Billions of dollars in mining and energy projects could be put on hold if the government upholds the recommendation of a parliamentary inquiry into Rio Tinto Limited‘s (ASX: RIO) destruction of the Juukan Gorge caves cultural heritage site.
In one of seven recommendations put forward by the inquiry, the issuing of new approvals for projects that damage indigenous heritage in Western Australia could be put under indefinite moratorium.
At the time of writing, the Rio Tinto share price has edged 0.77% lower to $114.78.
What’s the background?
In May this year, Rio Tinto blasted the 46,000-year-old rock shelters at Juukan Gorge in Western Australia’s Pilbara region as part of the expansion of its Brockman 4 mine. This was despite warnings of the site’s cultural significance.
The gorge is known primarily for a cave that was the only inland site in Australia to show signs of continuous human occupation for over 46,000 years, including through the last ice age.
Rio Tinto has apologised, saying that an internal review has ascribed the mistake to a series of flaws in its systems. These include failures in the sharing of information and a lack of engagement with the indigenous people of the area.
In September, it was announced that chief executive Jean-Sebastien Jacques and other Rio executives would resign over the issue.
Parliamentary inquiry
A parliamentary inquiry has since been established to investigate everything from Rio Tinto’s corporate behaviour to the adequacy of state and Commonwealth heritage laws.
The inquiry has made seven recommendations in an interim report released yesterday. One of these recommendations is for Rio Tinto to pay compensation to the indigenous people and traditional owners of the Juukan site.
The inquiry also recommended Rio Tinto work to reconstruct the ancient structure, and called for a moratorium of all mining in the area. It further recommended Rio Tinto review its internal procedures in managing indigenous heritage matters.
Labor senator Pat Dodson, member of the joint parliamentary committee, said the destruction of the caves was one of the worst disasters “that has ever happened in our country”.
Rival miner Fortescue Metals Group Limited (ASX: FMG) is also embroiled in this issue and has been upsetting the traditional owners of Juukan. This comes after the company sought to increase its tenure on part of the area that Rio had vowed to temporarily leave undisturbed.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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