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Tiwai Safe Till December 2024, NZAS & Meridian Reach Agreement

Jan 14, 2021
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Rio Tinto has reached an agreement on a new electricity agreement with Meridian Energy that allows New Zealand’s Aluminium Smelter (NZAS) to continue operating the Tiwai Point aluminium smelter until December 31, 2024. The extension provides certainty to employees, the local community and customers while providing more time for all stakeholders to plan for the future.

While discussions with the New Zealand government are progressing in relation to their commitment to address the smelter’s high transmission costs, a new agreement has been reached with Meridian Energy in relation to power prices, making the smelter economically viable and competitive over the next four years.

The extension also provides time for detailed closure studies to be completed and for NZAS to support the government and Southland community in planning for the future. Plans for eventual closure of the Tiwai Point smelter will include extensive stakeholder consultation, including within the Southland community and reflect the company’s robust closure and remediation standards.

Southland Mayoral Forum Chair and Gore District Council Mayor Tracy Hicks says Tiwai Pt Aluminium Smelter remaining open until 2024 is “great news” for the region.

“This morning’s announcement is great news for Southland, and most importantly for the people whose livelihoods depend on the smelter,” Mr Hicks said.

“I would however stress that this is an important step along the way to ensure Southland has a broad-based, sustainable future economically.

“What this extension does for Southland is that it gives us time – time to evaluate and develop the opportunities presenting themselves and to make sure the power generated at Manapouri stays in the southern region to generate jobs,” Mr Hicks said.

“Leaving no stone unturned to ensure there is exciting growth ahead for the province is my focus.”

Rio Tinto Aluminium chief executive Alf Barrios said “We are pleased to have reached an agreement with Meridian Energy that will enable the Tiwai Point smelter to continue producing some of the lowest carbon aluminium in the world.

This agreement improves Tiwai Point’s competitive position and secures the extension of operation to December 2024. It also provides Rio Tinto, the New Zealand government, Meridian, and the Southland community more time to plan for the future and importantly gives our hard-working team at Tiwai and our customers the certainty they deserve.”

The deal between Tiwai Point and Meridian Energy to keep the smelter open until the end of 2024 is good news for the staff, contractors and wider Southland community, MP for Invercargill Penny Simmonds says.

“Tiwai Point is an important part of Southland’s economy and it is vital to have this certainty for the next four years.

“This extra time creates an ideal opportunity to work through a transition to new options for Southland and the energy industry.

“There are a number of new opportunities being discussed around hydrogen, and this extension will create the space to do the business case and take the community along.

“National will be working proactively with interested parties to ensure this key industrial site continues to benefit the local and national economy for future years.”

In July 2020, Rio Tinto announced the conclusion of a strategic review of the smelter and a decision to wind down operations by August 2021 due to high energy and transmission costs.
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.

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