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Aluminium|Business|Energy|Financial
Aluminium|Business|Energy|Financial
aluminium|business|energy|financial

Rio Tinto secures future of NZ aluminium smelter, acquires full ownership

31st May 2024

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

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Commodities giant Rio Tinto announced on Friday that it would keep New Zealand’s sole aluminium smelter operational until at least 2044, following the completion of new 20-year electricity supply agreements.

The Tiwai Point smelter, owned and operated by New Zealand Aluminium Smelters (NZAS), has secured these contracts with key energy providers.

The agreements involve contracts with Meridian Energy, Contact Energy and Mercury NZ, setting pricing for 572 MW of electricity to meet the smelter’s needs.

NZAS CEO Jérôme Pécresse said he was pleased with the collaborative effort that led to these deals.

“They give us confidence that our New Zealand workforce and assets can continue competitively producing the high purity, low-carbon aluminium needed for the global energy transition,” he said.

The new electricity arrangements include 20-year demand response agreements with Meridian Energy and Contact Energy, under which NZAS may be requested to reduce electricity consumption by up to a total of 185 MW. This will help ensure secure electricity supply to New Zealand homes and businesses when it is most needed.

In a related development, Rio Tinto has agreed to buy Sumitomo Chemical Company’s (SCC’s) 20.64% interest in NZAS, taking full ownership of the smelter.

The financial terms of the acquisition have not been disclosed.

Rio Tinto is also set to acquire SCC’s 2.46% interest in Boyne Smelters Ltd (BSL), which operates the Boyne Island aluminium smelter in Gladstone, Australia. This will increase Rio Tinto’s interest in BSL to 61.85%.

Both transactions are part of SCC’s broader business portfolio transformation and are subject to approvals by New Zealand’s Overseas Investment Office and Australia’s Foreign Investment Review Board.

Edited by Creamer Media Reporter

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