The Tiwai Point aluminium smelter will stay open until at least 2018, with a new agreement reached between owner New Zealand Aluminium Smelters (NZAS) and electricity suppliers Meridian and Contact.
The revised contract will see 572MW of energy supplied to the smelter until 2030, with NZAS able to reduce the load or terminate the deal altogether from 2018, depending on market conditions.
“We have crossed a hurdle today and now have more certainty about our immediate future,” says NZAS chief executive Gretta Stephens.
“The agreement provides short-term security for the smelter and allows time for market fundamentals to improve.” . . .
Aluminium is a commodity and like many others, including dairy produce, it is in the midst of a downturn.
The announcement the smelter will stay open will be a relief to the hundreds of people working there, the businesses which service and supply it and the wider Southland economy.
It is probably good news for Meridian and Contact shareholders too. Even though the smelter gets power at a discounted price, losing such a big customer would have hurt the companies, though it might have meant lower power prices for the rest of us.