According to a report on July 28, The Tiwai Point aluminium smelter, owned by Rio Tinto and the Sumitomo Group via joint venture New Zealand Aluminium Smelters Limited (NZAS), has begun corresponding with power companies to be able to continue operations beyond 2024.
"There is lots of work to do, but we believe there is a positive pathway to securing a long-term presence for the smelter," NZAS chief executive Chris Blenkiron said.
He also said that assurance of job retention was important for the staff and the people of Southland.
Meridian, the New Zealand’s largest renewable energy generator, said in a statement that it would consider entering into a contract for power supply to the Tiwai smelter.
Previously, Meridian’s chief executive Neal Barclay said it would not further provide power to the smelter at the lowest prices once the ongoing contract expired.
The future of the smelter had been a hot topic of discussion for many years. Initially, owner Rio Tinto threatened the closure of the plant in 2020 due to surging energy costs. But in early 2020, it reached an agreement with Meridian for power supply at cheaper costs, which kept the smelter going for another four years.
Andrew Harvey-Green, an analyst from Forsyth Barr equities, said he would be very, very surprised if the Tiwai Point could manage to secure power from anywhere at the current price point.
He said, "I think Meridian has been fairly open to say that was a one-off situation and we're looking at quite a different situation [now].I would say there is a very, very low to probably zero chance that Rio [Tinto] would get a similar price."
Harvey-Green further analysed that Meridian could supply power to the Tiwai Point on some clauses that would allow the power company to restrict supply during low generation of energy.
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