(Alliance News) - Miner Rio Tinto PLC on Thursday said it struck a deal to allow an aluminium smelter in New Zealand to continue operating for roughly another four years.
Rio said it reached an agreement with Meridian Energy, an electricity generator, to allow the New Zealand's Aluminium Smelter joint venture to continue operating the Tiwai Point aluminium smelter until December 31, 2024.
The NZAS joint venture, of which Rio Tinto owns just over 79%, operates the Tiwai Point site in Southland region of New Zealand. Japan's Sumitomo Chemical Co Ltd holds the remaining stake in NZAS.
"While discussions with the New Zealand government are progressing in relation to their commitment to address the smelter's high transmission costs, a new agreement has been reached with Meridian Energy in relation to power prices, making the smelter economically viable and competitive over the next four years," Rio added.
"The extension provides certainty to employees, the local community and customers while providing more time for all stakeholders to plan for the future."
Back in July, Rio said it would wind-down and then eventually close its New Zealand aluminium smelters amid a "challenging" time for the industry.
On Thursday's power deal extension, Rio added: "The extension also provides time for detailed closure studies to be completed and for NZAS to support the government and Southland community in planning for the future. Plans for eventual closure of the Tiwai Point smelter will include extensive stakeholder consultation, including within the Southland community and reflect the company's robust closure and remediation standards."
Rio Tinto shares were 0.9% higher at 6,047.00 pence each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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