D-day for aluminium smelter bosses

  • Breaking
  • 30/06/2015

It's D-day for Tiwai aluminium smelter bosses.

They must give notice today to Meridian Energy if they intend to terminate their electricity contract - a decision which determines the smelter's imminent future.

If notice is given, either another deal must be made or the smelter could close in 18 months' time.

There could be the chance to renegotiate its electricity supply with different companies through different contracts, but it's hard to predict which way the power decision will go.

Energy industry analyst Andrew Harvey-Green says there are a number of potential scenarios.

"It doesn't necessarily mean that the smelter will be looking to close. It could just be that the smelter is wanting to trade and renegotiate its contract and it will probably have 12-18 months to do that."

Invercargill Mayor Tim Shadbolt is confident that the company will remain running.

"They're not giving anything away as always… but they are looking very confident. I've been in talks with all the major players and I think it's the transmission costs that could save the smelter $50 million. That is a critical factor in the present day.

"The long term future of aluminium is looking really good… it's going to be involved in a lot of uses, [including] medical equipment, dental equipment. It's a great product."

According to Mr Shadbolt apprehension levels in Invercargill about its closure this time around aren't high.

"The situation is just so different to last time around I think there is quiet confidence."

The Tiwai aluminium smelter is the country's single largest electricity consumer.

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