Radio New Zealand reported yesterday that the future of the Tiwai Point aluminium smelter was looking secure despite trade wars, United States tariffs, arguments over power costs, and a for sale sign by Rio Tinto still hanging around.
Chief executive of New Zealand Aluminium Smelter (NZAS), Gretta Stephens, told Radio NZ the smelter's outlook had improved since it settled its power supply issues and global demand and prices have increased.
“Hydro-powered 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 Radio NZ Business.
Ms Stephens will be 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.
NZAS consumes about 13% of NZ'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 common knowledge in the metal refining business that it cannot perform without cheap power, and the Tiwai Point smelter through its original ownership had financially supported development of the Manipouri hydro power station.
Gretta Stephens told Radio NZ that NZAS was hoping a review of transmission pricing by the Electricity Authority will result in a at least a $20 M reduction in its power bill.
She 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 NZ 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.
Rio Tinto is controlling owner of Tiwai Point which is part of its Pacific Aluminium refineries that reportedly were put back on the market early this year following an improvement in the aluminium price.
*Sources: radionz.co.nz; NZResources.com