Around $10 million cut out of Rio Tinto's Gladstone alumina refineries

Profits seem to have gone missing from Rio Tinto's Gladstone alumina refineries and it is the contractors who are being squeezed to turn that around.

Yarwun and Queensland Alumina Limited Contractors and suppliers will be worse off about $10 million through a re-tendering process that will look to make a saving on 750,000 hours (or around 90% of total contract hours).

Rio Tinto, the global metal and minerals behemoth, has confirmed a re-tendering process is underway and that they are delaying payments to current contractors; extending their payments from 30 days to 60.

This is all only part of a $300 million cost cutting effort across the Rio Tinto aluminium group worldwide announced to the London Metal Exchange this week by chief executive Alf Barrios. Speaking to investors, he said Yarwun and QAL (Queensland Alumina Limited) were continuing to lose money but they would "aggressively drive costs out of the business".

The price of aluminium is being driven down by an oversupply from China.

But Rio Tinto does estimate prices will increase mid-next year as Chinese production slows down and the country runs out of quality bauxite.

Rio Tinto wouldn't go into the expected cuts to contractors at Queensland Alumina Limited but were positive with the new mine in Weipa that the company would stay in the aluminium business for the long term as long as the refineries were profitable.