Departing Tiwai Pt smelter boss reflects on tough year

Outgoing New Zealand Aluminium Smelters general manager Ryan Cavanagh has released his final review on the Tiwai Pt smelter.

Mr Cavanagh, who has been the company's general manager since 2009, is leaving this week to take up the role of general manager at Pacific Aluminium's Gove bauxite mine and alumina refinery in Australia's Northern Territory.

The New Zealand Aluminium Smelters 2012 Sustainable Development Review outlines its performance in health and safety, people commitment, energy, power, financial strength, environment, community operational excellence and market position.

The report shows the Tiwai smelter consumed 17,778,962 gigajoules last year.

Electricity intensity was 54.4 gigajoules/tonne of saleable aluminium and energy intensity was 71.9 gigajoules/ tonne of saleable aluminium.

NZ Aluminium Smelters produced 326,963 tonnes of saleable aluminium about 28,000 tonnes below planned production.

That was a result of the shutdown of Reduction Line 4, which was removed from circuit in April 2012 because of the deterioration of market conditions.

Safety performance at the smelter improved during 2012, with five recordable injuries, which was the second-best performance in the past 41 years, the report shows.

Last year was undoubtedly one of the most challenging years in the smelter's 42-year history, Mr Cavanagh said.

The uncertainty surrounding the future of the plant, along with the divestment of NZ Aluminium Smelters from Rio Tinto as part of Pacific Aluminium had resulted in an extremely unsettling time for employees and contractors at the smelter, he said.

NZ Aluminium Smelters faced unprecedented market conditions that resulted in cash losses of $50 million last year. The increase in electricity prices in the new contract, which took effect from January 1, placed a significant cost burden on the smelter, he said.

"We remain convinced a mutually acceptable commercial outcome is a realistic goal . . . Tiwai Pt smelter is well- maintained and could operate for another 20 to 30 years."

Further cost-saving initiatives would be pursued this year in an effort to make NZ Aluminium Smelters a viable business, he said.

In addition to stopping planned capital expenditure, ongoing programmes to reduce costs included a review of maintenance services during the first half of this year.

He was grateful to work with such a dedicated team at NZ Aluminium Smelters, who were constantly generating and implementing cost-saving ideas while focusing on safety and process stability, he said.