Government to bail out Rio Tinto NT aluminum refinery
The Minister for Resources and Energy, the Hon Martin Ferguson AM MP confirmed today that the Commonwealth Government will continue working with Rio Tinto and the Northern Territory Government, with a view to ensuring the long term viability of the Gove alumina refinery.
Pacific Aluminium, a business unit of Rio Tinto, employs approximately 1100 people at the Gove refinery, currently 10 per cent of which are indigenous. The refinery has been operating at a loss due to high fuel prices, weak alumina prices and the strong Australian dollar
Closure of the refinery would cause serious social and economic disruption to North East Arnhem Land and would adversely affect the Northern Territory economy.
Converting the refinery to operate on competitively priced Australian gas, rather than imported heavy fuel oil, will help make the refinery more competitive in the global alumina market.
Rio Tinto is keeping the refinery operating while it conducts a feasibility study on converting the refinery to gas, and the Commonwealth’s Export Finance and Insurance Corporation is conducting due diligence on a loan guarantee to support financing of the construction of a gas pipeline from Katherine to Gove. The Northern Territory Government has agreed to release gas for ten years, once the pipeline is built.
“Supplying gas to Gove would not only help to ensure the future of the refinery, but also stimulate exploration and development of gas fields across northern Australia,” Minister Ferguson said.
“This pipeline has the potential to become a significant piece of infrastructure for industry development in the Northern Territory.
“The refinery is vital to the economic stability of Nhulunbuy and the nearby indigenous communities”.
Member for Lingiari, the Hon Warren Snowdon MP, said the Government’s commitment to working towards finding a way to ensure the ongoing operation of the Gove alumina refinery was good news for the people of the Northern Territory.
“The Government wants to reassure the Nhulunbuy community that the Commonwealth, the Northern Territory Government and Rio Tinto are working together to achieve a better future for north-east Arnhem Land,” Minister Snowdon said.
Due diligence and feasibility studies are planned to be completed by December 2013 with gas expected to be supplied to Gove in early 2016.