Swapping aluminum for copper will maintain China’s resources, group says
China depends on overseas imports for 60% of its aluminum resources as opposed to 70% of its copper resources.
Rio Tinto (ASX: RIO) is planning to keep its Tiwai Point aluminum smelter in New Zealand up and running until at least 2044.
Its New Zealand Aluminium Smelters (NZAS) unit has signed 20-year contracts with electricity generators Meridian Energy, Contact Energy and Mercury NZ to set pricing for a total of 572 megawatts (MW) of electricity.
The future of the smelter was unclear after Rio said in early 2021 it would be closed late this year. The company had questioned the viability of the business given high energy costs and the outlook for the aluminum industry.
The new electricity arrangements include 20-year demand response agreements under which NZAS may be requested to reduce electricity consumption by up to a total of 185MW.
“We are pleased the long-term future of the Tiwai Point smelter has been secured with these agreements, Rio Tinto Aluminium chief executive Jérôme Pécresse said in the statement.
“They give us confidence that our New Zealand workforce and assets can continue competitively producing the high purity, low-carbon aluminum needed for the global energy transition.”
The Tiwai Point aluminum smelter will continue competitively producing high-purity, low-carbon metal, backed by a diversified mix of renewable electricity from New Zealand’s South Island, Rio said.
In a separate transaction, Rio has entered into an agreement to acquire Sumitomo Chemical Company’s (SCC) 20.64% interest in NZAS for an undisclosed price. Upon completion, Rio would become sole owner of NZAS.
It has also agreed to acquire from SCC a 2.46% interest in Boyne Smelters Ltd (BSL), which owns and operates the Boyne Island aluminum smelter in Gladstone, Australia. This would bring Rio’s stake in BSL to 61.85%. The price was not disclosed.
