Pacific Aluminium the subsidiary of Rio Tinto has announced a net loss of $46 million with its interest in the New Zealand Aluminium Smelter for the year 2019.
Pacific Aluminium holds 79% shareholding in New Zealand’s Aluminium Smelter, and say: “the loss is a result of consistently lower and volatile aluminium prices, coupled with uncompetitive energy prices. Aluminium prices were 15% lower during 2019 than the prior year, averaging $US1791 a tonne.”
The CEO of NZAS, Stew Hamilton said: “the result underscored the reasons for the strategic review at Tiwai Point smelter, which last year made $NZ422 million in payments to New Zealand suppliers, including $NZ58 million to suppliers in Southland.”
NZAS smelter is considered one of the two smelters in the world producing ultra-high purity aluminium and the sole smelter producing by using the electricity generated from renewable sources.
Mr Hamilton said “No matter how hard or efficiently the team here works, we can’t consistently off-set the high price of power and transmission charges we face. This means we swing from delivering small profits to losses for our owners, making our financial viability uncertain”.
"If we can secure an internationally competitive power arrangement that enables us to be consistently profitable and a transmission charge that more accurately reflects the service we receive, NZAS will be well placed to continue to be a vibrant part of the New Zealand economy, providing primary metal to local kiwi businesses and remaining a major export to Japan.”
Mr Hamilton concluded by saying “the electricity costs were the highest of any smelter in the world. Most smelters, especially those located close to generation like NZAS, pay considerably less."
Responses
