(Bloomberg) -- Energy Resources of Australia’s chairman is to resign after biggest shareholder Rio Tinto Group called for his departure over a disagreement about the future of a uranium mine.

London-based Rio said on Monday that Peter Mansell should step down after cost overruns at the northern Australia mine, which ERA owns and was in the process of closing, as well as ERA’s support of proposals to resume uranium production at the site against the wishes of Indigenous groups.

Shortly after the announcement ERA said Mansell would resign as chairman, along with non-executive directors Paul Dowd and Shane Charles, once funding for the mine’s expensive rehabilitation program had been secured. 

Rio had been informed of the directors’ planned resignation last week, ERA said. 

ERA last week published an independent report arguing that uranium could still be mined at the Ranger project despite opposition from the local Mirarr People. Rio, which owns around 86% of the small mining firm, is largely funding the closure and rehabilitation of the Northern Territory mine. 

The resignations come as Rio attempts to restore its reputation following the decision to blow up ancient Indigenous rock shelters at Western Australia’s Juukan Gorge in 2020, which led to the the company’s chief executive officer and other senior executives stepping down.

“Our utmost priority and commitment is to the rehabilitation of the Ranger Project Area in a way that is consistent with the wishes of the Mirarr People,” Rio Tinto’s head of Australia Kellie Parker said in the statement. 

ERA said in February that closing the site, which neighbors the World Heritage-listed Kakadu National Park, would cost as much as A$2.2 billion ($1.4 billion), above an earlier estimate of A$973 million.



(Updates with resignation in first paragraph)

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