Rio Tinto losing $30m a year from Arnhem Land refinery – by Dennis Shanahan (The Australian – November 27, 2013)

RIO Tinto’s decision not to switch its alumina refinery at Gove to cheaper gas supplies has sealed the fate of the plant, which employs 1500 and keeps the Northern Territory’s fourth-largest town of Nulunbuy alive.

The international mining giant confirmed yesterday that it was “reviewing the status” of the refinery in Arnhem Land, which employs hundreds of indigenous workers.

The Rio board is expected to make a decision this week on winding down the refinery operations and instead to export bauxite from the Gove mine on the Gulf of Carpentaria.

Rio Tinto is losing $30 million a year from the refinery and the Northern Territory and commonwealth governments had hoped an offer of subsidised gas to replace high-cost fuel oil to make alumina would keep the refinery open.

Yesterday, Northern Territory Chief Minister Adam Giles said he hoped Rio Tinto would keep the refinery open but the issue was “no longer about gas” for Gove.

Australian Workers Union national secretary Paul Howes, who is flying to Darwin to meet government, company and union delegates from Gove on Monday, said too much was at stake to allow the refinery to shut.

But Rio’s decision to reject the gas option has virtually doomed the refinery, which has been targeted for closure for years.

A spokesman for Rio Tinto yesterday confirmed the report in The Australian revealing the imminent decision. “Plans to convert the alumina refinery to gas will no longer proceed,” the spokesman said. “Despite considerable efforts to improve the refinery’s performance, continuing low alumina prices, a high exchange rate and substantial after-tax losses . . . are key factors under consideration,” he said.

The total closure of the refinery would cost 1500 jobs, virtually close the nearby town of Nulunbuy — population 4000 — and hit the Northern Territory economy for $400 million.

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