Conveyor at the
Yarwun refinery in
Australia
 
Melbourne, Australia — MININGREVIEW.COM — 08 April 2009 – Leading international mining group Rio Tinto has announced that it is to cut back on certain production and facilities in its Australian operations.

Announcing the decision, Rio Tinto Alcan bauxite and alumina president Steve Hodgson said the company would slow the construction of the Yarwun alumina refinery expansion in Gladstone, and curtail annual bauxite production at its Weipa mine to 15 million tonnes from 19.4 million tonnes in 2008, due to the sharp fall in alumina and aluminium demand and prices in recent months.

“The depressed state of the market and a sharp cutback in demand made further tough decisions necessary,” he added.

Hodgson said that the current demand for aluminium remained poor, and despite major industry wide production cutbacks, stocks continued to increase.

“Even with alumina industry capacity cuts equivalent to 21 million tonnes per year since the beginning of the crisis, including cuts of 12 million tonnes made since January, there is still little improvement in the alumina price,” he pointed out. “At current prices around 70% of the industry is currently operating at a financial loss,” Hodgson said.

He explained that work on the Yarwun alumina refinery expansion would be slowed to reduce the rate of capital expenditure. The change to the construction schedule would result in a revised completion date in the second half of 2012.

It was also revealed that these decisions would result in the loss of around 100 permanent roles at Weipa and approximately 570 contractor roles in Gladstone. Additionally, approximately 35 permanent roles would be lost from the Yarwun refinery and at Boyne Smelters, also in Gladstone.

Hodgson said cost reduction and cash conservation initiatives were being implemented across all Rio Tinto Alcan business units and operations.