Tiwai Point – A brief history

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An aerial shot of the Tiwai Point aluminium smelter. PHOTO: STEPHEN JAQUIERY

1960s: Tiwai Point is chosen for an aluminium smelter due to its proximity to the then-proposed Manapouri Power Station, the deep sea port of Bluff and the infrastructure of Invercargill.

1971: The smelter commences operations.

October 2011: Majority owner Rio Tinto announces it is preparing to sell the Tiwai smelter in a divestment of 13 mainly aluminium-related businesses.

October 2012: $70 million in capital and maintenance expenditure at the loss-making smelter is halted by Rio Tinto, further underpinning growing concerns Tiwai could face closure.

June 2013: Rio Tinto writes more than half a billion dollars off the value of the ageing plant, leaving it with a value on its books of just $14.8 million, from $606.9 million previously.

August 2013: The signing of an electricity deal with Meridian Energy and a one-off handout of $30 million from the Government guarantee the future of Tiwai for at least two-and-a-half years, NZAS chairman Brian Cooper says. Pacific Aluminium, the Rio Tinto subsidiary which owns Tiwai, is withdrawn from sale.

September 2013: Treasury papers reveal it warned the Government not to give Rio Tinto financial help for Tiwai.

August 2015: Tiwai’s immediate future is assured after NZAS clinches a revised electricity contract with Meridian Energy.

May 2017: Tiwai’s underlying profit is slashed by more than 50% to $25 million, in part due to escalating transmission costs.

May 2018: Underlying earnings increase by $50 million to $75 million for 2017, on the back of consistently higher aluminium prices, and the smelter announces it will reboot its mothballed fourth pot-line, after a six-year shutdown, having secured a more than four-year electricity deal with Meridian Energy.

December 2018: Prime Minister Jacinda Ardern officially opens the recommissioned fourth pot-line, meaning the plant could produce an extra 85 tonnes of metal a day.

June 2019: Tiwai posts underlying earnings of $22 million for 2018, a drop of $53 million on the previous year, saying the operating environment became significantly more challenging during the year.

October 2019: Rio Tinto announces a strategic review of its interest in NZAS, saying three options are being considered: achieving a more competitive power arrangement to allow the smelter to run at its current full capacity, operating as a smaller smelter through curtailment, or closure.

November 2019: Regional leaders announce they will launch a “Fight for Fairness” campaign to avoid the closure of Tiwai. Invercargill Mayor Sir Tim Shadbolt, deputy mayor Toni Biddle and Southland Chamber of Commerce president Neil McAra meet to prepare a strategy to advocate for fair operating conditions.

February 2020: Tiwai reports a net loss of $46 million, a $68 million drop in earnings from the previous year. NZAS cites consistently lower and volatile aluminium prices, coupled with uncompetitive energy prices.

July 2020: Rio Tinto announces it will start planning for the wind-down of operations and the eventual closure of NZAS.

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