(Sharecast News) - Rio Tinto announced on Wednesday that it would conduct a strategic review of its interest in New Zealand Aluminium Smelter (NZAS) at Tiwai Point, to determine the operation's ongoing viability and competitive position.
The FTSE 100 company said that under current market conditions, and with high energy costs, it expected the short-to-medium outlook for the aluminium industry to be "challenging", and the asset to continue to be unprofitable.
It said it intended to hold discussions with the government of New Zealand and energy providers, to explore options and identify economically-viable solutions to find a pathway to profitability for the asset.
"The aluminium industry is currently facing significant headwinds with historically low prices due to an oversupplied market," said Rio Tinto Aluminium chief executive officer Alf Barrios.
"This means that many aluminium providers are reviewing their positions.
"Rio Tinto will work with all stakeholders including the government, suppliers, communities and employees in order to find a solution that will ensure a profitable future for this plant."
The company said the strategic review will consider all options, including curtailment and closure, and would be complete in the first quarter in 2020.
New Zealand Aluminium Smelter is a joint venture between Rio Tinto at 79.36% and Sumitomo Chemical Company at 20.64%, and employs around 1,000 people.
Rio Tinto (RIO)30 Apr 2024 09:46
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