A deal has been agreed to extend the operations of the Tiwai Point aluminium smelter until 2024, at which time it will be closed.
Meridian Energy (MEL) said Rio Tinto had accepted new contract terms until the end of 2024.
“As a company we have planned for the eventual exit of the Tiwai Smelter. We’re excited about the opportunities that we have to accelerate decarbonisation, and we’re actively developing new growth opportunities,” a spokesperson for Meridian said.
As part of these arrangements, Contact Energy (CEN) has agreed to supply Meridian with a portion of the electricity required to power the smelter. Contact will provide an average of 100 megawatts of baseload electricity through until the end of 2024 (assuming the smelter requires 572 megawatts of electricity).
The Government and Rio Tinto remain in discussion around transmission pricing and remediation of the smelter site.
Meridian’s announcement that it is actively developing new growth opportunities for when Tiwai closes, including process heat, IT infrastructure and green hydrogen, highlights the opportunities for tech jobs that the Southland region has as the transition is made.
Today's announcements extends the transition from the one year Rio Tinto was proposing, to four years.
Rio is closing the smelter, despite the "Tiwai Point smelter ... producing some of the lowest carbon aluminium in the world."
Previous agreements to keep the facility open have also talked up the transition away from smelting operations, but this time it looks more realistic.
Aluminium prices have been rising recently, but not at to the same degree as for copper and other metals.
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32 Comments
Not quite
The introduction of Meridian and Contact into the MSCI index doesn't happen until the revision on 1 April 2021, if at all. Standard and Poors don't usually reveal revisions until days before the operation of the new indexes. Inclined to think somebody jumped the gun and got squeezed in the following days. Check out the moves in capitalisation of Meridian on the NZX. Ridiculous. Got up to $23 billion on assets of $8½ billion
Magically, both Rio Tinto & Meridian reached a 'price' that can sustain further the business until 2024, why just until 2024? why not now? - who's really add the buffer cost here.. indeed as per govt promise before the election. Really patchy proposals from business point of view.. keep it afloat until xyz period, then what? the invite CCP investment? they able produce the Al cheaply, why maintaining the costly no longer viable business, expect a sudden jolt of revival of Airbus 380 production again? - Why doing business with NZ, cost too much.
You can. Unfortunately Hydrogen isn't very lucrative at the moment as an export, NZ doesn't have the demand for it in the foreseeable future, and a plant to produce it would probably need an offshore backer (like Methanex with Methanol).
NZ could produce Hydrogen and then turn that into green Methanol but even that's probably not very lucrative (although better than H2) and you'd still need a backer with deep pockets
Interestingly there is already all the plant and equipment required to produce H2 and turn it into HCL (Hydrochloric acid) mothballed in the Eastern Bay of Plenty. HCL is in big demand in the steel industry. A Japanese company currently owns it and would probably pay someone to remove it
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