The Australian
Rio extends gas deadline for Gove Alumina refinery
Edited by : AL CIRCLE
3 min read
MINING giant Rio Tinto has extended its deadline for the Northern Territory government to find a supply of gas to power the company's loss-making aluminium refinery in Arnhem Land, the NT's largest private enterprise.
Chief Minister Terry Mills will now make a last-minute dash to Europe in a bid to stop the miner closing the refinery on the Gove Peninsula, with the loss of 1000 direct jobs.
Mr Mills yesterday continued to hold out against Rio's demands the government unconditionally give up almost half its remaining contracted gas supply from a field east of Darwin to power the mining giant's plant.
He declared to do so could expose taxpayers to 75 per cent utility price hikes in the future.
"This government is doing all it can to secure the Northern Territory's electricity supply and find the additional gas needed to reach an agreement," Mr Mills said. "An aggregated gas supply must be found . . . But I cannot and will not risk taking actions that result in upward pressure on Territory power prices."
Rio's refinery and bauxite mine at Gove, which supports the East Arnhem region and nearby town of Nhulunbuy, is believed to be losing about $30 million per month.
The company had issued an effective ultimatum that if the NT government did not agree to release about 10 years' worth of gas supply by the end of last month the refinery would almost certainly close. It is understood Rio's new chief executive, Sam Walsh, has extended that deadline by about 10 days.
Closure of the refinery is predicted to halve the size of Nhulunbuy, which is home to about 4000 people and the NT's fourth-largest settlement.
East Arnhem Regional Futures Alliance chairman Klaus Helms said if that happened the region's economy would wither.
"There's no other business or industry in the whole region, so what's going to happen to those people?" Mr Helms said.
Mr Mills said he understood the town's plight.
"It's a very difficult situation for the people of Gove," he said. "This dreadful uncertainty cannot be resolved until this whole exercise is concluded, and that won't be too far off."
Rio subsidiary Pacific Aluminium, which operates the plant at Gove, has already rejected an NT government proposal to supply the 300 petajoules of gas over 10 years the refinery needs, so long as a replacement supply to power government-owned generators can be found. The company sought an unconditional commitment to supply the gas.
Some years ago, Pacific Aluminium declined the opportunity to buy the very same gas it is now seeking to force the government to release.
It also declined to build a pipeline to the plant, and is now understood to be seeking federal help of up to $1 billion to underwrite that project.
Chief Minister Terry Mills will now make a last-minute dash to Europe in a bid to stop the miner closing the refinery on the Gove Peninsula, with the loss of 1000 direct jobs.
Mr Mills yesterday continued to hold out against Rio's demands the government unconditionally give up almost half its remaining contracted gas supply from a field east of Darwin to power the mining giant's plant.
He declared to do so could expose taxpayers to 75 per cent utility price hikes in the future.
"This government is doing all it can to secure the Northern Territory's electricity supply and find the additional gas needed to reach an agreement," Mr Mills said. "An aggregated gas supply must be found . . . But I cannot and will not risk taking actions that result in upward pressure on Territory power prices."
Rio's refinery and bauxite mine at Gove, which supports the East Arnhem region and nearby town of Nhulunbuy, is believed to be losing about $30 million per month.
The company had issued an effective ultimatum that if the NT government did not agree to release about 10 years' worth of gas supply by the end of last month the refinery would almost certainly close. It is understood Rio's new chief executive, Sam Walsh, has extended that deadline by about 10 days.
Closure of the refinery is predicted to halve the size of Nhulunbuy, which is home to about 4000 people and the NT's fourth-largest settlement.
East Arnhem Regional Futures Alliance chairman Klaus Helms said if that happened the region's economy would wither.
"There's no other business or industry in the whole region, so what's going to happen to those people?" Mr Helms said.
Mr Mills said he understood the town's plight.
"It's a very difficult situation for the people of Gove," he said. "This dreadful uncertainty cannot be resolved until this whole exercise is concluded, and that won't be too far off."
Rio subsidiary Pacific Aluminium, which operates the plant at Gove, has already rejected an NT government proposal to supply the 300 petajoules of gas over 10 years the refinery needs, so long as a replacement supply to power government-owned generators can be found. The company sought an unconditional commitment to supply the gas.
Some years ago, Pacific Aluminium declined the opportunity to buy the very same gas it is now seeking to force the government to release.
It also declined to build a pipeline to the plant, and is now understood to be seeking federal help of up to $1 billion to underwrite that project.
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