Reuters reported that Rio Tinto Limited will close its HIsmelt pig iron production plant in Australia.

Rio said in a statement that the plant produces a raw material used in steelmaking and started up in 2006. It will be placed on care and maintenance, a means of minimizing costs until April 2010.

It had already suspended operations at the plant in December as waning demand for raw materials from steel mills became evident, though the plant was scheduled to restart by April.

The company said that a core team of workers will remain at the west Australia site during the closure.

HIsmelt is 60% owned by Rio, 25% by Nucor Corporation, 10% by Mitsubishi Corporation and 5% by China's Shougang steel group. Last year, just over 100,000 tonnes of pig iron was produced for export.

The plant employs a process where iron containing materials and non coking coals are injected directly into a molten iron bath to produce a high quality iron product.

Rio and its partners have long touted the process as a potential replacement for the traditional blast furnace method of iron making, though the operation has yet to come close to producing at a design rate of 800,000 tonnes per year.

(Sourced from Reuters)