Dennis Barnes, CEO, Contact Energy NZ is optimistic that Rio Tinto, the major-owner of Tiwai Point Aluminium smelter can keep it open, but with an upgrade of the power grid - for when the facility does eventually close - will happen sooner rather than later.
Rio Tinto's review of the ageing smelter - which uses about 12% of New Zealand's power output - is due by the end of March’20.
Contact Energy, which has large-scale hydro generation capacity in the south of the South Island, said Rio Tinto's review of Tiwai remained "firmly on the radar".
A spokesperson of Rio Tinto said, "A disorderly exit of the smelter would be a poor outcome for New Zealand and we are actively engaged in negotiations for revised terms for electricity supply to Tiwai.”
The contract negotiations are between Meridian and the smelter. Contact Energy provides contract support to Meridian.
Dennis Barnes said: "The smelter is one asset in a massive multinational, so we are in the lap of the gods in terms of the decision-making and their long-term ambitions.”
"But given its low carbon nature, the smelter's cross-shareholding with Sumitomo Chemical (which owns 20 per cent), and the type of technology they use, it is set it up well for the future of high purity production.”
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