New Zealand’s largest single electricity user, the Rio Tinto aluminium smelter at Bluff, is for sale along with 12 other aluminium producing assets in the giant Australian minerals company’s portfolio.
Long praised for the quality of the aluminium it produces, and propped up for a generation by discounted electricity prices that reflect the fact it uses one-seventh of all the power generated in New Zealand, the smelter at Tiwai Point is also among the older smelters in the Rio Tinto stable.
Also on the block are the Boyne, Bell Bay and Tomago smelters in Australia, along with the Gladstone power station, which provides electricity to the Boyne complex in Queensland.
It will also sell the Gove bauxite mine and alumina refinery.
The Australasian assets will be packaged as a new business unit, called Pacific Aluminium, for divestment when market conditions are right, the company said in a statement.
There was no immediate word on whether the 20.6 percent of the smelter owned by the Japanese conglomerate Sumitomo Chemical is also for sale, or whether Mitsui may be an interested party.
“The assets identified … are no longer aligned with our strategy and we believe they have a bright future under new ownership,” said chief executive Tom Albanese, despite being well-managed, sound businesses with productive workforces.
“The strength of our balance sheet means that we can choose the most opportune method and timing to divest these assets, which may not occur until the economic climate improves.”
Rio Tinto would continue to invest in its “core assets” to improve performance in its aluminium products group.
The Bluff smelter, operated as New Zealand Aluminium Smelters and previously owned by Comalco in a joint venture with Mitsui, was built partly to create a market for the huge hydro-electric output of the Manapouri scheme, now owned and operated by state-owned Meridian Energy.
The smelter employs 2,400 people and contributes A$506 million to the Southland economy a year, according to Rio’s website.
Shares of Rio Tinto rose 2.2 percent to A$69.82 in trading on the ASX this morning.