Mining giant Rio Tinto says that it will suspend alumina production at its Gove refinery in Australia's Northern Territory, axing about 1100 jobs.
Rio - the owner of the Tiwai Point aluminium smelter in New Zealand - says the Gove refinery is no longer a viable business in the current market, so it will now focus on its nearby bauxite operations.
The company did not say how many jobs would be lost as it works on the scope and phased timing of the suspension, the ABC reports.
About 1500 workers are employed at the Gove site, with over 350 of them working on the bauxite operations and the rest at the refinery.
Rio chief executive Sam Walsh said on Friday it was an extremely difficult decision that would have a significant impact on workers and the state generally.
The refinery had been losing money for years due to long-depressed global aluminium prices and over-supply.
Both the Australian and territory governments offered subsidised gas to Rio Tinto and to take on the financial risk of a gas pipeline, but Northern Territory chief minister Adam Giles earlier this year decided to cut the amount of gas he was willing to subsidise for the refinery.
Rio Tinto said key factors influencing its decision were continuing low alumina prices, a high exchange rate and substantial after-tax losses for the refinery despite considerable efforts to improve performance.