Rio Tinto to close one of four potlines at Tiwai Point aluminium smelter

Tuesday, 31 March 2020

Rio Tinto says it will close one of the four potlines at its Tiwai Point aluminium smelter, potline four, to ensure it can cope with the restrictions at the plant that are needed because of the coronavirus pandemic.

The smelter had been expected to reach a decision today on the long term future of the smelter, but a spokeswoman said no decision had been made on that.

The aluminium smelter was given permission by the Government to continue operating during the coronavirus lockdown.

But it is understood it needed to close one potline in order to meet its obligations to segregate its 800 employees and implement the controls needed to ensure staff need not come into contact with one another.

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New Zealand Aluminium Smelter chief executive Stewart Hamilton said in a statement that the partial shut-down was necessary to ensure the health and safety of its staff and to meet government directives.

'Employees with underlying health issues are self-isolating and our non-operational employees are working from home,' he said.

The 35 staff who normally work on potline 4 will be redeployed to the plant's three other potlines, he said.

Potline 4 originally opened in 1996 but was turned off for six years between 2012 and 2018 before reopening as a result of an uptick in aluminium prices and a new deal with power supplier Meridian.

It is smaller than the smelter's other three potlines, producing about 31,000 tonnes of aluminium a year, or about 9 per cent of the smelter's total output, and consumes about 50MW of electricity.

Rio Tinto would not comment on whether and when potline 4 might reopen, once the coronavirus controls come off.

Meridian said in a statement to the NZX that the smelter was looking to exercise its right to reduce its electricity consumption 'for up to six months'.

Mining giant Rio Tinto owns 80 per cent of the smelter and announced in October that it was conducting a review of the facility, with the possibility that it could partially or fully close.

It had expected to reach a decision by today on the plant's long-term future, but is no longer confirming that deadline.

Global aluminium prices have slumped to a five-year low under US$1550 (NZ$2560) a tonne in the wake of the coronavirus pandemic.

The price had been about US$1750 at the time Rio Tinto announced its strategic review.