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Rio begins breakdown of HIsmelt
The West Australian

Rio Tinto has finally called time on one of the State's few examples of value-adding minerals processing, starting the process of breaking down its HIsmelt pig iron plant at Kwinana for shipment to China.

_WestBusiness _understands a Chinese consortium, including Shandong Steel and Shandong Melong Petroleum Co, are in the process of building a smelter based on the Rio technology, with the assistance of the global resources giant. Parts of the Kwinana plant are going to China as part of the agreement.

A spokesman for Rio Tinto confirmed yesterday that the decommissioning process had begun. He said a number Rio staff with experience at the smelter were in China, helping the Chinese consortium build their own facility.

He said the HIsmelt decommissioning was expected to be completed in the next few months, but no decision had yet been made about the fate of the site, which also contains common-user infrastructure.

HIsmelt was the result of value-adding commitments given by Rio to the State Government in return for approval to mine the massive Yandicoogina iron ore deposit in the Pilbara.

The technology allows high-phosphorous iron ore to be smelted using non-coking coals. Rio and its partners - Nucor Corp (25 per cent), Mitsubishi (10 per cent) and Shougang Corp (5 per cent) - invested more than $1 billion in the technology and plant, which was put on care and maintenance in late 2008, resulting in the loss of most of the 130 jobs on the site.

The operations were a commercial flop because of a lack of a local market for the end product. But the technology is still highly regarded by Rio - and major steelmakers are prepared to pay licensing fees to access the know-how developed.

In 2011 Rio signed a memorandum of understanding with India's Jindal Steel and Power, which would have resulted in the plant being shifted to India, but it is understood the Chinese consortium eventually offered better terms than Jindal. The HIsmelt intellectual property is licensed to a Dutch smelter.

Last year HIsmelt managing director Denise Goldsworthy, then also boss of Rio's Dampier Salt operations, was tapped by new Rio chief executive Sam Walsh to become chief commercial officer of Rio's autonomous haul truck project, responsible for negotiating a multibillion-dollar long-term deal with Komatsu for the global supply of driverless trucks to Rio's mines.