Rio Unit Says It Needs Unconditional Gas Supply Pact for Gove

Pacific Aluminium, a unit of Rio Tinto Group (RIO), said it needed a clear and unconditional commitment on gas supply from Australia’s Northern Territory government for its Gove alumina refinery.

Rio started a review of the operation in October because of higher fuel oil costs and low alumina prices, and may suspend production. The territory’s government said today in an e-mailed statement it needed more time to arrange gas supply. A pact would also need a commitment from the federal government to underwrite funding to build a pipeline to supply Gove as well as finding replacement gas for local users, it said.

“Pacific Aluminium needs a clear and unconditional commitment from the Northern Territory government for gas supply to the Gove refinery,” Pacific Aluminium’s Chief Executive Officer Sandeep Biswas said today in an e-mailed statement. A decision on the future of the operation would be made after the review concludes by Jan. 31, he said.

Rio Tinto announced plans in October 2011 to sell 13 aluminum assets, including Gove, to improve the group’s financial performance and transferred smelters, mines and alumina plants to the new unit. Gove in 2012 produced 2.7 million metric tons of alumina and 7.9 million tons of bauxite, according to its website.

To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net