Ceramic Industry

Rio Tinto Alcan to Slow Refinery Expansion, Curtail Bauxite Production (posted 4/8/09)

April 8, 2009
Cost reduction and cash conservation initiatives are being implemented across all Rio Tinto Alcan business units and operations.

Rio Tinto Alcan recently announced that it will slow the construction of the Yarwun alumina refinery expansion in Gladstone and curtail annual bauxite production at its Weipa mine to 15 million metric tons (from 19.4 million metric tons in 2008) due to the sharp fall in alumina and aluminum demand and prices in recent months.

Steve Hodgson, Rio Tinto Alcan Bauxite and Alumina president, said the depressed state of the market and a sharp cutback in demand made further tough decisions necessary. He said that the current demand for aluminum remained poor and, despite major industry-wide production cutbacks, stocks continue 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,” Hodgson said. “At current prices, around 70% of the industry is currently operating at a financial loss.”

Work on the Yarwun alumina refinery expansion will be slowed to reduce the rate of capital expenditure. The change to the construction schedule will result in a revised completion date in the second half of 2012. Around 100 permanent roles will be lost at Weipa and approximately 570 contractor roles in Gladstone. Additionally, approximately 35 permanent roles will 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. “We are strongly focused on minimizing costs and conserving cash, and this work is ongoing in our operations as we continue to closely monitor market conditions. We will ensure all impacted employees receive their full entitlements and ensure they have the support and assistance they need in the coming weeks.”

Visit www.riotinto.com for additional details.

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