NZAS Secures 20-Year Electricity Deals for Tiwai Point Smelter
New Zealand Aluminium Smelters (NZAS) has signed 20-year electricity agreements to secure the future of the Tiwai Point aluminium smelter. These agreements will enable NZAS to continue competitively producing high-purity, low-carbon metal, supported by a mix of renewable electricity from New Zealand’s South Island.
NZAS has signed contracts with electricity generators Meridian Energy, Contact Energy, and Mercury NZ to provide an aggregate of 572 megawatts (MW) of electricity, meeting the smelter’s full electricity needs. These agreements, which are pending regulatory approvals and other conditions, are set to begin in July 2024 and will run until at least 2044.
Rio Tinto Aluminium Chief Executive Jérôme Pécresse expressed satisfaction with the agreements, stating, "We are pleased the long-term future of the Tiwai Point smelter has been secured with these agreements, which were reached with a genuinely collaborative spirit between all parties. They give us confidence that our New Zealand workforce and assets can continue competitively producing the high purity, low-carbon aluminium needed for the global energy transition."
The new electricity arrangements include 20-year demand response agreements with Meridian Energy and Contact Energy, allowing NZAS to reduce electricity consumption by up to 185MW when needed, ensuring a secure electricity supply to New Zealand homes and businesses.
In a related transaction, Rio Tinto has agreed to acquire Sumitomo Chemical Company Limited’s (SCC) 20.64% interest in NZAS for an undisclosed price, resulting in NZAS being 100% owned by Rio Tinto upon completion. Additionally, Rio Tinto will acquire SCC’s 2.46% interest in Boyne Smelters Ltd (BSL) in Gladstone, Australia, increasing Rio Tinto’s stake in BSL to 61.85%. These transactions are part of SCC’s business portfolio transformation and are subject to regulatory approvals from New Zealand’s Overseas Investment Office and Australia’s Foreign Investment Review Board.
This milestone secures a promising future for the Tiwai Point smelter and supports New Zealand's commitment to producing low-carbon aluminium.
