Rio Tinto will conduct a strategic review of its interest in New Zealand’s Aluminum Smelter (NZAS) at Tiwai Point to determine the operation’s ongoing viability and competitive position. Rio Tinto plans to hold discussions with the government of New Zealand and energy providers to explore options and identify economically viable solutions to find a pathway to profitability for the asset.
Under current market conditions and with high energy costs, the company said it expects the short to medium outlook for the aluminum industry to be challenging and NZAS to continue to be unprofitable.
“The aluminum industry is currently facing significant headwinds with historically low prices due to an oversupplied market,” Rio Tinto Aluminum Chief Executive Alf Barrios said. “This means that many aluminum providers are reviewing their positions.”
Barrios said the company will work with the government, suppliers, communities and employees to find a solution that will ensure a profitable future for this plant.
The strategic review will consider all options, including curtailment and closure and will be complete in the first quarter in 2020.
NZAS is a joint venture between Rio Tinto (79.36%) and Sumitomo Chemical Co. Ltd. (20.64%) and employs around 1,000 people.