Tiwai smelter future looks brighter, despite issues
BLUFF: The future of the Tiwai Point aluminium smelter near Bluff is looking secure, despite trade wars, United States tariffs, arguments over power costs, and a ‘‘for sale’’ sign still hanging around.
New Zealand Aluminium Smelter (NZAS) outgoing chief executive Gretta Stephens said the smelter’s outlook had improved since it settled its power supply issues and global demand and prices have increased.
‘‘Hydropowered aluminium such as ours, with a low carbon footprint, is the right way to make aluminium into the future, and when there’s a levelised price on carbon, I think you’ll see smelters such as this really hit their straps,’’ she told RNZ business.
Ms Stephens is leaving the smelter in June to run the Glenbrook steel mill, south of Auckland.
She said the smelter had been through testing times in her four years but had survived because of the tenacity of the staff and Southland region.
Ms Stephens rejected the view that the company had been given corporate welfare in the form of cheap power prices and a $30 million grant from the then National government in 2013 after the company had talked about closing down.
The company consumes about 13% of the country’s power supplies, but has long complained that it pays too much for power transmission, and warned that the plant’s viability was at stake because of a high currency and depressed world prices.
It is hoping a review of transmission pricing by the Electricity Authority will result in a reduction of at least $20 million in its power bill.
Ms Stephens said the smelter should not be affected by the US Government’s 10% tariff on aluminium imports because it sells only a small amount there, but it might be affected if product was diverted into markets where New Zealand product was sold.
The Tiwai Point smelter produces high grade metal used in making cars and planes, which gives it some insulation against the swings in markets and demand.
The plant’s owner, Rio Tinto, has been looking to sell Tiwai Point and other smelters for the best part of a decade but never found a buyer. Ms Stephens declined to comment on whether the sale process was still under way.
She said assuming the smelter was maintained and its technology kept up to date, it could keep operating for decades.
A NZAS announced yesterday Stewart Hamilton would be replacing Ms Stephens as chief executive, starting in July.
Mr Hamilton started with in NZAS in 1996 as a research engineer and had a variety of operational roles, ultimately leading Pacific Aluminium’s business improvement and technology area for Australia and New Zealand. He has been at a Tanzanian gold mine for the past three years, latterly its general manager. — RNZ