Rio Tinto has announced it is stopping production at its Gove alumina refinery in the Northern Territory, determining the operation is unviable in the current economic climate.
Chief executive Sam Walsh said it has been a difficult decision for the company, driven by low alumina prices, a high exchange rate and substantial after tax losses for the refinery.
“Our aluminium business is facing challenging market conditions and tough decisions are needed, but those decisions are so much harder when our employees and local communities are affected,” he said.
“This is a very sad day for everyone associated with Gove.
“It has been an extremely difficult decision and we recognise it will have significant impact on our employees, the local community and the Northern Territory.”
Making attempts to minimise the impact of its decision the company said it will launch talks with employees, the local community and both the Northern Territory and Federal Governments.
“Establishing a long-term plan for the bauxite operation and its employees will be the key to retaining a sustainable business in the local area,” Rio said in a statement.
Walsh explained the miner is working to identify initiatives to create new opportunities for the people of Nhulunuy.
The miner said it will turn its focus to mining bauxite in the region as it continues to firm up timings around the suspended operations.
“We have a firm belief in the potential of the bauxite operation, a quality asset with a long term future,” Walsh said.
It is expected the process of shutting down the refinery will begin in the first quarter of 2014, phased during the year.
Both the Northern Territory and Federal Governments attempted to strike a deal with Rio to keep the refinery open.
“All practical scenarios were considered in an attempt to make this work however, it has not been possible to find a sustainable solution,” Rio said.
“There is nothing more the Northern Territory Government could’ve done to help secure a long-term future for the refinery.”