MELBOURNE: Global miner Rio Tinto is expected to close its Gove alumina refinery in Australia after ending talks with Australian governments over securing gas supplies for the loss-making plant, The Australian newspaper reported on Tuesday.
The newspaper said Rio is likely to decide as early as this week to wind down the plant in the Northern Territory. Earlier this year, Rio Tinto had lined up a deal with the Northern Territory government to secure gas supplies for the plant, instead of more expensive diesel, with the help of a pipeline subsidised by the government.
However a new territory chief minister in July cut the amount of gas that was to be set aside for the plant, looking to ensure that Northern Territory taxpayers would not face the potential energy shortages and higher power bills.
Due to the rising cost of diesel, unfavourable exchange rates and weak alumina prices, the refinery has sustained heavy losses. The plant was part of the Pacific Aluminium business that Rio failed to sell earlier this year.
However a bauxite mining business at Gove has so far been unaffected by the uncertain future for the refinery. Alumina is made from bauxite and then processed into aluminium. Rio Tinto spokesmen were not immediately available to comment on the report.
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