Ms FINOCCHIARO - 2013-02-12
During your meetings with Rio Tinto Pacific Aluminium and ENI in a bid to secure a gas supply for the Gove refinery, what did you discover about Rio Tinto’s position in relation to the Gove operation?
ANSWER
Madam Speaker, I thank the member for her question. Two weeks after the election in August last year I announced I had set up a working party to work on gas to Gove and, within one month of coming to office, I confirmed the offer of the previous government and that gas was available if the conditions of replacement are met.
Since that time, I have undertaken an intensive journey to help Pacific Aluminium find a solution to their problem with the cost of energy to Gove. I say it is their problem deliberately, because it was not until Rio Tinto’s subsidiary, Pacific Aluminium, came to government that it became our problem too.
The Northern Territory has a good secure gas supply contracted for its own needs well into the future. Rio Tinto, on the other hand, is faced with energy supply - heavy fuel oil that is, by all accounts, too costly to carry on fuelling their refinery and mining operations in Gove.
How did this suddenly come about you may ask, but I can tell members of this House this is not a sudden occurrence and the situation Rio Tinto found itself in has been in the making over a long period of time. It has been happening since Rio Tinto bought into Alcan’s interest in Gove’s operation back in 2007.
According to Rio Tinto’s new chairman, Sam Walsh, the Gove operation has suffered nearly $1bn in after tax losses since the purchase in 2007. The gas to Gove proposition will require an additional $1.2bn spend just to get it running on gas, and thus give it a chance to be profitable. With gas to Gove in place, the Gove refinery will have at least a 10-year guaranteed supply. Rio says it will give full consideration to the gas supply proposal, and we are hopeful of a decision later this week that will see both the mining and the refinery operations in Gove continue.
ANSWER
Madam Speaker, I thank the member for her question. Two weeks after the election in August last year I announced I had set up a working party to work on gas to Gove and, within one month of coming to office, I confirmed the offer of the previous government and that gas was available if the conditions of replacement are met.
Since that time, I have undertaken an intensive journey to help Pacific Aluminium find a solution to their problem with the cost of energy to Gove. I say it is their problem deliberately, because it was not until Rio Tinto’s subsidiary, Pacific Aluminium, came to government that it became our problem too.
The Northern Territory has a good secure gas supply contracted for its own needs well into the future. Rio Tinto, on the other hand, is faced with energy supply - heavy fuel oil that is, by all accounts, too costly to carry on fuelling their refinery and mining operations in Gove.
How did this suddenly come about you may ask, but I can tell members of this House this is not a sudden occurrence and the situation Rio Tinto found itself in has been in the making over a long period of time. It has been happening since Rio Tinto bought into Alcan’s interest in Gove’s operation back in 2007.
According to Rio Tinto’s new chairman, Sam Walsh, the Gove operation has suffered nearly $1bn in after tax losses since the purchase in 2007. The gas to Gove proposition will require an additional $1.2bn spend just to get it running on gas, and thus give it a chance to be profitable. With gas to Gove in place, the Gove refinery will have at least a 10-year guaranteed supply. Rio says it will give full consideration to the gas supply proposal, and we are hopeful of a decision later this week that will see both the mining and the refinery operations in Gove continue.
Last updated: 09 Aug 2016