Jabiluka, Kakadu, and $2.4bn clean-up bill all shaped squeeze-out price dispute
The Federal Court confirmed North Limited's 0.2-cent offer gave fair value for the remaining Energy Resources of Australia shares, approving the squeeze-out.
Justice Markovic handed down the decision in North Limited v Zentree Investments Limited, in the matter of Energy Resources of Australia Ltd [2026] FCA 695 on 5 June 2026, ending a long-running, contested squeeze-out.
North, a Rio Tinto subsidiary, held a relevant interest in 98.43 percent of ERA's shares through its subsidiaries. It sought the court's approval under s 664F of the Corporations Act to compulsorily acquire the remaining 1.57 percent for $0.002 per share. Because more than 10 percent of the remaining shareholders objected to the compulsory acquisition notice dated 11 April 2025, North needed court approval to proceed.
Zentree Investments, the only objecting shareholder to take an active role, argued that the notice failed to comply with formal requirements and did not give fair value. It challenged the valuation methodology in expert reports from Lonergan Edwards & Associates (LEA) and SRK Consulting, claimed that North withheld material information, and disputed the value attributed to ERA's mineral assets and rehabilitation liabilities.
The case centred on ERA's Jabiluka uranium deposit, which sits on mining lease MLN1, and the rehabilitation of the former Ranger uranium mine adjacent to Kakadu National Park. The Northern Territory government refused to renew MLN1 in 2024 on Commonwealth advice, and the Mirarr Traditional Owners opposed mining at Jabiluka for decades. A long term care and maintenance agreement required traditional owner consent before any development.
Justice Markovic found that the notice complied with the formal requirements of the Corporations Act. She rejected Zentree's argument that LEA and SRK applied incorrect valuation methodologies, noting that experts retained latitude to determine appropriate methodology and that the reports adequately identified their source material and assumptions. She also held that the documents Zentree said North should have disclosed were not material to a shareholder's decision to object.
On fair value, the judge accepted that ERA's mineral assets had to reflect their highest and best use, taking into account the legal, social, and political constraints on developing Jabiluka. She found that these encumbrances meant Zentree's experts, who assessed the assets without regard to those constraints, offered little assistance. The traditional owners' opposition and the absence of government support meant MLN1 would most likely never be developed.
The judge also accepted ERA's rehabilitation provision of about $2.4 billion as the most reliable estimate, which KPMG's audit, a PwC contingency review, and SRK's assessment supported. She rejected Zentree's expert evidence seeking to reduce the provision.
Concluding that the notice gave fair value, Justice Markovic declared that the acquisition terms were fair under s 664F(3) and s 667C, and approved North's acquisition of the remaining ERA shares.
Allens acted for North, with D Thomas SC, J Entwisle, and M Mellos as counsel. Piper Alderman acted for Zentree, with A Sullivan KC and A Flick as counsel. The court ordered the parties to file submissions on costs.
