Rio Tinto confirms it is continuing to seek help for smelter from Government

Friday, 28 August 2020

The timeframe for closing the Tiwai Point smelter is not yet set in aluminium, Rio Tinto’s comments confirm.

Rio Tinto has responded to speculation that it is engaged in fresh talks with the Government on the future of the Tiwai Point aluminium smelter, indicating it is not ruling out a deal to keep it open for longer.

Meridian chief executive Neal Barclay said on Wednesday that it believed Rio Tinto was having further discussions with the Government over its electricity transmission bills, which are charged by Transpower.

Rio Tinto announced in June that it planned to close the smelter by August next year, with the loss of jobs for 1000 staff and contractors.

Its Brisbane-based managing director of pacific operations Kellie Parker responded to Barclay’s comments by saying the company “continues to ask the New Zealand government for a fair price on transmission which reflects the actual service we receive at Tiwai”.

Finance Minister Grant Robertson spoke to Southland business leaders about the future of the Tiwai aluminium smelter at a breakfast event in Invercargill in August 2020.

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“In order to achieve a longer staged exit, which the Government and the Southland community have told us they would prefer, Rio Tinto needs a fixed and fair price so we don’t continue to lose money over that longer timeframe.

“In the short term we really need to provide certainty for our people and our community, as soon as possible,” she said.

It is understood that Rio Tinto has argued in the past that its annual bill from Transpower should be reduced from $64 million a year to just $28m a year.

Energy Minister Megan Woods said on Thursday that there was “a range of discussions taking place, but they are all commercial in nature so I won’t be going into any detail about them”.

The Government had already ruled out “a direct subsidy” to Rio Tinto, she added.

Barclay confirmed that Meridian had put a separate offer to Rio Tinto that would see the power company lower its electricity charges in return for the smelter staying open until 2024.

But he said at this stage it was not aware if that offer would be acceptable to Rio Tinto.

Broker Forsyth Barr said this month that it had been able to confirm Rio Tinto planned to make a further decision on the future of the smelter in September.