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Rio Tinto to Shut New Zealand Aluminium Smelters

Metal News - Published on Thu, 09 Jul 2020

Image Source: Rio Tinto New Zealand Aluminium Smelters
Rio Tinto will start planning for the wind-down of operations and the eventual closure of New Zealand Aluminium Smelters following the conclusion of its strategic review which has shown the business is no longer viable given high energy costs and a challenging outlook for the Aluminum industry. As a result, New Zealand Aluminium Smelters has given Meridian Energy notice to terminate the power contract, which will end in August 2021, when the wind-down of operations is expected to complete.

The strategic review concluded that the smelter, which has made Rio Tinto an underlying loss of NZD 46 million in 2019, is not economically viable due to energy costs that are some of the highest in the industry globally, coupled with a challenging short to medium term aluminum outlook. Extensive discussions with a wide range of interested parties have failed to secure a power contract that will enable the operation to become both competitive and profitable.

During the next 14 months, New Zealand Aluminium Smelters and Rio Tinto will work closely with partners as detailed planning is undertaken to wind-down operations, and eventually close the smelter.

The New Zealand Government said that it will support the Southland economy in the wake of closure of the Tiwai Point aluminium smelter. New Zealand’s Finance Minister Grant Robertson said "This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a blow to Southland and all those who work at the smelter. The smelter supports hundreds of jobs in Southland and the Government will work with the local community to support economic development in the region to help offset this loss. Rio Tinto has indicated it wants to work with the Government to support the community during the wind-down of the smelter.”

New Zealand Aluminium Smelters is a joint venture between Rio Tinto with 79.36% and Sumitomo Chemical Company Limited with 20.64%. It employs around 1000 people directly and creates a further 1600 indirect jobs in Southland.

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Posted By : Yogender Pancholi on Thu, 09 Jul 2020
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