An independent board committee from ERA, which is 86.33% owned by Rio Tinto, engaged Grant Thornton and SRK Consulting to determine the fair value, to set an offer price for a forthcoming interim entitlement offer.
That offer, announced on July 28, seeks to raise about $300 million for planned Ranger rehabilitation works until the end of 2023.
With no pre-commitments for any entitlements at an initial price of 22.5c per share, the committee proposed an issue of shares at a 10-15% discount to the prevailing share price.
The committee raised the possibility of Rio Tinto increasing its shareholding in ERA to above 90%, which would allow it to compulsorily acquire all the remaining ERA shares it does not own in accordance with the requirements of the Corporations Act.
However, Rio Tinto objected the IBC's proposed discount on the basis it did not reflect fair value and appointed the independent experts to come up with a fairer figure.
In a statement, Rio Tinto said the terms of any ERA funding solution should reflect fair value having regard to material cost overruns and interim funding requirements.
"The funds raised will be dedicated strictly to rehabilitation and not any future development," the company said.
The statement said Traditional Owners, the Mirarr people had consistently publicly stated opposition to developing the adjacent Jabiluka uranium deposit, which was not given due weight in the report.
"In Rio Tinto's view, the independent valuation report prepared by Grant Thornton and adopted by the IBC to help set the price for a future entitlement offer, fails to appropriately recognise the longstanding opposition of the Mirarr people to further uranium mining on their country, which Rio Tinto understands causes distress for the Mirarr elders and community," Rio Tinto said.
Rio Tinto CEO Kellie Parker said the company was actively seeking to reflect the wishes of the Mirarr people in its approach to the funding of ERA's rehabilitation commitment, having long understood their opposition to further mining on their country.
"We believe the successful rehabilitation of the Ranger project area, which is of critical importance to the Mirarr people, Rio Tinto and ERA, can be achieved in a way that is consistent with the Mirarr people's wishes," she said.
"This remains our utmost priority and commitment."
Parker said once again, Rio Tinto was asking the ERA IBC to urgently develop a workable plan to fund the increased rehabilitation costs.
