Rio Tinto Group, the world’s second-biggest mining company, expects to take a writedown of about $300 million after an Australian uranium producer it controls canceled plans to expand a mine.
Energy Resources of Australia Ltd. is halting efforts to expand the Ranger 3 Deeps project in the Northern Territory, London-based Rio said Thursday in a statement.
Energy Resources said the decision was based on the poor uranium market, coupled with studies concluding Ranger 3 would require operations to extend beyond beyond 2021 when an existing access agreement with local authorities expires. Rio Tinto owns 68 percent of the Darwin-based mining company.
“After careful consideration, Rio Tinto has determined that it does not support any further study or the future development of Ranger 3 Deeps due to the project’s economic challenges,” Rio said in the statement.