Australian mining giant Rio Tinto Ltd has announced that the HIsmelt pig iron production plant in Western Australia is to be shut down for 12 months, citing global pig iron prices and the weak market outlook.
According to the statement released by the company, the HIsmelt plant, which smelts high phosphorous iron ore fines and non-coking coal to produce a premium grade iron product, will be placed on care and maintenance, which means minimizing costs, for 12 months until April 2010.
Rio Tinto had already suspended operations at the plant by the end of 2008, though the plant was scheduled to restart by April this year.
A core team of full-time workers will remain at the site during the closure, with the remaining employees given the option of being considered for employment elsewhere in the company.
"This is a tough decision, but unfortunately one that relates directly to the current market conditions and the uncertainty of a market recovery in the near term. We retain every confidence in the viability of the HIsmelt technology, which is proven and successful, and we remain hopeful for an upswing in the market to enable a restart in the future," Rio Tinto iron ore chief executive Sam Walsh said.
The plant, located at Kwinana on the southern outskirts of Perth, is 60 percent owned by Rio Tinto, 25 percent by Nucor Corporation, 10 percent by Mitsubishi Corporation and five percent by Shougang Corporation.