Australia tries rescuing Rio Tinto’s aluminum operations
Australia’s federal government has agreed to back the construction of a proposed gas pipeline to supply Rio Tinto’s (LON, ASX:RIO) struggling Gove aluminum operations in the country’s Northern Territory.
According to The Australian, the Territory's government is expected to sell up to 13% of its gas supply to keep the miner’s plant operational, since it is the regions largest private enterprise.
Rio warned in September it was undertaking a review of the Gove bauxite mine and alumina refinery since it started losing about $200 million a year – mainly due to the high costs of heavy-diesel power generation.
The evaluation would address a range of alternatives, including the suspension of refinery operations until economic conditions improved.
Gove employs about 1,400 people and produces over 8.2 million tons a year of bauxite, as well as 2.65 million tons a year of alumina.
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