Wednesday, 16 January 2013 12:41
Northern Territory Chief Minister Terry Mills said Rio Tinto is holding him to ransom over a deal to save an aluminium refinery.
"They are calling the shots. They are putting the pressure on the territory, the territory government on behalf of the territory community and to a lesser degree the Federal Government," he told ABC Radio on Wednesday.
The deal is to save the refinery in Gove, which in turn would save the outback town of Nhulunbuy, which relies on the refinery and mine to sustain many of its 4000 residents.
The company that runs the mine, Rio Tinto subsidiary Pacific Aluminium, has said the facility will stay open if enough gas can be piped there to power the site economically.
The refinery is losing money because it is powered by diesel, which is expensive to buy and ship to Gove, located in eastern Arnhem Land.
The low alumina price and high Australian dollar are also making the operation unprofitable, and Pacific Aluminium has given until 31 January for a decision to be made on the pipeline.
One of the sticking points to building the $900 million pipeline is where to source the gas needed by the company.
Federal Resources Minister Martin Ferguson has said Canberra will carefully consider ways to help construct the pipeline once negotiations to secure the gas have been successfully completed.
Mr Mills said Rio Tinto was not budging from the time frame for a decision that it had set.
But he said allocating Rio Tinto the 600 petajoules of gas it requires for the refinery over the next 20 years could leave the territory without enough gas for its own needs.
"It is not just about Rio, for goodness sake, it is about the Northern Territory and our exposure in the years to come," Mr Mills said.
"Do we trade that secure supply without having that covered to allow this deal to be struck?"
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