The Australian reported that RIO Tinto’s USD 400 million Hismelt pig iron plant at Kwinana, south of Perth will remain mothballed for longer than planned even though iron ore and steel prices have recovered from the global financial crisis much faster than anyone expected.

The extended closure is bound to fuel speculation that the demonstration plant, which was built with USD 50 million grants from the Howard government, will remain closed. Hismelt started in 2006 but was put on 12 months of care and maintenance in March last year because of depressed global pig iron prices and poor market outlook.

A Rio spokesman said last week that no decision had been made on a restart, despite prices recovering and Australian iron ore now fetching more than at the peak of the previous boom.

He said that the plant is still under care and maintenance. No reason was given for the extended suspension.

(Sourced from www.theaustralian.com.au)