Rio might face legal challenge from AWU on its decision to close Gove alumina refinery

The decision by mining giant Rio Tinto to close its Gove alumina refinery in the Northern Territory may face a legal challenge.

Representatives of the Australian Workers Union met with Territory Chief Minister Adam Giles today to discuss the closure.

The union claims Rio Tinto signed an agreement in 2011 binding it to refining alumina if it was to continue mining for bauxite at the site.

Last week, Rio Tinto announced plans to shut down the refinery but continue its mining operations.

AWU national secretary Paul Howe said today's discussions included whether the company had a legal obligation to keep the refinery operating.

"Why hasn't legal action commenced, why haven't injunctions been put in place to stop the shutdown of the refinery?" he asked.

Audio: NT Govt seeks legal advice over Rio Tinto's refinery shutdown (PM)

"Why is Rio Tinto allowed to breach the terms of their lease agreement with the traditional owners."

Mr Howe also questioned Rio Tinto's claims it was losing money at the refinery.

"The question is, is that holistic operation unprofitable?" he said.

"I say no; in fact the refinery, yes, has struggled but the entire global aluminium sector has struggled. "The long-term prospects for that refinery are very good."

Also at the meeting was the union's Gove senior site representative Garry Lynch, who called on Rio Tinto to release details of the 42-year lease agreement it signed with traditional Indigenous owners in 2011.

He also said the Government needed to work on a rescue package.

"There can be a fix," he said.

"What we have not got to let Rio get away with is corporate greed."

About 1,100 jobs will be lost when refinery operations are phased out early next year.

The move will severely affect the town of Nhulunbuy, which has about 4,000 residents, and nearby small communities.

The Chief Minister says he is taking action to help Nhulunbuy make a transition, with the population expected to fall to about 1,500.

Mr Giles says the government is also looking at ways to diversify the town's economy.

"I will immediately establish a task force, comprised of Rio Tinto, the Northern Territory and Australian governments, as well as representatives from the community to address the transition and develop sustainable economic activities for Gove," he said.

"I will also establish a community reference group whose membership will include a range of different stakeholders, including local traditional owners."