Rio Tinto part-suspends uneconomic Gove refinery

29th Nov 2013 07:03

- Alumina production to be suspended- Gove will still produce bauxiteRio Tinto said it plans to temporarily suspend alumina production at its Gove refinery in Australia as it is 'no longer viable' in the current economic environment. The FTSE 100 company said it will focus on bauxite operations at Gove and is establishing a long-term plan for the business. Work will soon begin on the scope and phased timing of the suspension and the Anglo-Australian group said it will "prepare for all potential outcomes over coming months".The suspension process will take some time, Rio Tinto said, and there will be no immediate change to refinery operations, with the process of suspending production expected to start in the first quarter of 2014 and be phased during the year.Chief Executive Sam Walsh said it was "a very sad day" for everyone associated with Gove but cited low alumina prices, a high Australian dollar exchange rate and substantial losses at 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 as they are in Nhulunbuy.""It has been an extremely difficult decision and we recognise it will have a significant impact on our employees, the local community and the Northern Territory. There is no doubt it is a challenging path ahead."He added that management had a firm belief in the potential of the bauxite operation, "a quality asset with a long-term future".OH