Tiwai Point Aluminium smelter close down: Won’t create dent on prospects of Ullrich Aluminium and Stabicraft in NZ

The closedown of Rio Tinto’s Tiwai Point Aluminium smelter in New Zealand won’t create any deep impact on the prospects of local manufacturers that count on aluminium to manufacture products. This has been reported by the two popular firms in the industry Ullrich Aluminium and Stabicraft Aluminium boats.

The makers of a vast range of aluminium products for marine, industrial, commercial, domestic and designer applications, Ullrich Aluminium employs around 300 staff in New Zealand and the approximately same number in Australia.

Gilbert Ullrich, CEO, Ullrich Aluminium said: “We won’t run out of aluminium; that is what some of our customers are ringing to ask.”

He also said: “The Company already sourced some of its aluminium from smelters in other countries including Australia and Qatar, and was likely to import more metal from Qatar if the Tiwai smelter closed as planned next year.”

“They make a lot of structural aluminium alloys that we use a lot of.”

“While the Tiwai Point smelter made a fine product, any aluminium smelted from virgin ore rather than scrap metal was suitable for most of Ullrich Aluminium’s needs”, Ullrich said.

Paul Adams, CEO of Invercargill boat builder Stabicraft, said: “We already sourced the majority of its aluminium from overseas.”

Stabicraft employs about 130 people making aluminium boats for New Zealand customers and export markets.

“Most of the metal Stabicraft used was aluminium sheets which needed to be produced at rolling mills, of which there were none in New Zealand”, Adams said.

“Tiwai produces ingots but not finished products that we could source directly from them.”

So Stabicraft had sourced its sheeting from a variety of mills in “France, Bahrain, the United States and China”, he said.

Adams also said: “The closure of the smelter wouldn’t help Southland’s growth plan to boost its population by 10,000 by 2025, and might impact the local demand for boats.

“But the bigger effect would be on companies that supplied the smelter, rather than those that used its products”, he said.

“In all honesty, I don’t think anything from purchasing products is going to change.”

“Aluminium is priced on the London Metals Exchange or in Shanghai and because it is a commodity, people pay whatever the going rate is.”

Gilbert Ullrich – a member of Amnesty International and Free Tibet and a vocal opponent of the free trade agreement with China – stated that China would be the last place that he would buy aluminium from.

“The dumping of throw-away aluminium products from China was more of a threat to Kiwi manufacturers than the closure of the smelter”, he believed.

Ullrich Aluminium operates two extrusions lines in Hamilton and one in Australia and Ullrich said he wasn’t expecting job losses.

“We will ride through it.”

Ullrich said: “The years of uncertainty over the smelter’s future had been one reason why it hadn’t made sense for anyone to invest in a rolling mill.”

“The Tiwai Point smelter was “getting pretty old” and majority owner Rio Tinto had not invested in some innovations, with the market moving towards the use of lighter aluminium alloys”, he said.

Ullrich said EnPot – a new technology coincidentally developed by Auckland University spin-off Energia Potior – had the potential to change the economics of aluminium smelting.

EnPot’s system of heat exchangers which have been deployed by German aluminium-maker Trimet allows smelters to turn up or down their power input to take more advantage of off-peak electricity pricing.

”People are building smelters and they are, to be honest, more efficient.”