Burden of smelter uncertainty acknowledged

The delay of the 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 yesterday.

Last year, smelter owner Rio Tinto announced it would carry out a strategic review of the Tiwai Point operation, which it has indicated 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 aluminium smelter’s fate has been postponed due to Covid-19.

"The strategic review does have an impact on the way people feel and their wellbeing ... We are certainly progressing as fast as we can in the terms of the outcome.

"We are conscious that is weighing heavily on our peoples’ minds as well impacting the community."

New Zealand Aluminium Smelters chief executive Stew Hamilton expects the outcome of a strategic...
New Zealand Aluminium Smelters chief executive Stew Hamilton expects the outcome of a strategic review of the Tiwai Point smelter operation this year. PHOTO: LUISA GIRAO
No decision had been made; 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 last week’s 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 $10million in transmission costs.

"It is a relatively small component compared to the bill that we pay that is $67million 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 also said the smelter had 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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