The future of the Gove alumina refinery is again in doubt following the announcement by mining giant Rio Tinto that is reintegrating its subsidiary Pacific Aluminium in the parent company because it could not sell it for a good price.

The Northern Territory Government says it believes the move will not have an impact on continuing negotiations for a new gas supply deal to keep the refinery operating but Rio Tinto has not commented on the future of the talks.

Pacific Aluminium is made up of several assets, including the Gove alumina refinery and bauxite mine near Nhulunbuy in East Arnhem Land.

It was first set up as a separate company by Rio Tinto in October 2011 with the intention it would be sold.

At the time, Rio Tinto said it wanted to sell 13 aluminium units worldwide, including refineries and smelters in Australia, as the world's second-biggest miner sought to streamline its Alcan aluminium business.

Now, following a comprehensive review, it says it has decided the plan to sell off Pacific Aluminium "for value" is not possible in the current economic climate.

Pacific Aluminium chief executive officer Sandeep Biswas, who has been with the company since it was formed, has been replaced.

From this week, Philip Strachan will take over the reins of the Gove operations.

Mr Strachan will also retain his current role as Rio Tinto Alcan's chief financial officer.

Mr Biswas will stay on until the end of the year as part of a transition process.

Rio Tinto says Pacific Aluminium alumina production was 20 per cent lower in the first half of this year compared to the same period last year.

It says the result was influenced by the shutdown of a section of the refinery in late February after problems with heat exchangers at the plant.

The future of the town of Nhulunbuy hinges on the Gove refinery.

About 1,500 people of its population of almost 4,000 are employed in jobs linked to the operations.

 

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