Bluff Aluminium smelter to cut production by 15percent

New Zealand's biggest power user, the Aluminium smelter at Bluff has cut production by 15% as world Aluminium prices slump and the company faces pressure from a high New Zealand dollar.

International commodity prices across the board have been hit hard by the ongoing European sovereign debt crisis. The smelter company posted a return to profit in the past financial year to the end of 2011, from a loss in the year before but only because of a one off gain.

The smelter was put up for sale by Australian miner Rio Tinto Alcan last year but world Aluminium prices have slumped 29 per cent in the past 12 months and Rio Tinto says it is in no rush to sell. The smelter is a significant exporter and employs about 800 people.

Mr. Paula Checketts acting GM of New Zealand Aluminium Smelters said that NZAS was facing tough market conditions as a result of low Aluminium prices and the pressures from the exchange rate against the US dollar. NZAS is leaving no stone unturned as we look for opportunities to improve and sustain our business position. One of the smelter's lines has been out of action since April, cutting production capacity by about 15%.

He said that the decision to remove Line 4 was taken due to the deterioration of market conditions, including the uncertainty around electricity market pricing, the high exchange rate and low metal prices. We are closely monitoring this situation and restart options will be considered when economically viable.