Rio Tinto’s NZ smelter closure puts focus on loss-making Australian plants – Sydney Morning Herald

It comes amid continued uncertainty around the future of Rio Tinto’s three aluminium smelters in Australia which are also facing pressure from energy prices accounting for about a third of their costs. Rio Tinto chief executive Jean-Sebastien Jacques said in August its aluminium smelters were on “thin ice”.
Rio Tinto has been in discussions with federal and state governments about energy prices at its Bell Bay smelter in Tasmania, the Boyne smelter in Queensland and the Tomago smelter near Newcastle, which employ thousands of people.
Analysts have also cast doubt over the future of the local smelters after the miner vowed to neutralise its greenhouse gas emissions by becoming a “net-zero” emitter by 2050 and reduce its direct emissions by 15 per cent within the next decade. While hydropower supplies electricity for many of Rio’s smelters globally, its plants in Queensland and New South Wales are largely powered by coal-fired generators, the most polluting form of energy creation.
The Australian Aluminium Council, representing Rio Tinto and Alcoa, said Thursday was a “sad day for our colleagues in New Zealand”. Executive director Marghanita Johnson said energy prices in Australia remained some of the most expensive in the world and posed a threat to the ongoing viability of local smelters.
“Energy accounts for 30-40 per cent of our cost base,” she said. “Although short-term prices are coming down, that doesn’t translate to the long-term contracts for our smelters.”
Rio’s New Zealand Aluminium Smelters (NZAS) is a joint venture between Rio Tinto, which owns 79.36 per cent, and Sumitomo Chemical Company Limited, which owns 20.64 per cent. NZAS employs about 1000 people directly and created a further 1600 indirect jobs in Southland, Rio said. A strategic review determined it was no longer economically viable due to energy costs being “some of the highest in the industry globally, coupled with a challenging short to medium-term aluminum outlook”.
“During the next 14 months, NZAS and Rio Tinto will work closely with partners as detailed planning is undertaken to wind-down operations and eventually close the smelter,” Rio said in a statement.

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