Gove closure likely: analysts PDF Print E-mail
Friday, 08 February 2013 08:24

A recent decision to install Sam Walsh as Rio Tinto managing director makes the miner even more likely to shut down its giant Gove refinery, according to independent analysts.


Independent gas analyst Peter Strachan said Mr Walsh's background was in the market-darling iron ore division of Rio Tinto and he had called for big write-downs in the aluminium division.

Mr Strachan said that once closed, it was unlikely Rio, which runs the facility via its subsidiary Pacific Aluminium, would reopen it.

"It will be like a dog going back to its own vomit," he said.

Lew Fellows, WA state manager at Patersons Securities, also said it was unlikely Rio would keep the refinery open.

"You really have to discount away the other issues and look at it from a commercial point of view," Mr Fellows said.

He said for the people of Nhulunbuy, the move would be crushing but that similar decisions had been made by miners in the past.

A review of the Gove refinery is underway, and a decision by Rio on whether to keep running the refinery is expected within days.

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