Tiwai Point Aluminium Smelter

Tiwai Point Aluminium Smelter as seen from the top of Bluff Hill

The Tiwai Point Aluminium Smelter is owned by Rio Tinto Group (79.36%) and the Sumitomo Group (20.64%), via a shell company known as "New Zealand's Aluminium Smelter".^[1]

New Zealand Aluminium Smelters owns and operates New Zealand’s only aluminium smelter at Tiwai Point, near Bluff. A business of Rio Tinto, NZAS produces the world’s best quality aluminium and has supported the Southland economy for more than 40 years. NZAS is a tolling plant, producing primary aluminium in the form of ingot, billet, and rolling block. The plant's alumina is supplied from refineries in Queensland and the Northern Territory of Australia. Around 90 per cent of the aluminium produced at NZAS is exported.

The Tiwai Point smelter was opened in 1971. It produces the world's highest purity primary (i.e. directly refined made from alumina ore) aluminium. The ore is mostly imported from Australia, while the finished product mostly goes to Japan.^[2]

Facility

The smelter currently consists of three lines of P69 technology cells, with 208 cells each (i.e. 624 total), and one line of 48 CD200 technology cells. In 2011 the smelter produced a record amount of aluminium, 354,030 saleable tonnes. The previous record production was 352,976 tonnes in 2007.^[3] In 2009, approximately 750 full-time personnel were employed, and 120 contractors.^[2] Metal production was 271,902 tonnes.^[2] The third P69 Line was built in the early 1980s as part of Muldoon government's "Think Big" projects.

Financial results

Taken from the Statistical Review of Comalco's New Zealand Activities, page 22 of the 1993 Annual Report.

Year   Tonnes   Aluminium Price  Nett Profit    Employees
1979  153,537    1575             -1,172,000     1,252  
1980  154,740    1770             17,470,000     1,258  
1981  153,979    1302              2,941,000     1,359  
1982  163,419    1026            -20,698,000     1,452  
1983  218,609    1478             -9,665,000     1,651  
1984  242,850    1281              1,766,000     1,631  
1985  240,835    1072            -24,772,000     1,529  
1986  236,332    1160            -18,188,000     1,506  
1987  248,365    1496             92,570,000     1,429  
1988  257,006    2367            173,040,000     1,770  
1989  258,359    1915            118,500,000     1,820  
1990  259,408    1635             42,051,000     1,720  
1991  258,790    1333            -34,122,000     1,465  
1992  241,775    1279            -18,649,000     1,415  
1993  267,200    1161            -18,016,000     1,465  

The smelter production is in tonnes of saleable metal, the aluminium price is the average London Metal Exchange 3 month in US$/tonne, the Nett Profit/Loss is after tax and NZ$. The employee count includes contract employees and the full-time equivalent of part-time employees. Comalco-CHH Aluminium employees are not included from 1990; 425 were employed in 1993.

Note that for aluminium to be sold, bauxite must be imported.

Electricity

The smelter's maximum power demand from the national grid is up to 635 MW (e.g. Monday the ninth of January 2012). Most of the energy for the smelter is supplied from the Manapouri hydroelectric power station, via two double circuit 220 kV transmission lines. The perceived reliability of energy supply from Manapouri played a major role in the choice of building the aluminium smelter in Southland,^[2] with both the power plant and the smelter having been constructed as co-ordinated projects. The facility is the largest electricity consumer in New Zealand, and uses approximately one third of the total electricity consumed in the South Island and 15% of the total electricity nationwide.

Electricity usage since 1970

Electricity usage since 2000

New Zealand Aluminium Smelters has a contract for electricity supply with Meridian Energy for the continuous supply of 572 megawatts for the period 2013 to 2030.^[1]

Emissions

In 2007, Tom Campbell, the chief executive of majority owner Rio Tinto Aluminium NZ, said that the smelter was amongst the top 5% of the world's 250 aluminium smelters in terms of low emissions.^[1] In 2007, 1.97 tonnes of carbon dioxide were released for every tonne of aluminium produced.^[4] The basic reaction is Al₂O₃ → 2Al + 3O as in the Hall-Héroult process; if all the oxygen at the red-hot carbon anode becomes carbon monoxide (that subsequently becomes carbon dioxide) then for one tonne of aluminium, 1.55 tonnes of CO would result, becoming 2.4 tonnes of CO₂. However, if all the oxygen went directly to CO₂, then 1.56 tonnes of CO₂ would result. At the stated rate of 1.97 tonnes of carbon dioxide per tonne of aluminium, the production of 272,000 tonnes of aluminium in a year would emit 535,000 tonnes of carbon dioxide.

Closure threats

Rio Tinto has threatened to close the Tiwai Point smelter if it can't get a cheaper deal for electricity from retailer Meridian, or the Government fails to give it a substantial subsidy to cover recent losses due to the strengthening Kiwi dollar and a fall in aluminium prices.^[5] Between 2008 and 2013, aluminium prices fell by more than 30 percent.^[6]

Much media commentary^[7] in April 2013 focused on the impact of closure on both domestic power prices and share prices when the State Owned Enterprise and electricity generator Mighty River Power would be partially sold off to private investors.

Invercargill mayor Tim Shadbolt said it was a myth that closing the smelter, which uses around 15 percent of the country's electricity, would result in lower prices, and has vowed to keep it open.^[8]

References

External links

• New Zealand Aluminium Smelters Limited