
continue to consider the recoverability over time.
Judgement is required in regard to the application of income tax
legislation. There is an inherent risk and uncertainty in applying
these judgements and a possibility that changes in legislation will
impact the carrying amount of deferred tax assets and deferred
tax liabilities recognised on the balance sheet. Further details on
deferred tax assets are included in Note 14.
(c) Determination of ore reserves and resources
The Company estimates its Ore Reserves and Mineral
Resources based on information compiled by Competent
Persons as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’ (the JORC code). There are numerous uncertainties
inherent in estimating Ore Reserves and Mineral Resources 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 Ore Reserves and may, ultimately, result in the Ore
Reserves being restated. Such changes in Ore Reserves could
impact on depreciation and amortisation rates, asset carrying
values and provisions for rehabilitation. The Company’s Ore
Reserves and Mineral Resources Statement as at 31 December
2015 is on pages 18 and 19 of the Annual Report.
81
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
(d) Asset carrying value
The Company has two cash generating units (CGUs), the Ranger
Project Area and the Jabiluka Mineral Lease. The Ranger
CGU includes all assets and liabilities related to activities on
the Ranger Project Area, including the rehabilitation provision
and the associated asset capitalised within property, plant and
equipment. The Jabiluka Undeveloped Property relates to the
Jabiluka Mineral Lease which is currently under a long term care
and maintenance agreement.
(e) Inventory net realisable value
The calculation of net realisable value is sensitive to key
assumptions about the future including: uranium price, AUD/USD
exchange rate and, where applicable, costs to complete.
The sales price of uranium oxide is denominated in US dollars,
so fluctuations in the AUD/USD exchange rate will affect the
proceeds received from sales and consequently the recoverable
amount.
At 31 December 2015, an $11.3 million (pre-tax) adjustment was
made to finished goods inventory to record it at its net realisable
value. This was due to high non-cash costs and low December
2015 production, which drove the total unit cost of inventory
above the expected sales price. The net realisable value
adjustment has been included in ‘Changes in inventories’ in the
statement of comprehensive income. Total net realisable value
adjustments recorded periodically through the year was $31.2
million (pre-tax).
The Company’s balance sheet contains items that have been
subject to impairment testing during the year.
When the Company assesses CGUs for recoverability, 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 CGU, with recoverability being
determined based on discounted cash flow modelling of a set of
probability weighted strategic outcomes.
The Company has concluded through detailed impairment testing
that the Ranger CGU and Jabiluka Undeveloped Property are not
impaired.
It is reasonably possible that outcomes within the next financial
year that are different from the current assumptions around future
market prices, resource and development potential, discount rate
and rehabilitation, capital and production costs, could require
a material adjustment (increase or decrease) to the carrying
amount of the Ranger CGU.
Market consensus uranium price and exchange rate forecasts
are determined by surveying a sample of brokers and financial
institutions to gather their estimation of both the long term
uranium price and AUD/USD exchange rate.
The fair value less costs of disposal method under Australian
Accounting Standard 136 centres on determining the fair value
of the Company’s CGUs being the price that would be received
to sell an asset in an orderly transaction between market
participants at measurement date. In this context, the Company
considers that the fair value of the Ranger CGU includes option
value for the Ranger 3 Deeps project on the basis that it is
possible that the Ranger 3 Deeps mine is able to be developed
in the future subject to achieving an Authority extension. This
assessment represents a substantial reduction in the probability
of pursuing development of Ranger 3 Deeps relative to the
assessment performed at 31 December 2014 where a high
probability was assigned.
Estimates and judgements associated with the Jabiluka
Undeveloped Property are disclosed in Note 12.
82
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
3
Revenue
REVENUE FROM CONTINUING OPERATIONS
Sale of goods
Rendering of services
Total sales revenue
Other revenue
Interest received/receivable, other parties
Rent received
Compensation uranium oxide received
Contract compensation
Net gain on sale of property, plant and equipment
Total other revenue
Total revenue from continuing operations
2015
$’000
2014
$’000
332,669
378,955
108
211
332,777
379,166
8,493
10,662
829
-
6,161
-
15,483
862
9,415
-
1,693
22,632
348,260
401,798
83
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
4
Expenses
LOSS BEFORE INCOME TAX INCLUDES
THE FOLLOWING SPECIFIC EXPENSES:
Cost of sales
Produced product (uranium oxide)
Purchased product (uranium oxide)
Total cost of sales
Depreciation
Mine land and buildings
Plant and equipment
Total depreciation
Amortisation
Mine properties
Rehabilitation asset
Total amortisation
NOTES
2015
$’000
2014
$’000
294,101
247,912
-
66,933
294,101
314,845
3,298
81,592
84,890
8,199
18,844
27,043
2,176
82,165
84,341
4,766
30,870
35,636
Total depreciation and amortisation expenses
111,933
119,977
22
22
4,070
13,838
17,908
1,341
20,690
22,031
(6)
538
292
5,417
1,705
8,749
-
5,024
3,505
11,918
15,423
1,219
28,082
29,301
(43)
-
58
7,097
22,790
83,205
14,227
5,795
Government and other royalties
Royalty payments
Payments to Indigenous interests
Total Government and other royalties
Financing costs
Other parties
Unwinding of discount (rehabilitation provision)
Total Financing Costs
Doubtful debts expense
Net loss on disposal of property, plant & equipment
Net foreign exchange loss/(gain)
Rental expense relating to operating leases
Research and development expenditure
Total exploration and evaluation expenditure
(including Ranger 3 Deeps exploration decline)
Expenditure related to plant recommissioning
Defined contribution superannuation expense
84
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
5
Income tax expense/(benefit)
INCOME TAX EXPENSE/(BENEFIT)
Current tax
Deferred tax
Under/(over) provided in prior years
Income tax expense/(benefit)
Deferred income tax (revenue)/expense included in income tax expense comprises:
Decrease/(increase) in deferred tax assets (Note 14B)
(Decrease)/increase in deferred tax liabilities (Note 14A)
Deferred tax
RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX PAYABLE
Operating loss before income tax
Tax at the Australian tax rate of 30% (2014: 30%)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Derecognition of deferred tax assets
R&D tax concession
Amortisation
Rehabilitation expenditure
Other items
Income tax under/(over) provided in prior years
Income tax expense/(benefit)
AMOUNTS RECOGNISED DIRECTLY IN EQUITY
Aggregate current and deferred tax arising in the
reporting period and not recognised in net profit or loss
but directly debited or (credited) to equity
Net deferred tax asset (Note 14B)
2015
$’000
2014
$’000
-
-
195,331
(85,814)
364
12
195,695
(85,802)
197,573
(2,242)
195,331
(70,641)
(15,173)
(85,814)
(79,798)
(273,602)
(23,940)
(82,081)
219,667
(1,705)
5,653
-
(2,278)
9,261
(4,348)
(10,721)
4
364
5
12
195,695
(85,802)
23
72
85
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
6
Dividends
Dividends paid or declared
No dividends have been paid or declared for the year ended 31 December 2015 (2014: nil).
Dividends franking account
Franking credits available for subsequent financial years
based on a tax rate of 30% (2014: 30%)
2015
$’000
2014
$’000
234,095
234,095
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for franking credits that
will arise from the payment of the amount of the provision for income tax as applicable.
The ability to utilise the franking account credits is dependent upon there being sufficient available profits to declare dividends.
7
Cash and cash equivalents
CURRENT
Cash at bank and in hand
Deposits at call
Cash and cash equivalents
2015
$’000
2014
$’000
3,640
361,686
365,326
6,188
287,130
293,318
Cash at bank/Deposits at call
Cash assets and deposits bear floating interest rates between 0.0 per cent and 3.3 per cent (2014: 0.0 per cent and 2.8 per cent).
Interest rate risk exposure
The Company’s exposure to interest rate risk is discussed in Note 28.
8
Trade and other receivables
CURRENT
Trade debtors
Other debtors
Provision for impairment
Net other debtors
Trade and other receivables
2015
$’000
2014
$’000
17,427
9,222
3,013
-
3,013
20,440
2,016
(6)
2,010
11,232
Impairment of receivables
No trade receivables are past due. There is no impairment of trade receivables.
Other debtors 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 expected to be settled
during the 12 months subsequent to balance date.
86
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Foreign exchange and interest rate risk
The Company operates internationally but is primarily exposed to foreign exchange risk arising from currency exposures with respect
to the US dollar.
A summarised analysis of the sensitivity of trade and other receivables to foreign exchange and interest rate risk can be found in
Note 28.
Fair value and credit risk
Due to the short-term nature of trade and other receivables, their carrying amount approximates their fair value.
The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above.
The Company does not hold any collateral as security. Refer to Note 28 for more information on the financial risk management policy
of the Company.
9
Inventories – current
Stores and spares
Ore stockpiles at cost
Work in progress at cost
Work in progress at net realisable value
Finished product U3O8 at net realisable value
Total current Inventory
2015
$’000
16,923
36,337
6,879
-
2014
$’000
19,787
35,835
-
710
72,811
90,227
132,950
146,559
Inventory expense
Obsolescence of inventory provided for and recognised as an expense during the year ended 31 December 2015 amounted to
$1,351,475 (2014: nil).
Write-downs of inventories to net realisable value recognised as an expense during the year ended 31 December 2015 amounted to
$31,220,392 (2014: $47,605,931 ). The expense has been included in ‘Changes in inventories’ in the statement of comprehensive
income.
10 Other assets
Prepayments
11
Inventories – non-current
Ore stockpiles at cost
2015
$’000
480
2014
$’000
1,392
2015
$’000
2014
$’000
49,673
85,728
87
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
12 Undeveloped properties
Jabiluka: Long-term care and maintenance development project
Balance brought forward
Amount capitalised during the year
Total undeveloped properties
2015
$’000
2014
$’000
203,632
203,632
-
-
203,632
203,632
Undeveloped properties are considered an asset not yet ready for use. The recoverable amount of the undeveloped properties is
determined using the fair value less cost to sell method.
Fair value less cost to sell has been determined using a discounted cash flow model. Key assumptions to which the model is most
sensitive include:
uranium prices;
foreign exchange rates;
production and capital costs;
discount rate; and
•
•
•
•
• Ore Reserves and Mineral Resources.
In determining the value assigned to each key assumption, management has used external sources of information and has utilised the
expertise of external consultants to validate entity-specific assumptions such as costs, production techniques and Mineral Reserves.
Further, the Company’s cash flow forecasts are based on estimates of future uranium prices, which assume market prices will revert
to the Company’s assessment of the long term average price, generally over a period of three to five years.
The recoverable amount is dependent on the development and life of the ore body together with the term and continuity of the mining
lease. It reflects expected future cashflows contained in the long term asset plan with an adjustment of cashflows expected to take into
account project development risk. The Company has projected cashflows for the period of the current mining lease, together with a
ten year renewal period.
The Jabiluka Mineral Lease is currently under long-term care and maintenance. The Company has agreed that future mining
development will not occur without the consent of the Mirarr Traditional Owners. It is uncertain that this consent will be forthcoming
and, by extension, that the Jabiluka deposit will be developed. Should this consent not eventuate in the future, the Jabiluka
Undeveloped Property would face full impairment.
The discount rate applied to the future cash flow forecasts represent an estimate of the rate the market would apply having regard to
the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted.
88
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
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 2015
Opening net book amount
7,494
Additions
Disposals
Change in estimate
Transfers
Depreciation/amortisation charge
Closing net book amount
Cost
-
-
-
-
(3,298)
4,196
110,845
Accumulated depreciation/amortisation
(106,649)
Net book amount
YEAR ENDED 31 DECEMBER 2014
Opening net book amount
Additions
Disposals
Change in estimate
Transfers
Depreciation/amortisation charge
Closing net book amount
Cost
4,196
9,994
-
(324)
-
-
(2,176)
7,494
110,845
Accumulated depreciation/amortisation
(103,351)
Net book amount
7,494
296,674
11,906
(785)
-
-
(81,592)
226,203
1,161,122
(934,919)
226,203
367,884
11,590
(635)
-
-
(82,165)
296,674
1,150,001
(853,327)
296,674
16,468
37,849
-
-
-
-
(8,199)
8,269
421,700
(413,431)
8,269
-
-
2,317
-
(18,844)
21,322
358,485
11,906
(785)
2,317
-
(111,933)
259,990
336,713
2,030,380
(315,391)
(1,770,390)
21,322
259,990
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
Assets under construction
The carrying amounts of the assets disclosed above include the following expenditure recognised in relation to property, plant and
equipment which is in the course of construction:
Plant and equipment
2015
$’000
4,956
2014
$’000
5,969
89
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
14 Deferred tax assets
(A) DEFERRED TAX LIABILITY
The balance comprises temporary differences attributable to:
Amounts recognised in profit and loss
Investment in trust fund
Undeveloped properties
Inventories
Receivables
Other
Total deferred tax liabilities
Off-set of deferred tax asset pursuant to set-off provisions (Note 14B)
Net deferred tax liabilities
Movements
Opening balance at 1 January
(Credited)/debited to the income statement (Note 5)
Under provided in prior years credited to the income statement
Closing balance at 31 December
(B) DEFERRED TAX ASSETS
The balance comprises temporary differences attributable to:
Amounts recognised in profit and loss
Tax losses
Research and development tax offset
Property, plant and equipment
Rehabilitation
Employee provisions
Other
Amount recognised directly in equity
Transaction costs
Share benefits
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions (Note 14A)
Net deferred tax assets
Movements
Opening balance at 1 January
Credited to the income statement (Note 5)
(Under)/over provided in prior years credited to the income statement
Credited to equity (Note 5)
Closing balance at 31 December
90
2015
$’000
2014
$’000
20,497
23,405
16,203
771
-
20,025
23,405
22,175
1,014
-
60,876
66,619
(39,785)
(66,619)
21,091
-
66,619
(2,242)
(3,501)
60,876
83,212
(15,173)
(1,420)
66,619
-
-
14,697
20,523
3,656
909
127,222
33,915
4,119
69,736
4,060
1,919
39,785
240,971
-
-
719
(444)
39,785
241,246
(39,785)
(66,619)
-
174,627
241,246
172,109
(197,573)
(3,865)
(23)
70,641
(1,432)
(72)
39,785
241,246
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
15
Investment in Trust Fund
NON-CURRENT
Trust Fund
2015
$’000
2014
$’000
68,324
66,751
Trust Fund
The Ranger Rehabilitation Trust Fund holds a restricted fixed term investment in the form of bank bills which mature and are
reinvested periodically. The applicable weighted average interest rate for the year ended 31 December 2015 was 2.93 per cent (2014:
3.33 per cent).
16 Payables
CURRENT
Trade payables
Amounts due to related parties
Other payables
Total payables
17 Provisions – current
CURRENT
Employee benefits
Rehabilitation
Total current provisions
Movements in provisions
Movements in the rehabilitation provision during the financial year are set out below:
2015
Carrying amount at the start of the year
Payments
Transfer from non-current provision
Carrying amount at the end of the year
2015
$’000
2014
$’000
47,832
1,497
810
48,870
5,833
918
50,139
55,621
2015
$’000
2014
$’000
9,012
30,946
39,958
9,345
31,207
40,552
REHABILITATION
$’000
31,207
(26,538)
26,277
30,946
91
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
2014
Carrying amount at the start of the year
Payments
Transfer from non-current provision
Carrying amount at the end of the year
18 Provisions – non-current
NON-CURRENT
Employee benefits
Rehabilitation
Carrying amount at the end of the year
Movements in provisions
Movements in the rehabilitation provision during the financial year is set out below:
2015
Carrying amount at the start of the year
Change in estimate
Unwinding of discount
Additional provisions recognised
Transfer to current provision
Carrying amount at the end of the year
2014
Carrying amount at the start of the year
Change in estimate
Unwinding of discount
Additional provisions recognised
Transfer to current provision
Carrying amount at the end of the year
92
REHABILITATION
$’000
78,388
(56,977)
9,796
31,207
2015
$’000
2014
$’000
3,175
477,575
480,750
4,188
480,845
485,033
REHABILITATION
$’000
480,845
2,317
20,690
-
(26,277)
477,575
REHABILITATION
$’000
525,076
(74,242)
28,082
11,725
(9,796)
480,845
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
19 Share capital
SHARE CAPITAL
A Class shares fully paid
Total contributed equity
2015
SHARES
2014
SHARES
517,725,062
517,725,062
2015
$’000
706,485
706,485
2014
$’000
706,485
706,485
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of shares held.
On a show of hands every holder of ordinary shares present at a shareholders’ meeting in person or by proxy, is entitled to one vote,
and upon a poll each share is entitled to one vote.
Capital risk management
Details of the Company’s exposure to risks when managing capital are set out in Note 28.
20 Reserves and retained profits
RESERVES
Share-based payments reserve
Capital reconstruction
Total Reserves
Movements
Share-based payments reserve
Balance 1 January
Option expense
Balance 31 December
Capital reconstruction
Balance 1 January
Movements
Balance 31 December
RETAINED PROFITS
Movements in retained profits were as follows:
Opening retained earnings – 1 January
Net loss for the year
Dividends paid
Closing retained earnings/(accumulated losses) – 31 December
2015
$’000
2014
$’000
251
389,500
389,751
418
389,500
389,918
418
(167)
251
1,033
(615)
418
389,500
389,500
-
-
389,500
389,500
(350,796)
(162,996)
(275,493)
(187,800)
-
-
(626,289)
(350,796)
Nature and purpose of reserves
The share based payments reserve is used to recognise the fair value of equity instruments issued to employees but not exercised.
93
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Capital reconstruction reserve
In June 1995, the Company reduced its share capital by cancelling $0.95 of the capital paid up on each issued share and reducing the
par value of each issued share from $1.00 to $0.05. The cancelled capital (comprising $389,500,000 in total) was credited to a Capital
Reconstruction Reserve. The Company has the ability to distribute capital to shareholders from this reserve.
21 Contingencies
Contingent liabilities
Legal actions against the Company:
The remaining argument in the action listed in the Federal Court against the former Commonwealth Minister for Resources and 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, 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 liability disclosed above.
22 Commitments
Capital commitments
Capital expenditure contracted for at the reporting date is as follows:
Within one year
Lease commitments
Future operating lease rentals not provided for in the financial statements and payable:
Commitments in relation to leases contracted for at the reporting
date but not recognised as liabilities, payable
Within one year
Later than one year but not later than five years
Total operating leases
2015
$’000
7,160
2014
$’000
50,051
2015
$’000
2014
$’000
1,365
4,073
5,438
1,753
4,821
6,574
The Company leases property, plant and equipment under operating leases expiring 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
Future mineral tenement lease payments not provided for in the financial statements and payable:
Within one year
Later than one year but not later than five years
Later than five years
Total mineral tenement leases
2015
$’000
146
583
534
2014
$’000
138
609
711
1,263
1,458
In order to maintain current rights of tenure to mining tenements, the Company will be required to outlay an amount of $145,730 in the
year ending 31 December 2016 in respect of tenement lease rentals.
94
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
The Company is liable to make payments to the Commonwealth as listed below:
(i)
(ii)
(iii)
An annual amount equal to the sum payable by the Commonwealth to the Northern Land Council pursuant to the Section
44 Agreement for rent for the duration of the agreement. This amounts to $968,672 for 2015 and is indexed for future years.
Amounts equal to the sums payable by the Commonwealth to the Aboriginal Benefits Reserve pursuant to a determination
under Section 63(5) (b) of the Aboriginal Land Rights (Northern Territory) Act 1976. The Company is required to pay 2.5 per
cent of Ranger net sales revenue to the Commonwealth and 1.75 per cent of Ranger net sales revenue to the Northern Land
Council or an entity representing the Mirarr Traditional Owners as directed by the Northern Land Council (amounts paid
during 2015: $13,837,954; 2014: $11,918,129).
Amounts equal to sums payable by the Commonwealth to the Northern Territory pursuant to an understanding in respect of
financial arrangements between the Commonwealth and the Government of the Northern Territory. These amounts are also
calculated as though they were royalties and the relevant rate is 1.25 per cent of Ranger net sales revenue (amounts paid
during 2015: $4,069,987; 2014: $3,505,332).
The Company is liable to make payments to the Northern Land Council pursuant to the Section 43 Agreement between Pancontinental
Mining Limited and Getty Oil Development Company Limited and the Northern Land Council dated 21 July 1982, which was assigned
to the Company with the consent of the Northern Land Council, as listed below:
(i)
(ii)
Up front payment of $3,400,000 on the commencement of production at Jabiluka.
Annual royalty payments calculated at 4.5 per cent of net sales revenue less $500,000 less any amounts paid to the
Aboriginal Benefits Reserve by the Commonwealth under the conditions specified in the mineral lease for the first 10
years and thereafter at 5 per cent of net sales revenue less any amounts paid to the Aboriginal Benefits Reserve by the
Commonwealth under the conditions specified in the mineral lease (refer commitment below).
The Company is liable to make payments to the Commonwealth in respect of the Jabiluka project pursuant to the conditions attached
to the mineral lease. The amount payable was, until 30 June 1990, calculated at the rate of 5.25 per cent of net sales revenue
from the Jabiluka project. The Jabiluka project is now under long term care and maintenance and will not be developed without the
approval of the Mirarr Traditional Owners.
23 Auditor’s remuneration
During the year the auditor of the Company earned the following remuneration:
AUDIT SERVICES
PricewaterhouseCoopers Australian firm
Audit and review of financial reports
Audit and review of financial reports (additional 2014 fees)
Audit related services
Total remuneration of PricewaterhouseCoopers Australia
2015
$’000
2014
$’000
345
108
100
553
310
40
-
350
95
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
24 Related parties
Directors
The names of persons who were Directors of the Company at any time during the financial year are as follows:
Peter Mansell (appointed 26 October 2015), Shane Charles (appointed 26 October 2015), Paul Dowd (appointed 26 October 2015),
Peter McMahon (resigned 20 June 2015), Helen Garnett (resigned 20 June 2015), Andrea Sutton, Peter Taylor (resigned 13 April
2015), John Pegler (resigned 13 April 2015), Joanne Farrell, Bruce Cox, David Smith (appointed 27 January 2015, resigned 20 June
2015) and Simon Trott (appointed 6 December 2015).
Information relating to Directors’ compensation, shareholdings and retirement benefits is set out in the Remuneration Report in the
Directors’ Report.
Key management personnel
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
2015
$’000
2,556
341
485
2014
$’000
3,151
363
478
3,382
3,992
In compliance with Corporations Regulations 2001 2M.3.03 the Company has provided detailed remuneration disclosures in the
Director’s Report. The relevant information can be found in the Remuneration Report on pages 45 to 60.
Loans with Directors and key management personnel
There were no loans with Directors or key management personnel during 2015 (2014: Nil).
Transactions with Directors and Director-related entities
There were no transactions with Directors or Director-related entities other than Rio Tinto Limited during 2015 (2014: nil). Details of
transactions with Rio Tinto Limited are outlined below.
Ultimate parent entity
The ultimate parent entity is Rio Tinto Limited. This interest is held through North Limited (incorporated in Victoria, Australia) which
has beneficial ownership of 68.4 per cent of the issued ordinary shares of the Company. North Ltd owns 34.1 per cent directly and the
remaining 34.3 per cent through its subsidiary, Peko-Wallsend Pty Ltd.
Interest income
Interest income is received from Rio Tinto Finance Ltd which holds cash on behalf of the Company.
96
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Transactions with related parties
The following transactions occurred with related parties:
Management services fees paid to ultimate parent entity:
Rio Tinto Group Companies
Consulting fees paid to:
Rio Tinto Group Companies
Other reimbursements paid for commercial services received:
Rio Tinto Group Companies
Amounts received from related parties:
Rio Tinto Group Companies – other
Rio Tinto Group Companies – interest
Dividends paid to:
Related parties – North Ltd
Related parties – Peko-Wallsend Pty Ltd
2015
$’000
2014
$’000
(1,600)
(1,600)
(3,186)
(9,153)
(18,676)
(85,718)
327,594
245,118
1,894
1,827
-
-
-
-
Consulting fees paid to Rio Tinto Group Companies relate to technical services for major projects.
Other reimbursements for commercial services include the purchase of uranium oxide at market price (2015: nil and 2014:
$66,933,276).
Amounts received from related parties include sales of uranium oxide at market price. In April 2014, the Company entered into a
marketing agreement with Rio Tinto Uranium on the basis that it represented superior value to the Company’s then existing marketing
agreements and the alternative marketing agreements considered. Under the new marketing agreement, uranium oxide produced by
the Company is sold to Rio Tinto Uranium and pooled with uranium oxide produced from the Namibian operation of Rössing Uranium
Limited, a related party of Rio Tinto plc.
Outstanding balances arising from sales/purchases of goods and services
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Aggregate amounts received from and payable to each class of other related parties at balance
date were as follows:
2015
$’000
2014
$’000
Current assets - cash assets
Related parties - Rio Tinto Finance Ltd
Current assets - receivables
Related parties - Rio Tinto Group Companies
Current liabilities - creditors
Related parties - Rio Tinto Group Companies
All related party transactions were conducted on arm’s length terms and conditions and at market rates.
172,621
102,531
16,248
6,066
1,497
5,833
97
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
25 Segment information
Description of segments
Management has determined the operating segment based on the reports reviewed by the Chief Executive that are used to make
strategic decisions.
The Chief Executive considers the business from a product prospective and has identified only one reportable segment in the year
ended 31 December 2015, being the mining, processing and selling of uranium. There are no other unallocated operations.
Primary reporting – business segments
The segment information provided to the Chief Executive for the reportable segment is as follows:
Revenue from external customers
Other revenue
Total segment revenue
Segment result
Income tax benefit/(expense)
Profit/(loss) 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
2015
$’000
2014
$’000
332,777
379,166
15,483
22,632
348,260
401,798
(79,798)
(273,602)
(195,695)
85,802
(275,493)
(187,800)
1,100,815
1,341,724
1,100,815
1,341,724
630,868
630,868
11,906
111,933
538
596,117
596,117
11,590
119,977
(1,693)
98
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Other segment information
Segment revenue
The revenue from external parties reported to the Chief Executive is measured in a manner consistent with that in the income
statement.
Revenues from external customers are derived from the sale of uranium. A breakdown of revenue and results is provided in the tables
below. 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 external customers in other countries is outlined in the table
below:
Asia
North America
Europe
Africa
Total revenue
SEGMENT REVENUES
FROM SALES TO
EXTERNAL CUSTOMERS
2015
$’000
332,669
-
-
-
2014
$’000
260,549
108,569
8,461
1,376
332,669
378,955
Segment revenues are allocated based on the country in which the customer is located. During 2014 the Company entered into a new
marketing agreement with Rio Tinto Uranium based in Asia. Details are disclosed in Note 24.
Segment assets
The amounts provided to the Chief Executive with respect to total assets are measured in a manner consistent with that of the
financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset.
Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories, property, plant
and equipment and other assets, net of provisions.
All assets of the Company as at 31 December 2015 are in Australia with the exception of inventories in transit or at converters of
$66,245,519 (2014: $60,084,720). All acquisitions of property, plant and equipment and other non-current assets occurred in Australia.
Segment liabilities
The amounts provided to the Chief Executive with respect to total liabilities are measured in a manner consistent with that of the
financial statements. These liabilities are allocated based on the operations of the segment. Segment liabilities consist primarily of
trade and other creditors, employee entitlements and provisions. The Company does not have any borrowings or derivative financial
instruments as at 31 December 2015.
99
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
26 Reconciliation of loss after income tax to net cash inflow/(outflow) from
operating activities
Loss for the year
Add/(less) items classified as investing/financing activities:
Net (gain)/loss on sale of non-current assets
Add/(less) non-cash items:
Depreciation and amortisation
Rehabilitation provision: unwinding of discount
Employee benefits: share based payments
Net exchange differences
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
(Increase)/decrease in other assets
(Increase)/decrease in investment in trust fund
(Decrease)/increase in payables
(Increase)/decrease in net deferred tax assets
(Decrease)/increase in provisions
Net cash inflow/(outflow) provided from operating activities
27 Earnings per share
Basic earnings per share
Diluted earnings per share
2015
$’000
2014
$’000
(275,493)
(187,800)
538
(1,693)
111,933
20,690
737
23
(9,208)
49,664
912
(1,573)
18,537
195,718
(27,884)
84,594
119,977
28,082
346
(1)
8,875
128,819
913
(2,791)
(1,981)
(85,730)
(61,007)
(53,991)
2015
CENTS
(53.2)
(53.2)
2014
CENTS
(36.3)
(36.3)
Earnings used in the calculation of basic and diluted earnings per share: 2015: ($275,493,403) (2014: ($187,799,509)).
Weighted average number of ordinary shares on issue used in calculation of basic earnings per share: 2015: 517,725,062 shares
(2014: 517,725,062).
Options
Options granted to employees under the share-based payment plans are for options in Rio Tinto plc and Rio Tinto Limited. Therefore,
the options have not been included in the determination of diluted earnings per share. Details relating to the options are set out in
Note 30.
100
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
28 Financial risk management
The Company carries out risk management under policies approved by the Board of Directors. The Board provides principles for
overall risk management, as well as written policies covering specific areas, such as mitigating interest rate and other risks, use of
derivative and non-derivative financial instruments.
The Company’s business is mining and not trading. Accordingly, the Company only contracts to sell uranium that it plans to produce,
however purchasing uranium for resale may be required in circumstances where actual production falls short of contractual sales
volumes. The Company operates entirely in Australia and is exposed primarily to Australian dollar denominated costs. Sales are
denominated in US dollars.
Market risk
Foreign exchange risk
The Company markets its products internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the US dollar. Foreign exchange risk arises from future commercial transactions and recognised assets and
liabilities that are denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis
and cash flow forecasting. It is not Company policy to hedge against foreign exchange risk.
The Company’s exposure to foreign currency risk at the reporting date was as follows:
Trade receivables
Trade payables
2015
USD
$’000
11,416
(2,371)
2014
USD
$’000
5,259
(466)
Group sensitivity
At 31 December 2015, had the Australian Dollar weakened/strengthened by 10 per cent against the US Dollar with all other variables
held constant, the change in trade receivables would have effected post-tax profit for the year by $1,097,182 higher/lower (2014:
$499,098 higher/lower).
At 31 December 2015, had the Australian Dollar weakened/strengthened by 10 per cent against the US Dollar with all other variables
held constant, the change in trade payables would have effected post-tax profit for the year by $227,837 higher/lower (2014: $39,805
higher/lower).
Commodity price risk
In the absence of uranium being traded on global futures exchanges, the Company uses a combination of both fixed and market price
related contracts for future sales to manage this exposure. No financial instruments are used by the Company to manage commodity
price risk.
Interest rate risk
The Company’s main interest rate risk arises from cash on deposit. When cash is surplus to operational and investing requirements it
is invested in lump sum deposits to maximise interest received. In addition, the Company is exposed to interest rate risk on cash in the
Ranger Rehabilitation Trust Fund.
Credit risk
The Company has policies in place to ensure that sales of products are made to customers with an appropriate credit history. Where
customers are rated by an independent credit rating agency, these ratings are used to set credit limits. If no independent rating
exists, the credit quality of the customer is subject to extensive assessment. Letters of credit and other forms of credit insurance are
also used as required. Derivative counterparties, cash transactions and cash invested through the Ranger Rehabilitation Trust Fund
are limited to high credit quality financial institutions. The Company has policies that limit the amount of credit exposure to any one
financial institution.
101
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
TRADE RECEIVABLES
AA
A
BBB
Other
Liquidity and capital risk
2015
$’000
-
17,427
-
-
2014
$’000
-
9,222
-
-
The Company’s objectives when managing capital are to safeguard the Company’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 equity ratio, but has a policy of maintaining a flexible financing structure to be able to
fund capital expenditure programmes, pay dividends and fund expansion opportunities as they arise. This policy is balanced against
the desire to ensure efficiency in the debt/equity structure of the Company’s balance sheet in the longer term through pro-active
capital management programmes.
The future liquidity and capital requirements of the Company will depend on many factors. Should current forecasts for foreign
exchange rate, prices, costs, resource and mining techniques not be realised, and in the absence of any other successful
developments, the Company may require an additional source of funding to fully fund the rehabilitation of the Ranger Project Area.
Any inability to obtain sufficient capital would have a material impact on the Company’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 (Trust Fund) is then determined. The Trust Fund includes both
cash and financial guarantees.
The Company’s ability to continue to access the financial guarantees can be influenced by many factors including future cash balance,
cash flows and shareholder support. Should one or more of the financial guarantees be withdrawn at any time and the Company is
unable to access replacement guarantees, substantial additional cash would be required to be deposited into the Trust Fund. In a
scenario where this occurs the Company’s cash resources available to fund operations would reduce.
The Company has plans in place to address these risks.
The Company currently has no debt and $433 million in total cash resources (comprising $365 million of cash on hand or at call (Note
7) and $68 million invested as part of the Trust Fund (Note 15)). No debt covenants exist.
Fair value estimation
The carrying value less impairment provision of trade receivables and payables is a reasonable approximation of their fair values due
to the short-term nature of these amounts.
102
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
29 Events occurring after the reporting period
No matters or circumstances have arisen since the end of the financial year that have significantly affected, or may significantly affect
the operations or state of affairs of the Company in subsequent financial years.
30 Share-based payments
ERA participates in a number of share-based payment plans administered by Rio Tinto plc and Rio Tinto Limited, which are described
in detail in the Remuneration Report. These plans have been accounted for in accordance with the fair value recognition provisions of
AASB2, ‘Share-based Payment’, which means that AASB2 has been applied to all grants of employee share-based payments that had
not vested as at 1 January 2004.
Performance Share Plan
The Performance Share Plan (PSP) was revised in 2013 with details listed in the Remuneration Report.
The fair value awards granted under the PSP have been calculated at their dates of grant using a Monte Carlo valuation model
which takes into account the Total Shareholder Returns (TSR) performance conditions. No forfeitures are assumed. The awards are
accounted for in accordance with the requirements applying to equity-settled sharebased payments transactions.
A summary of the status of shares granted under the share plan at 31 December 2015, and changes during the year, is presented
below:
BALANCE
AT START
OF THE
YEAR
GRANTED
DURING
THE YEAR
TRANSFERS
IN/(OUT)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
VESTED AND
EXER-
CISABLE AT
END OF
THE YEAR
2015
Rio Tinto Limited
Weighted average fair value
at grant date
Rio Tinto plc
Weighted average fair
value at grant date
2014
Rio Tinto Limited
Weighted average fair value
at grant date
Rio Tinto plc
Weighted average fair value
at grant date
8,592
$43.00
-
£-
11,843
$52.36
979
£34.25
-
-
-
-
-
-
-
-
(356)
(1,333)
(483)
6,420
1,831
$44.79
$62.26
$62.26
$37.45
$44.79
-
£-
-
£-
-
£-
-
-
-
-
49
(2,473)
(827)
8,592
1,816
$39.13
(405)
$75.81
(430)
$75.81
(144)
£31.28
£36.35
£36.35
$43.00
$62.26
-
-
-
-
The weighted average share price at the date of exercise of rights to shares exercised during the year ended 31 December 2015 was
$59.09 (2014: $65.91).
The weighted average remaining contractual life of rights to shares outstanding at the end of the period was 2 years (2014: 3 years).
Where shares are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these shares.
103
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Share Option Plan
The Share Option Plan was discontinued in 2013 and as such no awards were made. It is policy to settle these awards in equity,
although the participants at their discretion can be offered a cash alternative. The awards are accounted for in accordance with
the requirements applying to equity-settled share-based payment transactions. The performance conditions in relation to Total
Shareholder Return (TSR) have been incorporated in the measurement of fair value for these awards by modelling the correlation
between Rio Tinto‘s TSR and that of the index. The relationship between Rio Tinto‘s TSR and the index was simulated many
thousands of times to derive a distribution which, in conjunction with the lattice-based option valuation model, was used to determine
the fair value of the options. Expected volatilities are based on the historical volatility of Rio Tinto’s share return.
A summary of the status of options granted under the plan at 31 December 2015, and changes during the year, is presented below:
BALANCE
AT START
OF THE
YEAR
4,896
$49.87
7,383
$43.90
1,186
£16.53
GRANTED
DURING
THE YEAR
TRANSFERS
IN/(OUT)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
VESTED AND
EXERCIS-
ABLE
AT END OF
THE YEAR
-
-
-
-
-
-
-
-
-
-
(1,186)
£16.53
-
-
(2,487)
$32.17
-
-
-
-
-
-
-
-
-
-
4,896
$49.87
4,896
4,896
$49.87
$49.87
-
-
-
-
2015
Rio Tinto Limited
Weighted average
exercise price
2014
Rio Tinto Limited
Weighted average
exercise price
Rio Tinto plc
Weighted average
exercise price
The weighted average share price at the date of exercise of options exercised during the year ended 31 December 2015 was nil (no
options were exercised) (2014: $58.78).
The weighted average remaining contractual life of share options outstanding at the end of the period was 0 years (2014: 0 years).
Where options are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these options.
104
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Share Savings Plan
The Share Savings Plan was replaced with the myShare Savings Plan in 2013, and as such no awards were made in 2015. Awards
under these plans are settled in equity and accounted for accordingly. The fair value of each award on the day of grant was estimated
using a lattice-based option valuation model, including allowance for the exercise price being at a discount to market price. A summary
of the status of options granted under the plan at 31 December 2015, and changes during the year, is presented below:
BALANCE
AT START
OF THE
YEAR
13,777
$53.36
20,345
$54.62
2015
Rio Tinto Limited
Weighted average
exercise price
2014
Rio Tinto Limited
Weighted average
exercise price
GRANTED
DURING
THE YEAR
TRANSFERS
IN/(OUT)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
-
-
-
-
(3,545)
(5,444)
(2,664)
2,124
$54.21
$52.69
$51.80
$55.62
(2,689)
(2,371)
(1,508)
13,777
4,514
$50.18
$59.26
$58.08
$53.36
$48.73
VESTED
AND EXER-
CISABLE
AT END OF
THE YEAR
-
-
The weighted average share price at the date of exercise of conditional grants of shares exercised during the year ended 31
December 2015 was $52.12 (2014: $61.81).
The weighted average remaining contractual life of share options outstanding at the end of the period was 1 year (2014: 2 years).
Where shares are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these shares.
myShare Savings Plan
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 equity and accounted for accordingly. The fair value of each award on the day of grant is set equal to the share
price on the day of grant.
A summary of the status of options granted under the plan at 31 December 2015, and changes during the year, is presented below:
BALANCE
AT START
OF THE
YEAR
GRANTED
DURING
THE YEAR
TRANSFERS
IN/(OUT)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
VESTED
AND EXER-
CISABLE
AT END OF
THE YEAR
14,381
8,483
(768)
$58.25
$51.87
$56.53
7,850
8,233
(1,120)
$56.37
$59.63
$56.04
-
-
-
-
(5,163)
16,933
$57.45
$55.38
(582)
14,381
$56.34
$58.25
-
-
-
-
2015
Rio Tinto Limited
Weighted average
exercise price
2014
Rio Tinto Limited
Weighted average
exercise price
The weighted average share price at the date of exercise of conditional grants of shares exercised regularly during the year ended 31
December 2015 was nil (2014: nil).
The weighted average remaining contractual life of share options outstanding at the end of the period was 2 years (2014: 3 years).
Where shares are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these shares.
105
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Management Share Plan
The Management Share Plan was introduced in 2007 and is described in the Remuneration Report. The awards will be settled in
equity including the dividends accumulated from date of award to vesting. The awards are accounted for in accordance with the
requirements applying to equity-settled share-based payment transactions. The fair value of each award on the day of grant is set
equal to share price on the day of grant. No forfeitures were assumed. A summary of the status of shares granted under the share
plan at 31 December 2015, and changes during the year, is presented below:
BALANCE
AT START
OF THE
YEAR
GRANTED
DURING
THE YEAR
TRANSFERS
IN/(OUT)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
VESTED
AND EXER-
CISABLE
AT END OF
THE YEAR
2015
Rio Tinto Limited
Weighted average fair
value at grant date
2014
Rio Tinto Limited
Weighted average fair value
at grant date
Rio Tinto plc
Weighted average fair value
at grant date
16,478
6,193
(2,822)
(3,899)
$57.35
$54.49
$57.30
$58.83
16,001
7,460
(2,581)
(4,402)
$61.68
1,060
$61.04
$57.31
78
£40.58
£31.17
$79.41
(1,138)
£39.94
-
-
-
-
-
-
-
-
15,950
$55.88
16,478
$57.35
-
-
-
-
-
-
-
-
The weighted average share price at the date of exercise of conditional grants of shares exercised regularly during the year ended 31
December 2015 was $52.78 (2014: $62.53).
The weighted average remaining contractual life of conditional grants of shares outstanding at the end of the period was 2 years
(2014: 2 years).
The model inputs for conditional rights granted during the year ended 31 December 2015 included:
(a)
(b)
(c)
(d)
(e)
rights are granted for no consideration and have a three year life;
exercise price: nil (2014: nil);
grant date: 23 March 2015 (2014: 17 March 2014);
expiry date: 20 February 2018 (2014: 14 February 2017); and
share price at grant date: $55.88 (2014: $61.04).
Where shares are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these shares.
106
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Bonus Deferral Plan
The Bonus Deferral Award was established for the mandatory deferral of a specific percentage of the Chief Executive’s Short Term
Incentive Plan bonus payment into Rio Tinto shares. The vesting of these awards is dependent only on service conditions being met.
The awards will be settled in equity including the dividends accumulated from date of award to vesting. The awards are accounted for
in accordance with the requirements applying to equity-settled share based payment transactions. The fair value of each award on the
day of grant is equal to share price on the day of grant less a small adjustment for the timing of dividends vesting. No forfeitures are
assumed.
BALANCE
AT START
OF THE
YEAR
GRANTED
DURING
THE YEAR
TRANSFERS
IN/(OUT)
EXERCISED
DURING
THE YEAR
FORFEITED
DURING THE
YEAR
BALANCE
AT END OF
THE YEAR
VESTED
AND EXER-
CISABLE
AT END OF
THE YEAR
1,689
875
$57.15
$55.68
746
943
$53.11
$60.35
-
-
-
-
(844)
$53.11
-
-
-
-
-
-
1,720
$58.39
1,689
$57.15
-
-
-
-
2015
Rio Tinto Limited
Weighted average fair
value at grant date
2014
Rio Tinto Limited
Weighted average fair
value at grant date
The weighted average share price at the date of exercise of conditional grants of shares exercised during the year ended 31
December 2015 was $44.01 (2014: nil).
The weighted average remaining contractual life of share options outstanding at the end of the period was 2 years (2014: 2 years).
Where shares are issued to employees of subsidiaries within the Rio Tinto Group, the subsidiaries compensate the parent for the
amount recognised as expense in relation to these shares.
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense
were as follows:
Share based payment expense
2015
$’000
17
2014
$’000
418
107
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
DIRECTORS’ DECLARATION
In the Directors’ opinion:
(a)
the financial statements and notes set out on pages 71 to 107 are in accordance with the Corporations Act 2001 (Cth),
including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
giving a true and fair view of the Company’s financial position as at 31 December 2015 and of its
performance for the financial year ended on that date; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable. Note 1 (a) confirms that the financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive and the Chief Financial Officer required by section 295A of the
Corporations Act 2001 (Cth). This declaration is made in accordance with a resolution of the directors.
P Mansell
Perth
10 February 2016
108
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
109
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT
110
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
SHAREHOLDER INFORMATION
Energy Resources of Australia Ltd is a for-profit company limited by shares, incorporated and domiciled in Australia.
The financial statements were authorised by Directors on 10 February 2016. The Directors have the power to amend and reissue the
financial statements.
The shareholder information set out below was applicable as at 31 January 2016.
Distribution of equity securities
Analysis of numbers of registered equity security holders by size of holding:
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
ORDINARY SHARES
NUMBER
OF SHARE-
HOLDERS
% OF
SHARE-
HOLDERS
7,058
3,603
1,140
1,160
71
54.16
27.65
8.75
8.90
0.54
NUMBER
OF SHARES
2,457,811
9,336,271
8,568,469
30,015,302
467,347,209
13,032
There were 7,717 holders of less than a marketable parcel of ordinary shares.
100.00
517,725,062
Equity security holders
The names of the twenty largest registered holders of quoted equity securities are listed below:
Peko Wallsend Ltd
North Limited
HSBC Custody Nominees (Australia) Limited
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
J P Morgan Nominees Australia Limited
ABN AMRO Clearing Sydney Nominees Pty Ltd
National Nominees Limited
Ganra Pty Ltd
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
John E Gill Trading Pty Ltd
Merrill Lynch (Australia) Nominees Pty Limited
Mr Leon Arharidis and Mrs Kiveli Arharidis
Bainpro Nominees Pty Limited
UBS Nominees Pty Ltd
MC Cormick Tyre Service Pty Ltd
Mr Kien Tuong Ta
Pershing Australia Nominees Pty Ltd
Mrs Junxian Li
NUMBER
OF SHARES
177,535,718
176,543,136
77,350,319
8,364,137
7,896,653
4,248,224
1,097,518
866,747
651,429
627,658
627,188
531,000
375,675
366,000
358,110
337,890
331,777
325,000
308,906
289,700
% OF
ISSUED
SHARES
0.47
1.80
1.66
5.80
90.27
100.00
% OF
ISSUED
SHARES
34.29
34.10
14.94
1.62
1.53
0.82
0.21
0.17
0.13
0.12
0.12
0.10
0.07
0.07
0.07
0.07
0.06
0.06
0.06
0.06
111
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Entitlements to vote
Subject to any rights or restrictions for the time being attached to any shares on a show of hands, every member present in person or
by proxy or by attorney or by representative and entitled to vote at a shareholders’ meeting shall have one vote.
On a poll, every member present in person or by proxy or by attorney or by representative shall have one vote for each share held by
him/her.
Annual General Meeting
The next Annual General Meeting will be held at 9:30am on Wednesday 4 May 2016 in Darwin, Northern Territory, Australia.
Tax file numbers
Tax file numbers or exemption details are recorded from shareholders who wish to provide the information. Dividend advice
statements, when issued to shareholders, indicate whether or not a shareholder’s tax file number has been recorded. ERA normally
pays fully franked dividends. In the event of an unfranked dividend being paid, ERA will be required to deduct tax at the top marginal
rate from the dividend paid to shareholders resident in Australia who have not supplied a tax file number or exemption form.
Information on shareholding
Shareholders who require information about their shareholding or dividend payment should contact ERA’s principal registry.
Shareholders who have changed their address should advise the change in writing to:
ERA Share Registry
Computershare Investor Services Pty Ltd
117 Victoria Street
West End QLD 4101
Telephone: +61 (0) 3 9473 2500
Facsimile: +61 (0) 3 9415 4000
Sponsored shareholders should note, however, that they should contact their sponsored broker to initiate a change of address.
112
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
2015 ASX ANNOUNCEMENTS
07 Dec 2015 Appointment of Director
29 Oct 2015
Outcome of Impairment Review
25 Oct 2015
Appointment of Directors
15 Oct 2015
Update on Ranger Authority Extension
13 Oct 2015
September 2015 Quarterly Operations Review
08 Oct 2015
Response to ASX Price Query
30 Jul 2015
Half Year Results June 2015
30 Jul 2015
Interim Report - 30 June 2015
22 Jul 2015
Write Down of Deferred Tax Assets
10 Jul 2015
June 2015 Quarter Operations Review
10 Jul 2015
Ranger 3 Deeps Resource Update
22 Jun 2015
Resignation of Independent Directors
12 Jun 2015
Ranger 3 Deeps Project - Further Update
11 Jun 2015
Ranger 3 Deeps Project Update
14 Apr 2015
14 Apr 2015
2015 Annual General Meeting Chairman’s
Address
2015 Annual General Meeting Chief
Executive’s Address
13 Apr 2015
Resignation of Directors
10 Apr 2015
March 2015 Quarterly Operations Review
16 Feb 2015
Annual Report Release
09 Feb 2015
Financial Presentation Full Year Results
06 Feb 2015
Full Year Results 2014
06 Feb 2015
Annual Statement of Reserves & Resources
06 Feb 2015
Final Report - Appendix 4E
13 Jan 2015
December 204 Quarter Operations Review
Details of these announcements are available at www.energyres.com.au.
113
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
TEN YEAR PERFORMANCE
YEAR ENDED 31
DECEMBER
Sales Revenue ($000)
Earnings Before Interest
and Tax ($000)
Profit/(Loss) Before Tax
($000)
Income Tax Expense/
(Benefit) ($000)
Profit/(Loss) After Tax
($000)
Total Assets ($000)
Shareholders’ Equity ($000)
Long Term Debt ($000)
Current Ratio
Liquid Ratio
Gearing Ratio (%)
Interest Cover (times)
Return on Shareholders’
Equity (%)
Earnings Per Share (cents)
Dividends Per Share (cents)
Payout Ratio (%)
Share Price ($) closing
Price-Earning Ratio
Dividend Yield (%)
Net Tangible Assets per
Share ($)
No. of Employees
Profit After Tax per
Employee ($000)
Ore Mined (million tonnes)
Ore Milled (million tonnes)
Mill Head Grade (% U3O8)
Mill Recovery (%)
Production (tonnes U3O8) –
Drummed
Sales – Ranger Concen-
trates (tonnes U3O8)
Sales – Other Concentrates
(tonnes U3O8)
Sales – Total (tonnes U3O8)
Note 1
Post rights issue
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
332,777 379,166 356,139 396,629 651,381 572,283 768,297 496,359 357,080 312,698
(88,292) (284,274) (199,431) (278,266) (220,633)
47,726 374,737 317,957 108,012
68,745
(79,798) (273,602) (186,541) (254,785) (206,340)
59,427 382,053 312,569
98,366
62,247
195,695 (85,802)
(50,712)
(36,026)
(52,741)
12,423 109,479
90,784
22,277
18,640
47,004 272,574 221,785
(275,493) (187,800) (135,829) (218,759) (153,599)
43,607
1,100,815 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
469,947 745,607 934,022 1,069,619 1,288,536 951,076 966,574 758,926 606,021 552,491
-
3.6
2.1
-
6.3
-
7.1
6.0
-
(177.9)
-
4.0
2.9
-
(156.7)
-
1.8
1.0
-
7.79
-
3.4
2.1
-
47.8
-
3.1
2.2
-
33.5
-
4.1
2.7
-
-
-
4.0
3.0
-
-
-
3.8
2.3
-
-
-
1.5
0.8
-
5.6
76,089
(58.6)
(53.2)
-
-
0.36
(0.68)
-
0.91
374
(25.2)
(36.3)
-
-
1.30
(3.58)
-
(14.5)
(26.2)
-
-
1.26
(4.81)
-
1.44
389
1.80
519
(20.5)
(42.3)
-
-
1.27
(3.00)
-
2.07
594
(736.6)
-
2.5
0.10
82.0
(482.8)
-
1.3
0.11
81.5
(264.8)
-
2.3
0.15
84.8
(374.5)
3.8
2.6
0.17
86.2
(11.9)
(29.7)1
-
-
1.23
(2.54)
-
2.49
567
(270.9)
1.2
1.6
0.18
87.9
4.9
24.6
8.0
32
11.13
45.24
2.96
4.99
523
89.87
1.4
2.4
0.19
87.2
31.6
142.9
39.0
27
23.89
16.72
1.42
5.07
521
29.2
116.3
28.0
24
19.00
16.34
1.47
3.98
519
523.17
2.2
2.3
0.26
88.3
427.33
3.5
2.0
0.30
88.2
13.1
39.9
20.0
28
19.50
48.88
1.03
3.20
419
181.6
2.9
1.9
0.31
88.2
8.0
22.9
17.0
74
20.80
90.98
0.82
2.90
385
113.3
3.3
2.0
0.26
87.5
2,005
1,165
2,960
3,710
2,641
3,793
5,240
5,339
5,412
4,748
2,183
2,164
2,767
2,665
3,258
4,373
5,497
5,272
5,324
5,760
-
984
48
558
2,183
3,148
2,815
3,223
1,908
5,167
653
–
–
–
–
5,026
5,497
5,272
5,324
5,760
Definition of statistical ratios
Current Ratio
Liquid Ratio
foreign exchange
Gearing Ratio
Interest Cover
Return on Shareholders’ Equity
Earnings per Share
=
=
=
=
=
=
current assets/current liabilities
(current assets-inventory-prepayments-foreign exchange hedge asset on borrowings)/(current liabilities-bank overdraft –
hedge liability)
(long term debt + term creditors)/(shareholders’ equity + long term debt + term creditors)
earnings before interest and tax/interest expense
profit after tax/average shareholders’ equity
profit after tax/weighted average number of shares issued
114
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
INDEX
2015 Announcements
2015 ERA Ore Reserves and Mineral Resources
2016 Objectives
Auditor’s Independence Declaration
Balance Sheet
Business Strategy
Cash Flow Statement
Chairman’s Report
Chief Executive’s Report
Community
Company Overview
Corporate Governance Statement
Director’s Declaration
Director’s Report
Employment
Environment
Financial Performance
Future Supply
Health and Safety
Independent Auditor’s Report
Land
Notes to the Financial Statements
Operating and Financial Review
Operations
Radiation monitoring
Regulatory Framework
Sales and Marketing
Shareholder Information
Statement of Changes in Equity
Statement of Comprehensive Income
Sustainablily Report
Ten Year Performance
113
18
6
63
72
12
74
4
5
35
3
64
108
38
33
28
7
16
21
109
32
75
7
10
22
23
20
111
73
71
25
114
115
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
NORTHERN
TERRITORY
KAKADU
NATIONAL PARK
(19,803 sq km)
Oenpelli Road
MUDGINBERRI
DARWIN
GUNBALANYA
Arnhem Highway
JABILUKA
RANGER
JABIRU
Arnhem Highway
PINE CREEK
KATHERINE
PARK
HEADQUARTERS
JABIRU
JABILUKA
MINERAL
LEASE
(73 sq km)
RANGER
PROJECT
AREA
(79 sq km)
Ranger
Uranium Mine
(500 ha)
Head Office
Level 3, Energy House
18-20 Cavenagh Street
GPO Box 2394
Darwin NT 0801
Tel: +61 (0) 8 8924 3500
Fax: +61 (0) 8 8924 3555
www.energyres.com.au
Ranger Mine
Locked Bag 1
Jabiru NT 0886
Registered Office
Energy Resources of Australia Ltd
c/ Mallesons Stephen Jacques
Level 5, NICTA Building B
7 London Circuit
Canberra City ACT 2601
116
ENERGY RESOURCES OF AUSTRALIA LTD SUSTAINABILITY DEVELOPMENT REPORTFINANCIAL REPORT2015 ANNUAL REPORT
Printed using green electricity and to the highest international environmental standards on
100% recycled paper made from 60% post consumer and 40% post industrial waste fibre.
ANNUAL
REPORT
2015
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
5