Rio Tinto Decides To Suspend Production At Gove Alumina Refinery

(RTTNews) - Mining giant Rio Tinto PLC (RTPPF.PK, RIO.L, RIO, RTNTF.PK) Friday said it would suspend alumina production at Gove and focus on its bauxite operations after determining the refinery is no longer a viable business in the current market environment.

Key factors that influenced the decision were continuing low alumina prices, a high exchange rate and substantial losses for the refinery despite efforts to improve performance.

The company will now work on the scope and phased timing of suspension and prepare for potential outcomes over coming months. It is expected that the process of suspending production would start in the first quarter of 2014 and be phased during the year.

Consultation with employees and the local community will be the priority, Rio said, adding that establishing a long-term plan for the bauxite operation and its employees would be the key to retaining a sustainable business in the local area.

Rio Tinto chief executive Sam Walsh said, "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 is reported that around 1,100 jobs may be lost as a result of the move.