fbpx

Rio Tinto To Close Tiwai Aluminium Smelter Following Strategic Review

Jul 09, 2020
6298 Views

Rio Tinto will start planning for the wind-down of operations and the eventual closure of New Zealand Aluminium Smelters (NZAS) 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, NZAS 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 NZ$46m 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, NZAS and Rio Tinto will work closely with partners as detailed planning is undertaken to wind-down operations, and eventually close the smelter.

Rio Tinto Aluminium chief executive Alf Barrios said “We recognise the decision to wind-down operations at NZAS will have a significant impact on employees, the community and our customers.

“It is not a decision we have made lightly and without significant careful consideration. It is very unfortunate we could not find a solution with our partners to secure a power price reduction aimed at making NZAS a financially viable business. We will therefore terminate the power contract and move to close the operation.

“We are committed to working with our partners as we progress through detailed planning towards closure and we will do all we can together with the government to find ways to support the Southland community.”

NZAS is a joint venture between Rio Tinto (79.36%) and Sumitomo Chemical Company Limited (20.64%). It employs around 1000 people directly and creates a further 1600 indirect jobs in Southland.

Two Huge Wrestling Nights Celebrating Southern Rumble 5 Year Anniversary
Entertainment, News
223 views
Entertainment, News
223 views

Two Huge Wrestling Nights Celebrating Southern Rumble 5 Year Anniversary

Aimee Wilson - Aug 06, 2020

If you love a bit of adrenaline then head along to the Invercargill Working Mens’ Club this weekend. The first…

What’s Lurking Behind the Four Percent Job Figure?
Business, Jobs
47 views
Business, Jobs
47 views

What’s Lurking Behind the Four Percent Job Figure?

News Desk - Aug 06, 2020

A shock drop in official unemployment numbers caps off the "weirdest quarter" in New Zealand's economic history. ‘Beware’ and ‘unbelievable’…

Are Your Blinders On Campaign Launched
Community, News
220 views
Community, News
220 views

Are Your Blinders On Campaign Launched

News Desk - Aug 06, 2020

An innovative social media campaign has been created to encourage Southland parents not to shy away from those awkward conversations…

Mal’s Music Memory – Novelty Songs
Entertainment, News
377 views
Entertainment, News
377 views

Mal’s Music Memory – Novelty Songs

Malcolm Gayfer - Aug 06, 2020

Hi there team, welcome to another month of Mal's Music Memory's with Little Fire MusicWorks. As it's August it's Novelty…

Paddon Appearance a Treat for Rally Spectators
Motor Sport, News
84 views
Motor Sport, News
84 views

Paddon Appearance a Treat for Rally Spectators

Lindsay Beer - Aug 06, 2020

Spectators at this year’s Catlins Coast Rally on Saturday will get a rare treat as Hayden Paddon makes an appearance…