DESPITE posting a $100 million loss for last year, an improved aluminium market and new electricity deal has the Tiwai Point smelter boss announcing it can sustainably operate until its 2024 closure.
Rio Tinto’s wholly-owned subsidiary Pacific Aluminium (New Zealand) Ltd reported financial results relating to its interest in New Zealand’s Aluminium Smelter Ltd (NZAS), showing the underlying net loss of NZ$100 million for 2020.
NZAS chief executive and general manager Stew Hamilton said the result underscored the challenging market environment of 2020, compounded by the input costs of the business.
“In 2021, we have seen an improved aluminium market and in conjunction with the new electricity agreement for the smelter, announced in January 2021, this enables a sustainable extension of operations at Tiwai Point.”
Despite the loss incurred, the team was proud of its work during the past year, and proud of its ability to transform New Zealand’s sustainable hydro power generation into a valuable export product, he said.
“The team have performed at a consistently high level even when facing the ongoing challenge presented by the Covid-19 pandemic and our strategic review.”
This review resulted in the smelter’s death sentence last year.
It concluded the smelter was not economically viable due to energy costs, coupled with a challenging short to medium term aluminum outlook. Last year, NZAS paid NZ$394 million to New Zealand suppliers, including NZ$54 million to suppliers in Southland, it said in a press release.
The smelter was working with the community, Ngai Tahu and the New Zealand Government on dealing with its waste and remediation of the site at Tiwai Point as well as the best outcomes for a transition beyond 2024, he said.
Rio Tinto last week promised to pay for the clean-up of waste from the smelter across the south.
This included discarded dross and to significantly reduce cyanide getting into the marine environment.
It also said it would take over the $4 million in funding commitments already pledged by the Government, southern councils and landowners to deal with the ouvea premix waste stored in Mataura.