Rio Tinto Closes New Zealand Aluminum Smelter Operations

SEATTLE (Scrap Monster):  Mining giant Rio Tinto announced its decision to close its aluminum operations in New Zealand. It cited high energy costs and bleak short-to-medium-term sector outlook as the reasons for the closure. The decision is likely to affect more than 1,000 jobs.

The company has decided to wind down operations at New Zealand Aluminium Smelters (NZAS) aluminum smelter at Tiwai Point, South Island by August next year. This follows completion of a strategic review that commenced last year, following the company reporting $A43m loss last year.

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Commenting on the development, Alf Barros, Chief Executive, Rio Tinto Aluminum stated that it is very unfortunate that the company, along with its partners, could not find a solution in securing power price reduction aimed at making the smelter a financially viable business. Accordingly, it has decided to terminate the power contract, he added. Meantime, Tim Shadbolt, Southland Mayor said that he was utterly shattered by the closure and that the economic impact of the closure would be huge.

The NZAS uses alumina from Queensland and Western Australian refineries and exports nearly 90% of its aluminum products. It has been one of the nation’s biggest single-site employers.