23rd Oct 2019 06:58
(Alliance News) - Rio Tinto PLC said on Wednesday it will conduct a strategic review of its interest in New Zealand's Aluminium Smelter at Tiwai Point.
Under current market conditions and with high energy costs, Anglo-Australian Rio Tinto expects the short to medium outlook for the aluminium industry to be "challenging" and this asset to "continue to be unprofitable".
The miner intends to hold discussions with the government and energy providers to explore options and identify "economically viable solutions".
Rio Tinto Aluminium Chief Executive Alf Barrios said: "The aluminium industry is currently facing significant headwinds with historically low prices due to an over-supplied market. 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 strategic review will consider all options, including curtailment and closure, and will be complete in the first quarter in 2020.
The smelter is a joint venture between Rio Tinto, owning around 79%, and Sumitomo Chemical Company Ltd, holding 21%. It employs around 1,000 people.
Rio's Australian shares closed up 0.4% at AUD89.80 on Wednesday.
By Lucy Heming; [email protected]
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