Energy Resources of Australia board cops lashing from uranium bull Willy Packer in Jabiluka fallout

Cottesloe-based fund manager Willy Packer has unleashed on the Energy Resources of Australia board and accused Traditional Owners of breaching agreements linked to the now-scrapped Jabiluka uranium lease.

The managing director of Packer & Co penned a scathing open letter airing “grave concerns” over the management of the company, and their purported lack of gusto in doing something about the Northern Territory Government’s move to reject a renewal of the Jabiluka deposit’s lease last Friday.

Mr Packer’s $2 billion Investigator Trust tipped about $80 million into ERA over the past four years as part of a long-term bet that uranium’s price resurgence and a growing pro-nuclear sentiment would prompt a reassessment of the undeveloped site.

With the likelihood of that happening now hinging at best on a change of Government, Mr Packer has argued he and other minority investors invested in ERA because there was a “fully enforceable agreement with the Mirarr compelling them to support an extension of the Jabiluka lease”.

About 8 per cent of the Investigator Trust was tied up in uranium investments as at June.

“To the best of our knowledge, ERA has always respected this agreement. We cannot say the same for the Mirarr, who appear to have repeatedly breached the LTCMA (Long Term Care & Maintenance Agreement) whilst ERA stood idle,” Mr Packer wrote to the board.

“Packer & Co has asked you on multiple occasions to respond to the apparent breaches of the LTCMA and you and your fellow directors did nothing. As a result, ERA is now in this predicament.”

Traditional owners had been firmly opposed to the mining of Jabiluka, located near ERA’s closed Ranger uranium mine in the environmentally sensitive Kakadu National Park.

Rio Tinto is a majority investor in ERA with about 86 per cent, and in-turn had only been pinning the development’s future on whether the Mirrar approved it or not. There are several ERA executives listed as having been former employees of Rio Tinto.

Mr Packer claimed the mining giant had been “forcing its will” on the ERA board “without regard” for the interests of minority shareholders. He also argued mining Jabiluka would be “no different” to Rio’s mining near WA’s Karijini National Park.

“Like a wizard with his wand, Rio Tinto is diverting the public’s attention to the wonderful job they are doing rehabilitating the small Ranger mine whilst pulling the rabbit from the hat, being the annual extraction of over 1000 million tonnes of iron ore and waste from the fringes of Western Australia’s iconic Karijini National Park.”

“ERA has promoted Jabiluka to shareholders . . . the directors must act transparently and take immediate actions to protect the interests of all ERA’s 9000-plus minority shareholders who invested on that promise.”