Burden of Tiwai smelter uncertainty recognised

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NZAS chief executive Stew Hamilton at Tiwai Point Aluminium Smelter.

THE delay of Tiwai Point aluminium smelter’s strategic review weighing on the minds of staff and the Southland community, is something New Zealand Aluminium Smelters (NZAS) chief executive Stew Hamilton says he is conscious of.

However, it would still be some time before the outcome was known, Mr Hamilton said.

Last year, smelter owner Rio Tinto announced it would carry out a strategic review of the Tiwai Point operation, indicating it could result in the Southland smelter’s closure and the loss of about 800 jobs.

The results of the review had been expected to be released by March, but a decision on the smelter’s fate had been postponed due to the Covid-19 situation.

“The strategic review does have an impact on the way people feel and their well-being… We are certainly progressing as fast as we can in the terms of the outcome.

“We are conscious that it is weighing heavily on our people’s minds as well as impacting the community.”

No decision had been made; however, Mr Hamilton said he expected an announcement this year.

NZAS had been pushing for the review as staff sought certainty while the smelter lost money.

“We can’t continue to suffer those losses day by day, month by month.

“Every day someone asks me about it…”

Mr Hamilton said the recent Electricity Authority announcement, proposing changes to transmission costs, would have some benefits for the company but they would not be enough to affect the outcome of the strategic review.

The main benefit would be a reduction of about $10 million in transmission costs.

“It is a relatively small component compared to the bill that we pay that is $67 million a year.”

Another would be the authority’s yet-to-be-developed changed guidelines on prudent discounts, though those were unlikely to have a significant impact and would be too late to affect the outcome of the strategic review, he said.

He said the smelter had also been badly affected by the Covid-19 pandemic as the price and demand for aluminium dropped.

“It is pretty early on, and will depend on how the market responds, but certainly we felt a significant impact.”

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