Monsters of Rock: Two and a half years on from Juukan Gorge, Rio reaches deal to support traditional owner fund

Rio Tinto strikes agreement to support ‘Juukan Gorge Legacy Foundation’
TerraCom focuses on shareholder returns after massive coal price run
Lithium stocks tumble as miners take a hit on China turmoil

The Juukan Gorge disgrace, in which Rio Tinto (ASX:RIO) blew up a rock shelter containing Aboriginal artefacts stretching back 46,000 years, could prove to be a major turning point in relations between Indigenous people and mining companies.

The tragedy, acknowledged as such by Rio’s current leadership and responsible for the resignations of a string of senior executives including former CEO Jean-Sebastien Jacques in 2020, has forced the revision of mine plans and could result in changes to heritage laws after a Federal Government response to an inquiry into the debacle last week.

One group displeased with the response was the PKKP people, traditional owners of the land where Rio destroyed Juukan Gorge, who complained that they weren’t consulted before the Albanese Government released its response to the inquiry.

Today, however, signs of a mend in the relationship between the Puutu Kunti Kurrama and Pinikura people and Rio’s top brass have emerged.

The PKKP Aboriginal Corporation has come to terms on an agreement with Rio Tinto to create a Juukan Gorge Legacy Foundation.

Neither party is releasing the financial terms, but the agreement will see Rio provide financial support to the foundation for ‘major cultural and social projects, including a new keeping place for storage of important cultural materials’.

“We fell far short of our values as a company and breached the trust placed in us by the PKKP people by allowing the destruction of the Juukan Gorge rock shelters,” said Rio CEO Jakob Stausholm.

“As we work hard to rebuild our relationship, I would like to thank the PKKP people, their elders, and the Corporation for their guidance and leadership in forming this important agreement.”

Rio Tinto (ASX:RIO) share price today:

TerraCom may sell South African operations

Coal prices are sky high at the moment amid a global energy shortage, making even modest miners into some of the biggest movers on the ASX in 2022.

One of those is TerraCom (ASX:TER), up 286% this year to a market cap of ~$620 million, and now a regular quarterly dividend payer, two years after junior coal stocks looked tenuous amid post-pandemic coal prices.

They are now upwards of US$350/t, with the Blair Athol coal miner presenting forecasts at its AGM today that the Newcastle coal price will average a profit-spinning US$276/t on the seaborne market out to December 2025.

The big focus for coal producers now, struggling to get approvals in an ESG-wary world to expand or open new mining fronts, is returns to shareholders.

And the message from TER chairman Graeme Campbell to shareholders at the AGM today is that will continue, with an on-market buyback under consideration and the company plotting to continue doling out 60-90% of NPAT to investors on a quarterly basis.

The immediate focus is “maximising output” at Blair Athol. TerraCom produced 452,000t at Blair Athol, near the town of Clermont, in the September quarter, an annualised rate of 1.81Mtpa.

In South Africa it produced 1.889Mt (7.56Mt annualised), with 928,000t attributable to TER on an equity basis. Despite higher production, the South African operations are far less profitable, with the bulk of the tonnes sold into the domestic market.

Campbell said TER is “actively considering the South African operations”.

“Our minority held offshore operations in South Africa continue to perform well and we are now well versed in repatriating funds from South Africa back to Australia,” he said.

“The operations support themselves from a cashflow point of view and we have agreed on a regular dividend program with our BBEEE (black economic empowerment) partner over there.

“The Board is actively considering the South African operations to determine an
optimum position, which may include a sale if favourable terms can reasonably be achieved.

“The company’s outlook on the coal market remains positive and we look forward to continuing to achieve production targets to meet already agreed sale commitments to our customers.”

Coal miners were among the few winners in a turbulent resources market today as lithium stocks were hammered along with industrial metals like iron ore on the back of civil unrest and rising Covid cases in China.

Lithium miners like Liontown Resources (ASX:LTR), Pilbara Minerals (ASX:PLS), Mineral Resources (ASX:MIN), IGO (ASX:IGO), Core (ASX:CXO), Sayona (ASX:SYA), Lake (ASX:LKE) and Allkem (ASX:AKE) copped losses of between 5-11%, compounded by recent broker notes predicting lithium prices were due to fall from their recent top in the coming years.