The owner of the Tiwai Point aluminium smelter, Rio Tinto, is actively engaged in detailed negotiations to secure a new power agreement essential for the smelter's continuation. The future of the facility, which plays a significant role in Southland's economy, has been uncertain, prompting concerns among local businesses about the potential impact of its closure at the end of the year.
Rio Tinto described the discussions as "complex," involving various parties, with the goal of establishing a sustainable electricity supply that ensures the smelter's long-term viability. This involves addressing the challenges posed by fluctuating commodity prices and contributing positively to the energy sector by supporting power supply during peak demand periods.
Amidst speculation in the market that an agreement needs to be finalized imminently, Rio Tinto emphasized its awareness of the need for clarity among its employees, the Southland community, and the energy markets. The company assured that efforts are being made to expedite the negotiation process, with an announcement expected as soon as a resolution is reached.
The ongoing negotiations, which have spanned over two years, include discussions with power companies regarding conditions for the deal. Meridian Energy, a key stakeholder, has indicated that any agreement should involve reducing the smelter's power consumption during periods of low hydro lake levels to benefit the broader electricity sector. Additionally, the formulation of a comprehensive environmental cleanup plan for the smelter site remains a critical consideration in the discussions.
Previous disputes between Rio Tinto and the government regarding the site's environmental condition have since shifted towards collaborative efforts to assess and address potential environmental impacts.
