Budget to close site doubled

NEW Zealand Aluminium Smelter (NZAS) has nearly doubled the budget for closing and cleaning up the Tiwai site.

The company has announced yesterday it has increased the remediation and closure provision in its 2021 financial results to $687 million — nearly double the $352 million included in last year’s results.

NZAS chief executive and general manager Chris Blenkiron said this provision represented identified costs relating to site remediation activities such as the removal of waste, including spent cathode lining (SCL), demolition of site infrastructure and relocating the landfill following an eventual closure of the smelter.

The costs had been updated based on detail provided in the recent preliminary closure study.

‘‘We have committed to remediating the site whether we remain operating beyond 2024 or not. This updated provision ensures our community can be confident we are putting the right plans in place.

‘‘In the meantime, work is already under way to remove waste as part of our commitment to continue to improve our environmental performance.’’

Rio Tinto’s wholly owned subsidiary, Pacific Aluminium (New Zealand) Ltd, the smelter’s majority owner, has reported financial results relating to its interest in NZAS, which show an underlying net profit of $140 million for last year.

‘‘This result underscores the unpredictability of the market environment. Two thousand and twentyone saw a strong improvement in the aluminium market after two years of challenging conditions.

‘‘While we are pleased with the result, as a widely traded commodity aluminium prices are prone to fluctuations, and we are expecting continued volatility due to the ongoing impacts of the Covid19 pandemic, supply chain disruptions and inflationary pressures on consumer demand,’’ Mr Blenkiron said.

In February, the company announced it wanted to keep operating past its previously signalled closure date in 2024, but there was no update on that. Many options being explored for the site.