Boss Energy withdraws bid for Rio-owned ERA’s mining lease

The news: Uranium miner Boss Energy has withdrawn a takeover bid for the troubled Energy Resources of Australia following the Northern Territory government’s decision to reject its mining lease renewal for the Jabiluka deposit.

The numbers: ERA, which entered a trading halt on Friday, confirmed it had received a $550 million indicative offer for the mining lease at Jabiluka but said the proposal was withdrawn on Sunday following the NT government announcement. ERA shares are up nearly 5% to 3.35 cents each in early trading on the ASX.

The context: The NT government said on Friday it would not grant any mineral title over the Jabiluka area once ERA's lease ends next month. ERA, which is 86%-owned by mining giant Rio Tinto, had applied to extend the lease for another 10 years.

The company finished processing uranium at the Ranger mine site mine in 2021 and is due to complete the clean-up of the site by 2028 at a total cost of more than $2.4 billion. The Jabiluka deposit, located 230 kilometres east of Darwin, has long been controversial because it is surrounded by the world heritage-listed Kakadu National Park and has a history of environmental incidents.