Australia: Areva suing over Kakadu

Date of publication: 
25 September 2014

French government-controlled Areva – the world’s biggest nuclear company – is understood to be planning legal action against the Australian government over a decision last year to veto mining at its multibillion-dollar Koongarra uranium deposit by including it in the Kakadu National Park.

The claim has the potential to open up the Commonwealth to a payment of hundreds of millions of dollars.

Last March, the Senate passed a bill reversing the exclusion of Areva’s Koongarra uranium deposit from the Kakadu National Park, removing the possibility of future uranium mining there.

The decision was pushed through under the former Labor federal government but was politically uncontroversial and passed the Senate with bi-partisan support. Both major parties committed to the move during the 2010 federal election campaign sparking an angry response from Areva.

At the time Areva said it would seek legal advice over a possible infringement of its property right.

Areva, based in Paris, would not respond directly to questions on whether it was planning legal action, but said it was examining its options following the government’s decision.

“Areva has not yet had any engagement with the federal government nor has the situation changed significantly since the Koongarra Project Area was leased to the Commonwealth in February 2013,” Areva told The Australian Financial Review.

“As this project was part of Areva’s business investments in Australia, we are currently examining the options available to us following this action, in line with normal business practices.”

It was understood the action would be lodged against the Commonwealth in the Federal Court and Areva could attempt to tap a special Commonwealth fund set up for aggrieved parties.

It was understood Areva would seek, at a minimum, to cover its costs on the Koongarra project, which it bought in 1995, and might also sue for compensation for lost earnings, exposing the government to a payment of several hundred million dollars.

The Koongarra uranium project covered 12.5 square kilometres and contained about 14,500 tonnes of uranium at an average grade of 0.8 per cent uranium oxide. It was discovered in 1970 by Canadian-owned Noranda Australia.

Depressed uranium prices recovered to $US36.50 a pound this week, their highest levels since July last year. Prices reached heights of $US138 a pound in June 2007 but crashed after the Fukushima nuclear disaster in 2011 in Japan and had been under pressure since. Analysts suggested the market would be in surplus until about 2021.

Areva, which drew about 20 per cent of its revenues from uranium production and had mines in Canada and Niger, was among the big players to have expressed confidence in a price rebound.

Last year’s Senate bill repealed the Koongarra Project Area Act 1981, which excised Koongarra from the Kakadu National Park in the Northern Territory.

At the time, Mr Burke said “mining will be prohibited forever” at Koongarra.

It followed a successful request in 2011 by the Labor government to the World Heritage Committee to expand the World Heritage-listed Kakadu National Park to include land that held the Koongarra deposit. At the time, Areva was understood to have lobbied the Australian government to drop its request.

Areva had also run into grief with the traditional owners of the land, who, rather than take a big payout from the French group, offered the land to the government for inclusion in Kakadu.

The deposit sat near the tourist attraction Nourlangie Rock, a sacred site for traditional owners.

Areva also told Business Day that “we have been a pioneer in uranium exploration and discovery in Australia since the 1960s and are committed to supporting its future development in the country”.

Former Areva boss Anne Lauvergeonwas appointed to the Rio board this year.

A spokesman for Industry Minister Ian Macfarlane said any legal action was a matter for the company.