Rio Tinto: NZAS Reaches Deal With Meridian Energy To Extend Operations To 2024

(RTTNews) - Mining and metals company Rio Tinto Plc. (RTPPF.PK, RIO.L, RIO, RTNTF.PK) Thursday announced that it has reached a new agreement with Meridian Energy, under which its majority owned New Zealand's Aluminium Smelter or NZAS will continue to operate the Tiwai Point aluminium smelter until December 31, 2024.

The 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. The deal will enable the Tiwai Point smelter to continue producing some of the lowest carbon aluminium in the world.

In July 2020, Rio Tinto announced the conclusion of a strategic review of the smelter and a decision to wind down operations by August 2021 due to high energy and transmission costs.

According to the company, the latest extension of the deal provides certainty to employees, the local community and customers while providing more time for all stakeholders to plan for the future.

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.

The company said plans for eventual closure of the Tiwai Point smelter will include extensive stakeholder consultation, including within the Southland community.

Rio Tinto said the discussions with the New Zealand government are progressing in relation to their commitment to address the smelter's high transmission costs.

NZAS is a joint venture between Rio Tinto with 79.36% stake and Sumitomo Chemical Company Limited with 20.64%.