Threats to aluminium smelters

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I would expect some bad news could be coming from the aluminium smelter at Bluff in New Zealand

Australia: Rising power costs threaten aluminium industry

The Australian Aluminium Council has warned that the Kurri smelter in the NSW Hunter Valley will not be the only one at risk if the industry is forced to absorb more electricity costs.

Steel Guru,

9 October, 2012

It has told a Senate Inquiry into electricity costs that aluminium smelting already carries a disproportionate share of transmission costs, compared to other users. Hydro's Kurri smelter was recently forced to close because of the high Australian dollar and low world metal prices.

Mr Miles Prosser Aluminium Council Executive Director said that Kurri will not be the only casualty if transmission costs rise. "We're not saying that the current costs for transmission need to change but we're just saying to the regulators and to the Government, look if you're going to play around with this policy just be conscious that you can't load more costs on to users like aluminium. There just isn't the capacity there to continue to take on more costs."

Mr Prosser said that to make matters worse the industry is forced to carry a disproportionate share of transmission costs. The smelter takes a very consistent load of electricity and so it's actually quite a simple task to build a transmission line between the generator and the smelter. The transmission task when it comes to distributing electricity to households and other users is a bigger task and so what we're actually seeing is aluminium smelters probably taking more than their normal amount of the transmission cost if you like.

NZ: Fresh fears for future of Bluff aluminium smelter

There are fresh fears for the future of the Tiwai Point aluminium smelter in Bluff

3News,

3 September, 2012.

Originally the plant planned to lose 100 positions over the next five years, however those jobs will be gone by November due to falling aluminium prices.

The smelter accounts for 9 percent of Southland’s GDP, with many people depending on it for business. Invercargill Mayor Tim Shadbolt says locals are concerned.

“There are a lot of worried people out there,” he says.

Smelter general manager Ryan Cavanagh says falling world aluminium prices mean it has no choice but to cut staff.

The smelter is 79 percent owned by mining giant Rio Tinto, and is one of thirteen plants it is trying to sell.

Last month the smelter announced it wanted to renegotiate the power supply contract it has with state-owned Meridian Energy.

The contract was supposed to run until 2030 - giving the smelter cheap power and the workers secure jobs - and what the Government hoped would be a safe investment when it tried to partially privatise Meridian.

But Prime Minister John Key says he is confident the matter will be resolved.

“Look, I’m confident that things will be resolved,” he says.

The people of Southland will be hoping he is right.