Coronavirus Effect: Rio Tinto to close Potline 4 at Tiwai Smelter and relocate 35 staff

The world’s second-largest metal and mining corporation Rio Tinto will close one of its aluminium production lines at Tiwai smelter, New Zealand, in line with the government directives to curb the spread of coronavirus. Such was the announcement made by Rio Tinto’s New Zealand's Aluminium Smelters (NZAS) venture on Tuesday, March 31.

The New Zealand government has announced a four-week lockdown to limit the spread of the coronavirus that has infected more than 750,000 people globally.

According to the report, Rio Tinto will close the potline 4 at Tiwai smelter and relocate the workers to other areas of operations.

"Our focus is on supporting our employees in a time of uncertainty and running a safe and efficient operation to meet our obligations with customers and suppliers who are also challenged at this time," NZAS Chief Executive Stewart Hamilton said in a statement.

This smelter had been kept under review in October due to its inability to generate profit. The smelter produced 340,000 tonnes of aluminium per year.

NZAS plans to work with New Zealand power provider Meridian Energy Ltd to reduce the 50 megawatts electricity that supports potline 4.

Rio Tinto will work on closing the potline this week and reallocate 35 staff to three other production lines.

NZAS is a joint venture of Rio Tinto and Japan’s Sumitomo Chemical Co. The former owns 79.36 per cent of the shares, while the latter 20.64 per cent.

The smelter in the last financial year had made a loss of $46 million after income tax and excluding exceptional, compared to an underlying profit after income tax of $21.6 million in the prior year.