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Rio Tinto says it wants to delay closure of Tiwai Point Smelter

Author
RNZ,
Publish Date
Tue, 8 Feb 2022, 2:33pm
(Photo / RNZ)
(Photo / RNZ)

Rio Tinto says it wants to delay closure of Tiwai Point Smelter

Author
RNZ,
Publish Date
Tue, 8 Feb 2022, 2:33pm

The Tiwai Point aluminium smelter wants to keep operating past its previously signalled closure date in 2024. 

In a statement issued by the smelter's majority owner, Rio Tinto, it said it believed there was a long-term future for the Bluff operation. 

"With a global strategy focused on decarbonisation and growth (released in October last year) Rio Tinto does see a positive pathway for New Zealand's Aluminium Smelter (NZAS) to continue operating and contributing to the local and national economies beyond 2024," NZAS chief executive Chris Blenkiron said. 

"We are working closely with Ngāi Tahu, Southland and key industry leaders to find the best way to achieve this." 

The comments come as aluminium prices climbed to new highs, eclipsing the $4300 per tonne mark in January, according to a research note from Forsyth Barr. 

The upward pressure on prices was the result of China's decision to reduce carbon emissions by scaling down some of its coal-powered plants and high electricity prices curbing European production. 

About 85 per cent of the power consumed by Tiwai Point is renewably generated, with most of that supply coming from the Manapouri hydroelectric power station which is owned by Meridian Energy. 

Blenkiron said as a producer of some of the highest purity, lowest carbon aluminium in the world, NZAS was well placed to supply economies focused on decarbonisation. 

In a statement to the stock exchange, Meridian Energy said it had not had discussions with the smelter's owner about a new power contract beyond 2024. 

The future of Tiwai Point was in jeopardy in 2020 after Rio Tinto announced plans to shut the smelter down in 2021, citing expensive electricity costs. 

However, in 2021 it announced it had secured a cut-price power deal from Meridian and Contact Energy to keep it open for another four years. 

Meridian Energy chief executive Neal Barclay later said it would not give the smelter any more rock bottom price deals once the current contract expired, even if it wanted to stay. 

- RNZ