Soaring aluminium prices look likely to encourage Rio Tinto to press for extending its Tiwai Point sweetheart deal

As  the  price  of   aluminium breaks  new  records,  closing in   on  $US3000  a  tonne,  global  giant  Rio Tinto  must  be  having  a  quiet  chuckle  to  itself.

Only  a   year  ago it  was  threatening   to  close  the  Tiwai Point  aluminium  smelter,  consigning  it  to  the  scrap  heap  with  the  loss  of  700  jobs,  directly,  and  another 1600  indirectly.  For Southland’s  economy   it  would have  been  a  mortal   blow.

At  that  time, aluminium  was  fetching  only $1800  a  tonne.

Rio  Tinto   said   the  smelter  was  uneconomic  because the  price of  electricity  was  too  high.  In July   last  year it said  it would close    the  operation  because  of  high  costs and a challenging market.

The decision to close the smelter had disappointed politicians and local power firms as it came when the COVID-19 pandemic began to cripple the economy.

Some  economists  argued  NZ  should  let  it  go  and  divert  the  Manapouri  electricity, the  cheapest  in  the  country,   to  other  uses. Continue reading “Soaring aluminium prices look likely to encourage Rio Tinto to press for extending its Tiwai Point sweetheart deal”