OF A

UST

RALI

A

Ener

gy

Further Contact

Energy Resources of Australia LtdABN 71 008 550 865Level 10, TIO Centre24 Mitchell Street, DarwinNT 0800, AustraliaPhone (08) 8924 3500

Fax (08) 8924 3555

For further informationcheck the ERA website atwww.energyres.com.au

A member of theRio Tinto Group

Social and EnvironmentReport 2003

Ranger MineLocked Bag 1, JabiruNT 0886, AustraliaPhone (08) 8938 1211Fax (08) 8938 1203

1

Chief Executive of ERA,Mr Harry Kenyon-Slaney

Sydney Office - Marketing120 Christie StreetSt LeonardsNSW 2065, AustraliaPhone (02) 9467 9811Fax (02) 9467 9800

Reso

urce

s

Introduction

The year 2003 saw major achievements for ERA inenvironmental management and stakeholder relations, andthe decision to relocate ERA’s head office to Darwin (fromSydney) was a further sign of the company’s determinationto strengthen its role in the Northern Territory, home of itsmining operations.

ERA continued its record of careful environmental management,and maintained its commitment to protecting the neighbouringKakadu National Park. Towards this aim, ERA achieved certificationin 2003 for its environmental management system under theinternationally recognised ISO 14001 process. This was achieved18 months ahead of the planned schedule.

Jabiluka, one of the largest undeveloped uranium deposits in theworld, remains a valuable asset for the company. An agreementfor long term care and maintenance was forged between ERA andthe Mirarr Traditional Owners in 2003, and was approved by theNorthern Land Council in early 2004. This agreement recognises thecontinued existence of the mineral lease and allows for futuredevelopment at an appropriate time, but only with the support ofthe Traditional Owners. In accordance with the proposed agreement,ERA backfilled the underground workings at Jabiluka in 2003,removed infrastructure and completed site preparation forlong-term care and maintenance.

The Jabiluka negotiations led to an improved dialogue with theAboriginal community, and the company is working in several forumswith the Mirarr’s representatives to plan for the future of the region.

2

The Jabiru Region Sustainability Project, a cooperative venturebetween ERA, the Mirarr people, the Northern Land Council,and several State and Commonwealth government agencies,proved a valuable forum for discussion of the region’sfuture, including issues such as land tenure, regionaldevelopment, and economic opportunities. This project, withits many research and community development programs,will become the Kakadu Community Developmentservice from July 1, 2004.

ERA operates its Ranger mine under strict regulation byCommonwealth and Territory authorities. During 2003,discussions continued with the Northern Land Council, theregion’s peak Aboriginal group, in relation to royalty andother payments under an agreement pursuant to Section44 of the Aboriginal Land Rights (Northern Territory) Act.During 2003 ERA paid $7.6 million in royalties from its Rangeroperation to the Commonwealth Government. This moneyis ultimately distributed to Northern Territory basedAboriginal groups. In addition, in 2003 ERA paid $2.2 millionin royalties to the Commonwealth government fordistribution to the Northern Territory government. ERA haspaid a total of $199 million in all royalties since the Rangeroperation began in 1980. During 2003, social paymentstotalling $200,000 were made under the terms of anagreement over Jabiluka. Payments under JabilukaAgreements now total $7.5 million.

With its commitment to the Rio Tinto Child HealthPartnership, the company has invested in a five-year programto boost the health of Indigenous children in the NorthernTerritory, working with the Federal and Territory governmentsand medical researchers.

The company is firmly committed to the safety of all itsemployees. ERA’s safety performance has still not met thecompany’s goal, which is to eliminate all injuries and risksto health at ERA. A range of new initiatives was launchedearly in 2004 to achieve this goal.

Ranger Water Incident

While this report describes activities in 2003, it is appropriateto mention an incident with significant social andenvironmental implications that took place as this reportwas in preparation, and which has affected our employeesand stakeholders.

At the Ranger mine, during the evening of March 23, theprocess water system was erroneously connected to thesystem that supplies drinking and showering water. Drinkingwater became progressively mixed with process water thatcontained elevated levels of salts and metals, includinguranium. The problem was identified early the next morningand operations were shut down immediately, with all non-essential staff and contractors asked to leave site. Stakeholdersand regulators were informed.

An associated impact of the incident was that some of themixed water overflowed from a storage tank at Jabiru East.It has subsequently been confirmed by the SupervisingScientist that this caused no adverse impact on theenvironment and thus was not a risk to the local communities.

The company deeply regrets the incident and the distresscaused to the 28 people who have reported symptoms afterhaving showered in or drunk some of the water. The advicereceived to date is that anyone exposed to the affectedwater is unlikely to suffer any long-term health effect.Medical tests are continuing and the company hasundertaken to provide whatever future medical supportmay be deemed necessary to those affected.

In conjunction with the regulators, the water systems werevigorously flushed and the water continually re-sampledand tested. Operations were restarted progressively as anumber of short and longer-term criteria were met to thesatisfaction of the company and the regulators. Specificlonger term initiatives include a comprehensive assessmentof maintenance systems and an independent review of theintegrity of all operational and management systems andprocesses.

The water incident has placed strong pressure on thecompany’s relations with stakeholders, and we acknowledgethe concerns and worries this incident has caused. On thepositive side, stakeholder dialogue has remained strongduring this difficult period, with many meetings anddiscussions on other important issues continuing as normal.I am confident that the company can recover from thisincident, to build on the positive social and environmentalachievements of 2003.

Harry Kenyon-SlaneyERA Chief Executive

Introduction continued

3

Contents

Introduction

ERA in the Northern Territory

The community around us

Highlights of ERA’s community involvement 2003

What is the future for the region?Jabiru Region Sustainability Project

Exploding myths about Jabiru

Jabiluka long term care and maintenance

Aboriginal groups

Stakeholder Consultation

Payments to Aboriginal and other interests

Aboriginal employment and training

How do we look after our unique surrounds?

ISO 14001

Earth Water Life Sciences

People: our most important resource

2003 Key measurements

Radiation

ERA PoliciesEnvironment PolicySafety and Health Policy

1-2

4

4

5

6

7

8

9

9

10

10

11

12

12

13

14

15

16

4

ERA in the Northern Territory

• World-renowned Aboriginal culture and heritage.

• Internationally famous World Heritage listedNational Park.

• One of the world’s richest uranium provinces.

These are the unique geological, social and environmentconditions that make Energy Resources of Australia’soperations in the Kakadu/West Arnhem region of theNorthern Territory so challenging, and rewarding.

ERA is the world’s third largest uranium-producing company.Since 1980, the Company has mined uranium ore to produceuranium oxide at the Ranger Mine, 260 kilometres east ofDarwin. ERA sells its products to power utilities in Japan,South Korea, Europe and North America under strictinternational safeguards.

The company aims to produce uranium oxide from its Rangeropen pit and ore stockpiles until at least 2011. ERA also holdstitle to the Jabiluka deposit, north of Ranger. The Jabilukaproject is currently under long-term care and maintenance.

The Ranger Project Area and the Jabiluka Mineral Lease arelocated on Aboriginal land, surrounded by the World Heritagelisted Kakadu National Park.

Conditions for mining on Aboriginal land are laid down inAgreements with the representative body, the NorthernLand Council, under the terms of the Aboriginal Land RightsAct (NT) Act 1976.. The Northern Territory Government isresponsible for the day to day regulation of the Ranger mineunder the Mining Management Act.

The Commonwealth Minister for Industry, Tourism andResources has regulatory functions and the Atomic EnergyAct and the Supervising Scientist has specific environmentalresponsibilities under the Environment Protection (AlligatorRivers Region) Act.

ERA’s operations are serviced by the town of Jabiru,established principally as a mining town, but nowaccommodating many other people, organisations andbusinesses.

[ERA is a 68.4 per cent owned subsidiary of Rio Tinto Ltd, adiversified resource Group, and has a management servicesagreement with Rio Tinto Ltd.]

The community around us

The town of Jabiru, with a resident population of 1164, isadministered through the Jabiru Town Development Act1978 (NT) by the Jabiru Town Development Authority (JTDA),a statutory body responsible to the Northern TerritoryMinister for Local Government. As Jabiru is also within theKakadu National Park it is regulated by the Commonwealth’sEnvironment Protection and Biodiversity Conservation Act1999, and the Kakadu National Park Plan of Management.

Municipal services within the town are provided by theJabiru Town Council (JTC) which was established in 1984under the Jabiru Town Development Act. Since thattime the JTDA, which was established to "develop andmanage the town of Jabiru", has gradually delegatedresponsibility for almost all of its local governmentservice functions to the JTC.

The JTDA's vision is to develop Jabiru as an economicallydiversified town administered by an autonomous localgovernment council, providing facilities to supporttourism as well as the commercial and administrativeneeds of the region.

The land on which the town of Jabiru is located is ownedby the Commonwealth Director of National Parks. However,the town is subject to a native title claim by the MirarrTraditional Owners. ERA supports an outcome that recognisesAboriginal ownership while providing security of tenure forexisting businesses and services. ERA, through the town ofJabiru and the Ranger mine has been a strong supporter ofboth the local and Territory community. ERA plays a role inmany community groups and forums.

ERA’s operations are also part of a broader community madeup of the Kakadu National Park, and the Aboriginal landsof the West Arnhem and Alligator Rivers region. The companyplays a part in sponsoring educational, cultural and sportingevents in this region, as well as endeavouring to recruitemployees from this wider area.

With the move of ERA’s head office to Darwin in early 2004,the company intends to play a greater role in the NorthernTerritory’s community affairs.

5

Highlights of ERA’s communityinvolvement 2003

Jabiru Town Council

In 2003, three ERA employees were represented on theJabiru Town Council, two were popularly elected bytownsfolk, including the Chairman of the Council, Bob Povey.The company had one designated representative on thecouncil, Jody Rowe.

Gunbang Action Group

The company was represented at the regular meetings ofthe Gunbang Action Group which was set up in 1996 tooversee alcohol management issues in the region. The charterof the group is to reduce alcohol related problems in theKakadu/West Arnhem region. The group has several goals,including placing effective controls on the availability ofalcohol, providing a range of appropriate preventativeservices, and establishing measures to reduce risks associatedwith particular drinking environments.

Indigenous Mining Enterprise Task Force

In 2003 the company was a regular attendee of the Territory’sIndigenous Mining Enterprise Task Force, coordinated bythe Indigenous Mining Industry Services branch of theNorthern Territory’s Department of Business, Industry andResource Development. The IMETF is a forum to exchangestrategic ideas and practices with the aim of increasingindigenous employment and training in the mining industry.

Wind Festival

This regular event in Jabiru is an opportunity for the entirecommunity to celebrate its unique World Heritage culture.In 2003, ERA supported the festival both in kind, financially,and in the large numbers of participants. For the first time,the Gundjeihmi Aboriginal Corporation hosted ademonstration of basket weaving by local indigenous artistsand those from the broader region, followed by a barbecuewhich included magpie geese, a local delicacy. Jabiru schoolchildren performed at the event and there were many localstalls and activities. In the evening the singer Paul Kellyappeared, among other bands.

Meeting between Board Chairmanand Traditional Owners

ERA holds its Operations Review Committee and BoardMeeting at the Ranger operation each September. In 2003the Board Chairman, Mr Brian Horwood, and the then ChiefExecutive Officer, Mr Bob Cleary, met senior TraditionalOwner Ms Yvonne Margarula, and other indigenous peoplewith responsibilities to the land. After lunch, a group ofthe indigenous people and their representatives visited theJabiluka site, along with Board members and companyrepresentatives, to see the backfill and relatedworks in progress.

Jabiluka Day

On November 1, the Traditional Owners held a celebrationin Jabiru to mark the backfill and related works the companyhad undertaken at Jabiluka. Senior Traditional Owner YvonneMargarula spoke, as did Mr Mandawuy Yunupingu fromthe Yothu Yindi band, Labor Senator Trish Crossin, andseveral others involved in environmental and communityactivities. ERA General Manager, Mr Matt Coulter, alsoaddressed the crowd which was made up of former protestersagainst Jabiluka, mining staff, indigenous and non-indigenous townspeople, and others. The company hasundertaken not to go ahead with mining operations atJabiluka without the support of the Traditional Owners,leading to a better dialogue with the company’s keystakeholder.

Lofty Bardayal Nadjamerrek Exhibition

From June 25 - 19 July Western Arnhem Land artist LoftyBardayal Nadjamerrek held an exhibition at the AnnandaleGalleries in Sydney. The exhibition was this artist’s first soloexhibition and attracted widespread interest in the artworld. His works are represented in major public institutionsin Australia and overseas. ERA was proud to assist withtravel and accommodation costs. Mr Nadjamerrek wasrecently made an Officer in the Order of Australia awards.

6

Aboriginal All Stars

Following its co-sponsorship of the Australian RulesAboriginal All Stars versus Collingwood match in 1993, thecompany, in partnership with Rio Tinto, again welcomedthe opportunity to support the ATSIC Chairman's AboriginalAll Stars football match held in Darwin in February 2003.Attracting a record crowd of 17,500 spectators from acrossthe Northern Territory, the Aboriginal All Stars’ speedand skill were too much for Carlton as they posteda 73-point victory.

The Syd Jackson Rio Tinto Cup and winning medals werepresented to the All Stars by ERA chairman, Brian Horwood,following the All Stars’ victory. With the assistance of thecompany, 40 children from the Jabiru Area School and tensupervising adults attended the match and a barbecue withAFL legendary players, Ron Barassi and Steven Silvagni.

Rio Tinto Child Health Partnership

In October 2003 ERA pledged $125,000 over five years tothe $5.2 million Rio Tinto Child Health Partnership aimedat improving the health of indigenous communities bytackling pre-natal health problems.

This partnership brings together the Federal and NorthernTerritory governments, indigenous people, and businessgroups to improve health of indigenous children.

The initiative will build a clear picture of indigenous childhealth problems, through better data collection, and willencourage healthier pregnancies in indigenous women,through reducing exposure to smoking and alcohol.

The partnership also aims to improve indigenous participationin health care, to reinforce the message that healthierpregnancies mean healthier babies.

The initiative came from 2003 Australian of the year, ProfessorFiona Stanley, of Perth’s Telethon Institute for Child HealthResearch. Three working groups have been set up withinthe Northern Territory Department of Health and CommunityServices to oversee the partnership.

What is the future for the region?

Jabiru Region Sustainability Project

Over the next few years some important decisions need tobe made about Jabiru – the service town to ERA’s uraniumoperations in the Northern Territory.

Although set up as a mining town, Jabiru is now hometo many local Aboriginal families, including the MirarrTraditional Owners of both the Ranger and Jabilukamining leases.

Jabiru also has a special status as part of the Kakadu NationalPark World Heritage Area, and is home to many FederalGovernment employees, parks officials and rangers, and adestination focus of thousands of tourist visits each year.

With Ranger operations currently on schedule to end in2011, ERA is facilitating discussions on what the future holdswhen mining ceases.

In early 2003, ERA sponsored the establishment of the JabiruRegion Sustainability Project (JRSP), in partnership with themany decision-making bodies involved in determining thefuture of Jabiru. These include the Territory andCommonwealth governments, Traditional Owners, ParksAustralia North, and the Northern Land Council.

The JRSP enables all stakeholders to collect, share andconsider information to make the right decisions about thefuture of Jabiru and the region it serves.

Among the JRSP’s tasks are to advise on how to securecommercial interests, recognise traditional ownership, reformlocal governance, maintain services and facilities, celebrateand respect local Aboriginal culture, protect the environment,and maintain World Heritage values, effectively communicatewith the region, establish local businesses, improveemployment opportunities and support local youth.

The JRSP Working Group has agreed to establish a websiteso that regional information can be made available to thepublic – in English and Gundjeihmi, the language of thelocal Traditional Owners.

The JRSP is coordinated by Mathew Fagan – law graduate,community development worker and resident of Jabiru since1998. In late 2003 Mr Fagan set up an office in Jabiru tocarry this work forward. He has published a series of usefulresearch papers on the region, and assisted the establishmentof local businesses and community programs.

A comparison of regional population figures

Total population

Indigenous

Non-indigenous

NU

MB

ER

OF

PE

OP

LE

LOCATION/REGION

Jabiru Kakadu Kunbarllanjnja

1200

1000

800

600

400

200

0

7

Exploding myths about Jabiru

In his ongoing series of articles in the Jabiru newspaper(The Jabiru Rag), Matt Fagan, coordinator of the JabiruRegion Sustainability Project, sets the record straighton Jabiru.

The population of Jabiru, Kakadu,and the West Arnhem region

One of the most common set of misconceptions about Jabiruand Kakadu relates to the population of the region.

I have heard residents, visitors, tour operators andgovernment officials quote population figures for Jabiruranging from 800 to 2300. I've also been told that thepopulation is 'dropping' or 'increasing' at dramatic rates(usually at the same time!). Some researchers have furtherconfused the situation by quoting the 'total' figures andnot excluding the hundreds of domestic and internationalvisitors in the region on Census night.

So, let's lay some myths to rest once and for all. The latestfigures for 'estimated residents' (in June 2003) were releasedby the Australian Bureau of Statistics recently, and Jabiru'spopulation was recorded as 1164. This was a small dropfrom 1175 people in June 2002 and 1181 people inJune 2001.

Jabiru's population decline in 2002-2003 of 0.9 percent wasabove the Northern Territory average of 0.2 percent, butfar below Katherine's decline of 2.8 percent (or 288 people).

The last Census was conducted on a single night in August2001 across Australia. However, before we look at the resultsin more detail, a note of caution: Census data in remoteAboriginal communities is notorious for being incorrect.While the figures for Jabiru are probably accurate, thefigures for Kakadu could be 'wobbly' due to language andaccess difficulties on Census night. In addition, Aboriginalpeople quite often move in and out of Kakadu and WestArnhem, creating a highly variable population from oneseason to the next.

Nonetheless, the results for Jabiru and Kakadu are interestingand somewhat surprising.

The count for 'usual residents' of Jabiru on Census night in2001 was 1118 and the count for 'usual residents' in therest of Kakadu National Park was 479.

A common misconception somewhat debunked by theCensus figures is that Jabiru is 'white' and the rest of KakaduNational Park is 'black'. While there is a majority of non-Aboriginal people in Jabiru, there are also a significantnumber of indigenous residents. In 2001, the peopleidentifying as indigenous in Jabiru was 214 and the usualnon-indigenous population was 828. (A total of 77 peoplein Jabiru did not answer this question).

Perhaps even more surprisingly, the people identifying asindigenous in the rest of Kakadu was 207, and the non-indigenous population was 188 (although 77 people in therest of Kakadu did not answer this question). At first glance,the figure for 'usual resident' non-Aboriginal people outsideof Jabiru seems too high. Yet when one considers thepopulation of Kakadu ranger stations, the Border Store andresorts such as South Alligator and Cooinda (especially inthe month of August) the figure appears plausible. Inaddition, a survey conducted by the Djabulukgu Associationin 2001 recorded the Kakadu outstation population as 225,which is reasonably in line with the Census count.

Another myth that the Census seems to counter is that thereare only a few 'long-term' residents in Jabiru. In 2001, 403people had been in the area for at least 5 years (and afurther 72 people did not answer this question).

Jabiluka long term careand maintenance

Uranium was discovered at Jabiluka in the early 1970s. In1991 ERA purchased the Jabiluka mineral lease, adjoiningthe northern edge of the existing Ranger project area, fromPancontinental Mining Ltd. An agreement to develop thelease was reached with the Northern Land Councilrepresenting Aboriginal interests in 1982. Development was,however, delayed for a variety of reasons including at varioustimes, Aboriginal and environmental groups’ opposition,and Federal Government policies.

In 1997 ERA, then under the ownership of North Ltd, receivedpermission to proceed with Stage 1 of Jabiluka. Stage 1

8

On the other hand, some common views about thepopulation of Jabiru and Kakadu are confirmed by theCensus. For example, there are very few elderly peoplein the community.

In 2001, Jabiru had 264 children aged 12 or under; therewere 84 teenagers; there were 201 'twenty-somethings';255 'thirty-somethings'; 175 in the roaring forties; and102 in their fifties.

In contrast, there were only 37 people aged over 60.

In the rest of Kakadu National Park, there were 95children aged 12 or under; there were 37 teenagers;there were 102 'twenty-somethings'; 107 'thirty-somethings'; 55 in the roaring forties; and 50 in theirfifties (and 15 people did not give their age).

Sadly, in the rest of Kakadu National Park outside ofJabiru, there were only 18 people aged 60 or over andno person aged over 68.

The reasons for the lack of elders in Jabiru and Kakaduare probably twofold. First, it is very difficult to retainhousing in Jabiru unless one person in the family isemployed. Unfortunately, as people reach retirementage they (often reluctantly) leave the region. Second,it is a disturbing fact that Aboriginal people have amuch lower life expectancy than non-Aboriginal people- there are simply very few elderly Aboriginal peopleleft in Kakadu.

Interestingly, the population of Kunbarllanjnja (Oenpelli)is fast approaching that of Jabiru. In June 2001, theestimated resident population of Jabiru's closestneighbour was 940, up from 881 the year before. Whenone considers that Kunbarllanjnja's population probablyincreases in the wet season (as people come into townfrom West Arnhem outstations), it may already be thecase that Jabiru has a smaller population thanKunbarllanjnja at this time of year. Indigenous peoplemake up around 90 percent of Kunbarllanjnja’susual residents.

construction commenced in June 1998, but attracted heatedprotests from environmental and Aboriginal groups.Stage 1 construction was completed in September 1999, butagreement was not reached with Aboriginal groups forJabiluka ore to be trucked to Ranger for processing.Subsequently, a commitment was made to the WorldHeritage Committee that full scale commercial mining atJabiluka will only occur after the scaling down of productionat Ranger.

Relations between the company and the AboriginalTraditional Owners suffered during the Stage 1 constructionperiod. Rio Tinto acquired North Ltd in August 2000 andwith it assumed control of ERA. Senior Rio Tinto executiveshave made it clear that Jabiluka will not be developedwithout the support of Aboriginal Traditional Owners.

In 2003 ERA proposed a new regime for the long term careand maintenance of the Jabiluka site. This followeddiscussions held with Traditional Owners in 2002 in whichthey expressed environmental and cultural concerns withthe prevailing care and maintenance regime.

An agreement – the Jabiluka Long Term Care andMaintenance Agreement – was drafted to formalize thisunderstanding between ERA, the Northern Land Counciland the Mirarr Traditional Owners.

Although the agreement is still to be formally signed, inAugust 2003 ERA commenced backfilling the Jabiluka declineand undertook some other rehabilitation measures on thesite. ERA took this action for economic and environmentalreasons, as well as in response to the concerns of theTraditional Owners. These works were completed inDecember 2003.

The Northern Land Council approved the agreement inApril, 2004. This agreement relieves ERA of the annualDeed Poll payments in respect of Jabiluka and allows forfuture exploration on the Jabiluka lease. Importantly, ithas helped with building relationships with Mirarr TraditionalOwners of both Jabiluka and Ranger.

Environmental aspects of Jabilukalong term care and maintenance

The backfill and other rehabilitation measures weresuccessfully completed at Jabiluka between August andDecember 2003.

The works represent a significant reduction in the potentialenvironmental risk at the Jabiluka site. While comprehensivemonitoring has shown that the Stage 1 operations had notimpacted on the environment, ERA sought to apply bestpracticable technology to minimize environmental risks.The placement of the mineralized stockpile deepunderground, the cleaning of the interim water managementpond and placement of accumulated sediment deepunderground, and the backfilling of the remaining parts ofthe decline and box-cut with non-mineralised waste rock,has removed any environmental risk in the area.

9

Djabulukgu Association

The Djabulukgu Association was formed in 1982 to receive theroyalties from the Jabiluka mine (now on long term care andmaintenance). Djabulukgu consists of the Traditional Aboriginalowners and affected Aboriginals of the Jabiluka lease, totallingapproximately 80 people, directed by an elected Committee.The Djabulukgu Association has been the identified ATSIC serviceprovider to the Aboriginal Out Stations and living areas inKakadu for the past eight years. This includes managingcommunity housing and associated essential services as well asoperating a Kakadu based CDEP (Community DevelopmentEmployment Program). The Association also owns and operatesseveral tourism enterprises within Kakadu. The strategic planfor the Djabulukgu Association will see the organisation devolveitself of social services and focus more on business developmentand members' services in the future.

Gagudju Association

The Gagudju (the original word for Kakadu) Association is thelargest of the associations and consists of about 250 Aboriginalpeople associated with the Kakadu region. It was establishedin 1980 to manage royalties payable from the Ranger mine plusa number of other objectives. The Gagudju have invested inbusinesses such as the famous Crocodile Hotel at Jabiru, theCooinda Lodge, the Border Store, Civil Contracting, housingand the Jabiru Mobil service station. The Association is principally

Aboriginal groups

Both Ranger and Jabiluka are located on Aboriginal land,granted to the Mirarr people under the Aboriginal Land RightsAct (NT) 1976.

ERA accepts its responsibility for prudent land and environmentalmanagement and acknowledges the needs and expectationsof the Aboriginal landowners, the Mirarr clan (represented bythe Gundjeihmi Aboriginal Corporation). There are several otherAboriginal representative bodies associated with ERA's activitiesin the Northern Territory.

Gundjeihmi Aboriginal Corporation

The Gundjeihmi Aboriginal Corporation was established in 1995to represent the interests of the members of the Mirarr clanwho are the Traditional Owners of both the Ranger and Jabilukaareas. With approximately twenty-six members, all of whomare members of the Djabulukgu and Gagudju Associations, theGundjeihmi Aboriginal Corporation has been the recipient oflocal community royalties generated by ERA and is focussed onprotecting the cultural heritage of the Mirarr people. The seniortraditional owner is Yvonne Margarula, and she met ERAexecutives for informal discussions several times in 2003.

business focussed with the objective of accumulating assets forthe long term benefit of its members as well as assisting thevarious Clan Groups to enter into business for themselves.The Gagudju Association is managed by an elected Committeeof members.

Northern Land Council

Legally, on matters of land, ERA must direct all its dealings withthe Aboriginal owners through their legal representative, theNorthern Land Council (NLC). The NLC was established underthe Aboriginal Land Rights Act (NT) Act 1976.

Stakeholder consultation

For this year's report ERA consulted key stakeholders aboutour 2003 performance, by circulating this report in draftform, and calling for comments and suggestions. Severalorganisations provided comments on the draft report whichwere helpful in improving accuracy and relevance. Somestakeholders decided against commenting on this year'sreport. Two stakeholders provided comments for publication;these are included below.

ERA believes in the importance of stakeholder consultation,and will continue seeking outside input to the Social andEnvironment Report in future years.

The Djabulukgu Association congratulates the ERAcommitment to enter into the Jabiluka Long Term Care andMaintenance Agreement with the Mirarr via the NorthernLand Council. This agreement has opened up a considerablewindow of opportunity, as historical sparring partners canand will collectively focus on issues that will result in outcomesfor the common good of the Kakadu community. TheDjabulukgu Association would also like to acknowledge thesupport that ERA provided to Lofty Bardayal Nadjamerrek.Lofty's first solo exhibition, held at the Annandale Galleryin Sydney, was an outstanding success. ERA provided muchneeded funds that assisted Lofty with the travel andaccommodation costs associated with the exhibition.

Liam MaherDjabulukgu Association

ERA's environmental performance was significantly damagedby the water contamination incident in March 2004. I'm notqualified to comment on the technical aspects, but I canaddress the community relations effort associated with theincident. In my view, ERA spent too much time dealing withmedia and lawyers and not enough effort discussing actual,potential and perceived impacts with residents of Jabiruand neighbouring communities.

In nearly all other respects, ERA's social performance hasimproved remarkably over the last three years. I believethere is genuine goodwill within the company to formregional partnerships that achieve outcome-drivencommunity development. There is also now realrespect within ERA for the rights and aspirations oftraditional owners.

Mathew FaganCoordinator, Jabiru Region Sustainability Project

In 2004 the trainee intake will beincreased, with three additionaltrainees to come from a new program,linked to the Commonwealth’sCommunity Development EmploymentProgram (CDEP). Under this programERA will host three CDEP participantsas fixed term, full time employees. TheHost participants will remain on CDEPwages which are 'topped-up’ by ERA,with the aim of the eventually fillinga position at ERA. ERA has appointeda full time Indigenous supervisor tohelp trainees gain an improvedunderstanding of mine-site culture andwork requirements.

In 2004 the current levels of Indigenousemployment will be sustained, whileattempts continue to increase therepresentation of Aborigines from theAlligator Rivers Region.

10

Payments to Aboriginal andother interests

During 2003 ERA paid $7.6 million of Ranger royalties tothe Commonwealth Government. This money is ultimatelydistributed to Northern Territory based Aboriginal groups. Additionally ERA paid $2.2 million in royalties to theCommonwealth government for distribution to the NorthernTerritory Government during 2003. Ranger has paid a totalof $199 million in royalties since the project began.

During 2003, ERA spent $0.2 million in social paymentsunder the terms of an agreement over Jabiluka. Paymentsunder Jabiluka Agreements now total $7.5 million.

Aboriginal employment and training

For most of 2003 the average number of indigenousAustralians working at Ranger was 30. The proportion during2003 was 17 percent of the total workforce in March fallingto 13 percent in December.

The Indigenous employees included four full-time AboriginalApprentice Trade Trainees, five Aboriginal Trainees, and21 full-time Indigenous employees working in all areasof the operations. A total of 11 of the 30 Indigenousemployees were recruited from the Alligator Rivers Region,with the remaining employees recruited from withinthe Northern Territory.

11

How do we look after ourunique surrounds?

Environment

A number of significant outcomes in environmentalmanagement were achieved in 2003.

ERA was formally recognised for its world-class environmentalmanagement system by achieving certification to theinternational standard for environmental managementsystems, ISO 14001. (See below)

During 2003 there were no significant environmental incidentswhich had any detrimental impact on the surroundingenvironment. Routine water monitoring programs conductedby ERA, the Commonwealth Supervising Scientist andNT Department of Business, Industry and ResourceDevelopment verified that the environment of KakaduNational Park remained protected from activities at boththe Ranger mine and Jabiluka site.

A number of improvements in water managementperformance at Ranger mine were observed during the2002-03 wet-season. These improvements followed theprogram of civil earthworks conducted in late 2002 and theimprovement of some key operating procedures. Significantamongst the improvements seen was the reduction in theconcentration of uranium in Retention Pond 1, a key pointof water discharge from the Ranger mine, with levelsdropping to the lowest concentrations recorded since 1999.

ERA’s on-the-ground commitment to continuous improvementin performance included further civil earthworks conductedduring the latter part of 2003. These worksbuilt on the program of the previous year and includedworks to improve the segregation of poor quality processwater from intermediate quality pond water. Theseimprovements support the company's strategy on watermanagement which focuses on reducing inputs to the processwater system and treatment of poorer quality inputs to thepond water system. Treatment technologies are being pilotedduring the 2003-04 wet season.

Waste management

A plan was developed during 2003 to enhance controls forthe management of wastes. Development of the wastemanagement plan followed an external audit at Rangermine of waste generation, segregation and disposal practices.Key outcomes of the audit included the identification offurther opportunities to reduce the on-site disposal of wastethrough improved recycling and treatment of waste materials.In addition, improved practices were implemented for themanagement of the Ranger landfill based on the relevantNT guideline for the operation of solid waste disposal sites.Opportunities for further improvement to waste managementpractices will be obtained through the development in 2004of a Total Waste Management Approach that will consolidateall waste management activities through one wastemanagement contractor.

Weeds management

A weed management plan was finalised in July 2003 toaddress the risks associated with the proliferation of plantsnear ERA's operations that are not local to the area. Theplan was developed to be consistent with the overall weedmanagement objectives for the immediately surroundingareas of Kakadu National Park. Development of the planfollowed detailed on-the-ground mapping of different weedspecies and their abundance. The weed management planoutlines the priority weed areas and presents the timingfor future measures to control weed infestations.Implementation of the plan has been supported by bothairborne and ground based weed spraying, togetherwith improved controls to minimise the spread of weedsor introduction of new weed species. Areas will beremapped during 2004 to assess the performance ofweed management controls .

Senate inquiry

In July 2002 the Senate asked its Environment,Communications, Information Technology and the ArtsReferences Committee to inquire into regulatory, monitoringand reporting regimes that govern environmentalperformance at the Ranger and Jabiluka uranium operationsin the Northern Territory and the Beverley and Honeymoonin situ leach operations in South Australia. The originaldeadline was December 2002, but the report’s deadline wasextended to October 14, 2003. The majority report,representing the views of the Democrats and the ALP,presented 15 recommendations relating to Ranger andJabiluka. Government members of the committeedelivered a dissenting report and the Greens SenatorKerry Nettle added additional comments to the report.The 300-page document, including the separatereports and addenda, can be found athttp://www.aph.gov.au/senate/committee/ecita_ctte/index.htm.At time of printing the Federal Government had not yetresponded to the Senate’s report. ERA put a detailedsubmission to the inquiry and participated in hearings.The ERA submission can be found at the above website,along with other submissions.

12

ISO 14001

ERA was formally recognised for the quality of itsenvironmental management system by achieving certificationto the international standard ISO 14001 in December 2003.

Due to some intense work by the environmental and otherdepartments this was achieved 18 months ahead of thecompany’s original schedule.

The ISO14000 series of standards have been developed bythe International Organisation of Standardisation (ISO) basedin Geneva, Switzerland.

In order to attain ISO14001 certification managementdemonstrated that environmental risks were well understood,appropriate controls were in place, performance wasconstantly checked, and there was a genuine commitmentto continuous improvement.

Now that certification has been achieved, ERA will beaudited by an external accredited auditing body every sixmonths, and will undergo a full re-certification auditevery three years.

The Environment Management System ensures environmentalmanagement is integrated into ERA’s daily operations, longterm planning and other management systems. It providesan objective assessment of the processes in place to protectthe environment.

The framework of ISO14001 can be broken down intofour basic principles: Plan-Do-Check-Act. One of the maintasks is to assess the environmental aspects of ERA's activities.These include potential or actual hazards as well asnormal and abnormal work activities. These aspects are thencompiled into registers and each aspect is assessed andallocated a level of risk depending on the impact it poseson the environment.

The EMS requires organisations to take an active role inexamining their practices, and then determining how theirimpacts should best be managed. This approach encouragescreative and relevant solutions from all levels of theorganisation. Communication and training are two keyareas associated with the successful implementation of anISO14001 certified EMS.

Externally, ERA's commitment was realised throughtransparent communication with regulators and Aboriginalrepresentatives to ensure stakeholder expectations weremet and that our operations continue to have no detrimentalimpact on the surrounding environment.

Internally, employees are made aware of their requirementsthrough information sessions and training. Specific trainingmodules continue to be implemented to better informemployees of their role in the Company's environmentalmanagement programs in such areas as flora and faunawater and waste.

Improved environmental management practices are thenincorporated into every employee’s daily work activities.

Earth Water Life Sciences

EWL Sciences Pty Ltd (EWLS), a specialist commercialenvironmental consulting business based in Darwin, is whollyowned by ERA. EWLS is a Commonwealth Governmentregistered Research and Development agency. Revenue for2003 was $3.2 million of which $1.3 million was generatedfrom external (non-ERA) projects. These external projectsbenchmark the company’s scientific and technical capabilityand enhance ERA’s capacity for strategic environmentalmanagement at Ranger and Jabiluka.

Key project work at Ranger and Jabiluka in 2003 focussedon strategic technical environmental investigations including:

• planning for closure of Ranger mine;

• assessing the potential impacts of process water andtailings rising above the previously approved limits inPit #1 at Ranger;

• modelling the security of in-pit tailings storage in therequired (by the Authorisation) 10,000 year time-frame;

• development of the technical and scientific strategy forimplementation of the approved Jabiluka long-term careand maintenance regime;

• scientific rationalisation of statutory and operationalenvironmental (principally surface water andgroundwater) monitoring programs at Ranger whichwere approved by stakeholders and implementedby ERA;

• process water and pond water treatment technologiesand treated water disposal strategies; and

• development of target habitats and ecosystems forconstruction on the rehabilitated Ranger mine site.

EWLS continues to represent ERA on the Alligator RiversRegion Technical Committee. The role of this committee isto oversee and make recommendations to the FederalMinister for the Environment and Heritage about the natureand extent of research necessary to protect the environmentin the Alligator Rivers Region from any effects ofuranium mining.

13

EWLS prepares a number of scientific and technical evaluationreports on behalf of ERA each year. These include the annualWet Season Interpretative Reports and the annual Plans ofRehabilitation for Ranger and Jabiluka. The wet seasonreports summarise all environmental monitoring datacollected during the high rainfall wet seasons in the tropics,evaluate the effectiveness of ERA’s strategies in managingthe complex interactions between mine landforms andinfrastructure with natural surface waters and groundwaters.They also look at historical trends which will lead to effectivestrategies for decommissioning and rehabilitation. Thesereports are submitted to regulators (the Territory’sDepartment of Business, Industry and Resource Development,the Commonwealth’s Supervising Scientist) and stakeholders(the Northern Land Council and Traditional Owners) forcomment and approval.

Plans of Rehabilitation for both Jabiluka and Ranger arerequired by the regulations to be updated annually. Theyare costed on the basis of a potential premature shutdownof mining operations. In the case of Ranger Mine, theestimated cost of implementing the decommissioning andrehabilitation strategies detailed in the Plan are reviewedand approved by the regulators and stakeholders, checkedby an independent assessor appointed by the CommonwealthGovernment and finally approved by the CommonwealthMinister for Resources. The approved cost of rehabilitationsets the value of the Ranger Rehabilitation Trust Fund thatis held by the Commonwealth Government. In the case ofJabiluka, the approved cost of rehabilitation defines thevalue of a Rehabilitation Bond.

The annual amended Plan of Rehabilitation for Ranger Mineis related to the life-of-mine closure plan which outlinesstrategies and costs for decommissioning and rehabilitationafter mining and processing operations have been completed.

ERA’s Authorisation to Operate, and the Commonwealth’sEnvironmental Requirements determine the rehabilitationobjectives, which are primarily to establish environmentssimilar to those in the adjacent areas of Kakadu NationalPark such that the rehabilitated area could be incorporatedinto the National Park at a future date.

People: our most important resource

Safety and health

ERA’s goal is to eliminate all injuries and risks to health.During 2003, ERA achieved a reduction in the All InjuryFrequency Rate, down to 3.37 from a rate of 4.2 at the endof 2002. Notably, the Process team achieved no lost time ormedical treated injuries for 2003.

Whilst the total number of injuries dropped, there was anincrease in the number of injuries that resulted in “losttime”, where employees are unable to return to their normalduties at the next shift.

Specific health and safety outcomes in 2003 included:

• ERA won the 2003 Northern Territory Recognition Awardin Resource Development in the Workplace Safetycategory.

• Rio Tinto conducted an audit of ERA conformance withcorporate safety standards in October. The audit identifieda significant improvement in implementation of thestandards since the previous audit. ERA received acommendation for its computerized program for trackingand controlling training.

• A two-day safety shutdown was held in January to furtherpromote safety standards and procedures. Under thedirection of the General Manager Operations, the entireworkforce was engaged in a Ranger site clean up. Onthe second day of the shutdown, presentations on safetystandard requirements and other key safety procedureswere made to all employees and site contractors.

• The SiteSafe computer system was introduced as thecentral database for managing safety data andinformation. The system is used for reporting on hazardsand incidents in the workplace and for recording theoutcomes of inspections and audits. SiteSafe is also usedfor establishing and tracking corrective and preventativeactions.

• ERA’s risk assessment process was strengthened with thedevelopment of a formal risk assessment model knownas SAFER (Safety, Assets, Finance, Environment andReputation). SAFER uses the consequence and probabilitymethod of evaluation to rank risks and establish prioritiesfor managing risks. Using this approach, a series of riskassessment workshops was conducted to identify keysafety and health related risks.

Emergency Response and Disaster Management & Recoveryprocesses were updated, including the development ofprocedures for specific emergency threats. A number ofdesktop and live simulation exercises were conducted during2003 to test ERA’s response to potential emergency anddisaster scenarios. The outcomes of debriefs from theseexercises have been recorded to enable further improvementsto be made.

14

2004 Key targets

• Zero environmentalstatutory infringements

• Zero environmentalcritical incidents

• Zero increase in freshwateruse per tonne of product(from 2003 base year)

• 2% decrease in energy useper tonne of ore treated(from 2003 base year)

• 100% conformance withlandfill managementstandard operatingprocedure

2004 Key objectives

• Ensure environmentallegal compliance

• Ensure no environmentalcritical incidents

• Maintain freshwater useefficiency as productionincreases

• Increase energy useefficiency in theProcess Plant

• Implement processes andpractices to improve wastemanagement at thePit1 landfill

2003 Key measurements

Water

ERA used 149 ML of freshwater with an efficiency of29 kL per tonne of uranium oxide produced.

Energy use

ERA used 848 Terajoules of energy with an efficiency of165 Gigajoules per tonne of uranium oxide produced.

Emissions

ERA had on-site greenhouse gas emissions of54 k tonnes carbon dioxide equivalents and anefficiency of 10.5 tonnes carbon dioxide equivalentsper tonne of uranium oxide produced.

ERA emitted 108 tonne of SO2. The efficiencywas 21 kilograms of SO2 per tonne of uraniumoxide produced.

Performance against 2003 targets

Zero significant environmental incidents.

• Zero reported.

Zero technical or administrative infringements.

• Zero reported.

30% reduction in Unplanned Environmental Events in 2003based on the 2002 level.

• Increase in events reported reflected improvedreporting on environmental incidents.

Reduce energy use by 22% per tonne of ore milled by 2003from to the 2000/01 base year.

• ERA’s energy use per tonne of ore milled hasreduced by 22.6% compared to 2001.

Zero leaks and spills of chemical and fuel from undergroundor on ground tanks and pipes.

• One incident reported - On 23 April 2003 approximately300L of diesel was lost onto the road below a light vehiclediesel bowser header tank at Ranger mine. The tankoverflowed due to a faulty solenoid on the inlet controlvalve to the tank, resulting in the valve remaining openand the tank and bund overflowing. The diesel wascontained on an area with a sealed surface and absorbedusing booms, diatomaceous material, pads and crushedlimestone. The valve was overhauled to ensure that itwas functioning appropriately. There was no detrimentalimpact to the environment arising from this incident.

15

Radiation

The United Nations Scientific Committee on the Effects ofAtomic Radiation reports (2000 Report to the UN GeneralAssembly) that the: “worldwide annual exposures to naturalradiation sources would generally be expected to be in therange 1 – 10 mSv, with 2.4 mSv being the present estimateof the central value”.

During 2003 a Radiation Management Plan was implementedfor the backfilling of the Jabiluka underground workings.The Plan involved radiation surveillance of conditions inthe underground workings as well as direct consultationwith the contractors performing the work. The highestindividual radiation dose assessed for this work performedover a six-week period was 0.4 mSv.

Also during 2003 work commenced on analysingapproximately 20 years worth of radiation monitoring datacollected around the Ranger and Jabiru areas. This analysiswill form the basis for development of a risk-based approachto radiation monitoring that will provide ERA with aneffective radiation surveillance program that, onceimplemented, will be consistent with the requirements ofthe Australian/New Zealand Standard for OccupationalHealth and Safety Management Systems, AS/NZS 4801:2001.

Designated employee mean annual radiation dose

50

40

30

20

10

01994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Maximum recommended annual limit

Average recommended annual limit

Designated employee mean annual dose

The radiation exposure pathways at ERA’s operations arecomprehensively measured and reported throughout theyear using limits recommended by the InternationalCommission on Radiological Protection. Designated workersare those employees in work categories that have thepotential to exceed 5 millisieverts (mSv) per year.

There are over 100 designated employees at the Rangeroperation and limits of 100 mSv over five years or a maximumof 50 mSv in any one year must be met. Designated employeesreceived a mean radiation dose of 1.6 mSv during 2003.The following graph depicts the mean annual radiation doseassessed for designated employees working throughoutthe operation. The graph also reflects the exposurein comparison with Australian as well as internationallyrecommended limits.

Employees who work at the mine site but are not workingin areas of high exposure (non-designated employees) aresubject to the same dose limits as designated employees andin 2003 the maximum dose was 1.0 mSv. Importantly, theexposure of Jabiru residents and surrounding communitiesis also monitored and the contribution from the mine wasassessed as 0.01mSv in 2003. The natural background inthe area is 2-3 mSv. A radiation practice must not exposemembers of the public to more than 1 mSv per year abovenatural background.

16

ERA Policies

Environment Policy

As the operator of the Ranger uranium mine and Jabilukaproject on Aboriginal land in Australia’s Northern Territory,Energy Resources of Australia Ltd (ERA) recognises that thenatural and cultural values of the Company’s Mineral Leasesand the surrounding World Heritage listed Kakadu NationalPark must be protected.

Environmental management is a core business requirementessential to long-term success. ERA will comply with allrelevant legislative requirements and commitmentsapplicable to our operations and, where practicable, exceedthese requirements. In addition, ERA is committed toachieving environmental management excellence throughcontinuous improvement of our environmental performance.

To support this policy, ERA will:

• Respect all agreements with the Northern Land Counciland Aboriginal traditional owners of the Ranger ProjectArea and Jabiluka Mineral Lease.

• Implement and maintain an Environmental ManagementSystem (EMS) certified to the ISO 14001 standard.

• Ensure open consultation with employees, and considerkey stakeholders positions, in setting environmentalobjectives and targets.

• Consider the actual and potential impacts of our activitieswhen setting environmental objectives and targets andreview them periodically.

• Ensure the efficient use of resources and pursue theimplementation of practices that minimise emissions andcommit resources to ensure appropriate wastemanagement.

• Research processes, practices and innovative technologiesthat will ensure the ongoing protection of theenvironment from ERA’s mining and processing activities.

• Prepare, test and maintain procedures for response topotential emergency situations.

• Prepare, maintain and review annually plans for theeventual closure of the operations that aim to establishan environment that could be incorporated into KakaduNational Park.

• Provide employees with the education, training andresources required to fulfil their environmentalresponsibilities integrated with their day-to-day activities.

• Communicate this policy, objectives, targets and individualaccountabilities and responsibilities to ERA employees,and contractors where appropriate.

• Communicate this policy to stakeholders and the generalpublic by including it in public and corporatecommunications.

• Conduct periodic audits and senior management reviewsof this policy and the EMS to ensure their suitability,identify deficiencies and implement improvements.

Safety and Health Policy

Energy Resources of Australia Ltd (ERA) is one of the world’slargest uranium producers that mines, processes, and exportsuranium ore. ERA operates the Ranger mine in Australia’sNorthern Territory.

Our goal is to eliminate all injuries and risks tohealth at ERA

ERA will maintain a safe and healthy workplace and provideinformation that allows all employees, contractors and visitorsto make safe decisions.

To support this policy, ERA will:

• Include safety and health as a strategic business goal.

• Fully comply with internal safety standards, operationalauthorisations, relevant legislation, published standardsand codes of practice.

• Document individual responsibility and accountability forsafety and health outcomes.

• Provide necessary resources and safety support, includingtraining, to ensure that safety and health objectives andoutcomes are achieved.

• Adopt AS4801 so that ERA’s safety and healthobjectives are met.

• Continually and systematically improve safety, radiationand occupational health management performance.

• Provide clear communication and consultation processesto ensure employees, are kept informed of safety andhealth developments.

• Ensure this policy is available to all interested parties andis periodically reviewed so that it remains relevant andappropriate to ERA’s operations.