After a long, slow, downward slide, Rio Tinto will close its Gove alumina refinery, taking with it some 1500 jobs and, perhaps, the soul of the town.
Rio Tinto on Friday announced what many had feared for the past year: that the refinery is no longer a viable business in the current market.
The company is not saying how many jobs will be lost as it works on the scope and phased timing of the suspension.
About 1500 workers are employed at the Gove refinery, while 350 people work at the bauxite operations, which will continue.
Rio chief executive Sam Walsh says it’s an extremely difficult decision that will have a significant impact on workers and the Northern Territory as a whole.
“There is no doubt it is a challenging path ahead,” he said.
The refinery has been losing money for years due to long-depressed global aluminium prices and over-supply.
Both the federal and territory governments offered subsidised gas to Rio and to take on the financial risk of a gas pipeline to prevent Friday’s decision.
“I want the people of Gove to know that my government and I fought until the end to keep the refinery open, but Rio Tinto has disappointingly decided that the economics of the business no longer stack up,” NT Chief Minister Adam Giles said in a statement on Friday.
“I know this is a dark day for the people of Gove, but … we will be working with Rio Tinto in supporting the community over the difficult months ahead.”
He held a panel meeting that included Rio management at Nhulunbuy’s town hall on Friday morning, as hundreds of residents crammed in to hear how the town will be salvaged.
About 4000 people live in Nhulunbuy and about 1500 work at the Gove refinery. Most of the other businesses in the area support the mining activity.
“It was as full as I’ve ever seen that place. People were hanging out the doors and windows,” said Dean Johnson, a bore operator at Rio’s bauxite mine.
“It was mainly businesspeople who’ve invested in the town in one way or another. Those poor people are losing out twofold, they’ve got families and bought houses here,” he told AAP.
“There were some tears, and you could hear it breaking up in their voices. Towards the end it got a bit bitter.”
Rio says key factors in the decision were continuing low alumina prices, a high exchange rate and substantial after-tax losses for the refinery despite considerable efforts to improve performance.
It said it would try to create new opportunities for employees, which could involve fly-in fly-out work in the Pilbara or on Darwin’s Inpex LNG plant.
Earlier this week, the NT government was putting in place contingency plans to bail out the township, looking at whether airlines and supermarkets would abandon Nhulunbuy, how many schoolchildren would remain, demands on the hospital and impacts on homeowners with home loans.
Mr Giles said Rio would continue to provide power, water and sewerage and, along with the government, was seeking assurances from airlines that they would continue to service the area.
The government will continue to provide key public services such as hospitals, schools and police.