Sumitomo has 79.36 percent of the smelter at Sumitomo by balance.
“We are delighted to have reached an agreement with Meridian Energy that will enable the Tiwai Point smelter to continue to produce some of the world’s lowest carbon aluminum,” said Rio aluminum chief Alf Barrios.
It will also give Rio Tinto, the New Zealand government, Meridian, and the Southland community more time to plan for the future and importantly bring their dedicated team to Tiwai and our customers the proof that they deserve it. ”
Aluminum prices were below US70 ¢ per pound in April and May, but have recovered to reach US91 ¢ per pound on Thursday.
Aluminum prices were hovering around US80 ¢ per pound in July 2019 when Rio vice-president Jean-Sebastien Jacques announced that the company’s Australian smelters were “on thin ice”.
Aluminum prices have not traded steadily around the US90 ¢ level since mid-2018, when the price traded above $ US1 per pound for several weeks.
Better prices for the metal have come in a year when the biggest entry cost for Australian smelters, electricity, has gone down.
Wholesale electricity prices in the eastern states of Australia traded at a five-year low in July, following a destructive trend that has been ongoing since early 2019.
The combination of lower power prices, higher aluminum prices and the precedent set by Rio New Zealand to deal with Meridian should strengthen the chances of securing a bailout agreement for Rio smelters in Tasmania, New South Wales and Queensland, which has lost money over the last two years.
Alcoa, Alumina Limited, Citic and Marubeni have also been losing money on their Portland smelter in Victoria in recent years, and a rescue package from the Victorian government appears to be needed to avoid closure in the winter of 2021.
It is almost four years to the day since the Victorian government announced a $ 200 million aid package to keep the Portland smelter going until mid-2021, suggesting the Andrews government needs to move soon if it is to expand of that support.
Alcoa is updating investors on the future of Portland next week on January 21st.