High aluminium prices will keep Tiwai smelter functional for an extended period: NZ Govt. officials

The government officials of the island country in the southwestern Pacific Ocean, New Zealand are positive that Tiwai Point aluminium smelter will remain operational for an extended period if the aluminium prices stand high.

However, the officials have also warned that there are risks included, as it will accumulate millions of tonnes of greenhouse gas emissions.

The southernmost region of New Zealand, Southland has been adapting to survive with losing hundreds of jobs and a rise of spending when the aluminium smelter closes at the end of 2024.

While the treasury documents revealed under the Official Information Act (OIA) evaluated strong aluminium prices drove the smelter with half a billion dollars better from the existing year.

The officials update to the ministers stated: “While NZAS' electricity supply contract with Meridian ends in December 2024, in conjunction with its announced closure, we assess that there is a good prospect that the smelter will continue to operate beyond that date if the outlook for the aluminium market remains sufficiently positive.”

New Zealand’s largest energy producer, Meridian Energy said: “Our planning and forecasts assume a December 2024 closure.”

In the island nation, cheap power deals for Tiwai have been a politically controversial issue for years.

The update also added: “The Climate Change Commission had identified risks from New Zealand Aluminium Smelters (NZAS) keeping going.”

“It calculated this could add 12 million tonnes of CO2 emissions from next year until 2035, well above the commission's projected transition pathway."

"This is because smelter closure assumes that more emissions-intensive electricity production will be taken offline due to Manapouri's surplus supply entering the grid."

“A key commission recommendation is the country decarbonise the energy system, including by favouring electricity that has a low emissions impact.”

However, many businesses and iwi are exploring if Tiwai Point aluminium smelter can be used for green hydrogen production.