Wednesday, 23 May, 2007

by Lindsay Murdoch and Barry Fitzgerald
The Age

RIO Tinto's hard sell this week on its rising hopes for a near-term clearance from the Mirarr people to develop the $50 billion Jabiluka uranium deposit in the Northern Territory has backfired on the Anglo-Australian mining giant.

The Mirarr continue to say no, despite the multimillion-dollar royalty stream Jabiluka would secure them.

Rio wants to cash in on the uranium boom by developing Jabiluka, and the group's energy chief executive, Preston Chiaro, told the market earlier this week there were good reasons to believe the leader of the Mirarr, Yvonne Margarula, would say "yes". But Ms Margarula's OK is not forthcoming.

The Gundjeihmi Aboriginal Corporation, which represents the Mirarr people, made clear last night that their opposition to reopening Jabiluka was unchanged.

The corporation will today release a statement saying the Mirarr people are "extremely distressed" at the interpretation that Rio has put on their relations with ERA, the Rio subsidiary that owns Jabiluka and the nearby Ranger uranium mine.

Rio's comments are "injurious" of the relationship, the statement will say.

Gundjeihmi will also say that the Mirarr people are disappointed that Jabiluka has become the subject of renewed public speculation.

Should the statement also confirm the Mirarr's continuing objections to the development of Jabiluka, Rio could be forced to backtrack on uranium production projections it made in a presentation to London investors on Monday.

The uranium presentation was part of Rio's defence against a low-ball takeover bid emerging, with chief financial officer Guy Elliott saying the $US90 billion ($A110 billion) group was intent its "value was understood in the market".

The Mirarr have long been opposed to Jabiluka's development, even if it would secure them a multimillion-dollar royalty stream (4.5 per cent of net revenue, rising to 5 per cent after 10 years, was previously agreed).

At the London presentation, Mr Chiaro said that Rio's relationship with the Mirarr had "improved dramatically in the past two years".

Mr Chiaro's comments were said by NT observers to have surprised the Mirarr and were at odds with the softly, softly manner in which ERA's Darwin head office had been managing the development stand-off.

Ms Margarula has for years strongly opposed reopening Jabiluka (it was being developed up until the federal Labor government ban in 1983), telling a federal parliamentary inquiry in 2005 that uranium mining had "completely upturned our lives, bringing greater access to alcohol and many arguments between Aboriginal people, mostly about money".

"We stopped the mining here," Ms Margarula told BusinessDay, referring to an eight-month blockade of the mine by 5000 people in 1998.

"Now they have put the ore back in the ground … it will never again come out. The county is at peace and I am very happy."

Rio closed 31¢ higher yesterday at $92.60.