A further decision on the future of the Tiwai Point aluminium smelter will be announced to staff in four to six weeks, as stated by Forsyth Barr, a New Zealand owned investment management services firm.
The Tiwai aluminium smelter’s majority stakeholder, Rio Tinto, announced in June’20 that it planned to pull down the smelter by August’21 after failing to reach an agreement over the desired reduction in its power bills.
Forsyth Barr said: “Electricity industry investors should assume the smelter would close by the end of August next year and that anything else would be an upside.”
The New Zealand Government turned rigid that there would be no further government funds going into the smelter and that it would rather support Southland in creating new opportunities for the 1000 staff and contractors it employs.
But Forsyth Barr said: “Talks had been continuing between Rio Tinto and the smelter’s major power supplier, Meridian Energy, which could see the smelter’s closure delayed.”
Neal Barclay, the CEO of Meridian Energy, said: “Last month that Rio Tinto had rejected a pretty compelling four-year deal put together by power companies.”
“That would have delivered a $50 million cost-saving to the smelter in its first year, rising to between $60m to $70m annually after that”, he said.
However, there is speculation a deal new could be reached that would buy Meridian Energy more time to find other customers for the power that will be freed-up from its Manapouri hydro scheme when the smelter closes.
Marc England, CEO, Genesis Energy has cast his doubt on the smelter closing as planned next year, telling an audience at the downstream electricity conference in Wellington on Monday that he thought that was only possible.
Forsyth Barr said: “It had been able to confirm Rio Tinto had told New Zealand Aluminium staff that a final decision was four to six weeks away”.
As per a spokeswoman from Rio Tinto, she addressed the speculation in a newspaper report that the smelter had told contractors to prepare for the September reopening of the smelter’s fourth and smallest potline, which it closed in April’20 because of operating requirements during the COVID-19.
“The smelter had no current plans to reopen the potline”, she said.
Forsyth Barr concluded by saying: “It was ironic that aluminium had one of its best months on world markets in the wake of Rio Tinto’s June closure statement.”
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