26th Nov 2013 10:39
LONDON (Alliance News) - Mining giant Rio Tinto PLC is expected to begin cutting back on its activities at the Gove alumina refinery in Australia, according to The Australian.
The company ended negotiations with the Northern Territory and Commonwealth governments over subsidised gas supplies to keep the loss-making refinery open. It now will decide how to scale back the refinery and export bauxite rather than refine it into alumina, the national newspaper said.
Government, industry and Aboriginal figures expect a massive blow to the refinery's 1,500 strong workforce, which includes many indigenous employees, The Australian said. The nearby town of Nhulunbuy, which relies on the refinery for power, housing and employment, also will be hugely affected.
These groups expect a USD400 million loss to the Northern Territory economy, the newspaper said.
The Australian said that Rio Tinto, which is the biggest private employer in the Northern Territory, were offered gas at discounted prices and guarantees on a USD600 million gas pipeline, but it was not enough to keep the refinery fully operational.
The Gove refinery, which refines bauxite from local deposits into alumina, is losing USD30 million a year and has been subject to negotiations over gas supplies and federal and Territory government incentives for years.
Rio Tinto shares were down 1.3% to 3,123.50 pence, putting it among the top ten FTSE 100 losers Tuesday morning.
By Tom McIvor; [email protected]; @TomMcIvor1
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