Rio Tinto facing higher port charges

Bluff aluminium smelter operator Rio Tinto looks likely to face higher annual charges to South Port New Zealand, following an interim decision by the arbitrator in its dispute with NZ Aluminium Smelters (NZAS).

Rio-Tinto-controlled NZAS and the port renewed a licence agreement over the Tiwai Wharf and associated infrastructure for a further 35 years in 2008 but the two companies were unable to agree terms and brought in a commercial arbitrator.

The smelter is the largest customer for the country's southern-most port.

"The interim decision points to an increase in the annual charge payable to South Port but the final contract position is yet to be determined," said Mark O'Connor, the port's chief executive.

It is too soon to say what impact the arbitrator's decision will have on future profitability, he said.

The interim award proposes a charging structure over the 35-year life of the contract.

Shares of South Port were unchanged at $2.55c yesterday and have gained 25 per cent in the past 12 months.

- BusinessDesk

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