Global miner Rio Tinto has announced it is suspending alumina production at its Gove refinery in the Northern Territory, leaving hundreds of jobs in doubt.

It comes after the company abandoned plans to convert its refinery to gas power and announced it was reviewing future operations.

Rio says it will continue its bauxite operations at the plant.

The Gove refinery is serviced by the town of Nhulunbuy and most of its population of about 4,000 people are linked to the operation of the mine and refinery.

In a statement released to the share market, Rio Tinto chief executive Sam Walsh said it was a “sad day for everyone associated with Gove.”

“It has been an extremely difficult decision and we recognise it will have a significant impact on our employees, the local community and the Northern Territory,” he said.

“There is no doubt it is a challenging path ahead. We are working in partnership with the Northern Territory and Australian Governments, the broader community and Traditional Owners to identify initiatives to create new opportunities for the people of Nhulunbuy.”

Low alumina prices and high dollar behind decision

The statement says production will continue until early next year.

“Key factors influencing the decision were continuing low alumina prices, a high exchange rate and substantial after-tax losses for the refinery despite considerable efforts to improve refinery performance during that time,” the statement said.

“A priority will be establishing long-term certainty for the bauxite operation and its 350 employees and contractors.”

Rio Tinto says all “practical scenarios” were considered for continuing alumina production.

“There is nothing more the Northern Territory Government could have done to help secure a long-term future for the refinery.”

A community meeting will be held in Nhulunbuy this morning to discuss the suspension.

Rio Tinto’s share price have climbed ahead after the announcement.

At 10:30am (AEDT), it was trading 2.7 per cent higher at $66.12.