NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies / Energy

Rio Tinto slashes Tiwai Pt smelter value to near zero

BusinessDesk
13 Jun, 2013 07:39 PM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Tiwai Smelter.

Tiwai Smelter.

The Australian majority owners of the Tiwai Point aluminium smelter, Rio Tinto, have written more than half a billion dollars off the value of the ageing plant, leaving it with a value on its books of just $14.8 million, from $606.9 million previously.

The decision was made in February but has been only disclosed today with the lodging of financial accounts with the New Zealand Companies Office for Rio Tinto Alcan NZ, the subsidiary that owns 79 per cent of the smelter, which has operated near Bluff since 1971.

The smelter's future is under a cloud as Rio seeks to sell a clutch of ageing Australasian aluminium production assets, packaged for sale as Pacific Aluminium, of which Tiwai Point is just one. The company has been seeking since last year to renegotiate its long term electricity contracts with state-owned Meridian Energy.

The 18-year contract, negotiated in 2007, took effect from Jan 1, but falling global aluminium prices since the global financial crisis and a glut of new Chinese production saw the smelter trigger review clauses which could see the plant wind down and close before the end of the decade.

In the latest accounts, for the year to December 31, the smelter made an operating, pre-tax loss of $91.5 million.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

But when the impact of the write-down and other factors is included, RTA NZ reported a loss for the year of $677.9 million.

The result reflected "sharply lower aluminium prices, the strong New Zealand dollar and high electricity prices," the company said in an accompanying statement.

The Tiwai Point write-down followed Rio Tinto's decision to reduce the carrying values of a number of its global aluminium assets in its 2012 results, due to the deteriorating conditions in global aluminium markets, it said.

Advertisement
Advertise with NZME.

It has not been previously apparent how significant the writedowns would be on the group's Pacific Aluminium portfolio. No buyers have emerged for the Australasian assets and Rio is believed to be considering an issue of Pacific Aluminium shares to its existing shareholders to quit the assets.

A 16 per cent decline in the price of aluminium in 2012 and the strong local current "contributed to the $163 million (18 per cent) reduction in consolidated revenues. Production was also reduced due to high spot electricity prices in the year."

Total operating revenues for the year were $756.8 million, compared with $919.3 million a year earlier.

Pacific Aluminium chief operating officer Brian Cooper said the result was disappointing, and was despite significant productivity and efficiency gains achieved at the smelter during the past year.

Discover more

Banking and finance

Optimism about aluminium fades as economies falter

22 Apr 05:30 PM
Manufacturing

Tiwai smelter loses big employment case

07 May 07:45 PM
Manufacturing

ERA decision could prove costly for Tiwai smelter

08 May 06:21 AM
Shares

Mighty River price hit by power policy

08 May 05:30 PM

"We have been working with smelter employees to improve the operations at Tiwai Point to enable the smelter to survive, safeguarding the 800 jobs at the facility and continuing the major economic contribution it makes to the region," he said.

Electricity contract negotiations with Meridian were continuing.

"Tiwai Point is an efficient and well maintained smelter. With the improvements being made at the operation and a globally competitive electricity price the smelter can operate on a sustainable footing for many years to come," Cooper said.

Resolving the electricity contracts is important for the government's plans for the partial privatisation of Meridian later this year, with the smelter its largest customer and accounting for around one-seventh of national electricity consumption.

While Meridian says it could sell the same energy at better margins and would displace more expensive electricity generating competitors, the massive generation overhang created by a wind-down at the smelter would be a major risk factor for investors to consider.

The value write-down is line with market opinion that site remediation costs of around $400 million would accrue to Rio if the smelter were to be closed.

Advertisement
Advertise with NZME.
Save

    Share this article

Latest from Energy

Energy

'Actively exploring options': Genesis eyes new fast-start plant

30 Jun 11:31 PM
Premium
Business|small business

'Change their footprint': Kiwi start-up's plan to shave $1200 a year off household power bills

30 Jun 05:00 PM
Business|economy

'Pick up the pace': NZ needs faster progress on energy projects

30 Jun 04:50 AM

There’s more to Hawai‘i than beaches and buffets – here’s how to see it differently

sponsored
Advertisement
Advertise with NZME.

Latest from Energy

'Actively exploring options': Genesis eyes new fast-start plant

'Actively exploring options': Genesis eyes new fast-start plant

30 Jun 11:31 PM

Genesis plans a new fast-start plant at Huntly of up to 100MW by winter 2027.

Premium
'Change their footprint': Kiwi start-up's plan to shave $1200 a year off household power bills

'Change their footprint': Kiwi start-up's plan to shave $1200 a year off household power bills

30 Jun 05:00 PM
'Pick up the pace': NZ needs faster progress on energy projects

'Pick up the pace': NZ needs faster progress on energy projects

30 Jun 04:50 AM
Entrust dividend: How to get your share of the payout

Entrust dividend: How to get your share of the payout

27 Jun 04:02 AM
From early mornings to easy living
sponsored

From early mornings to easy living

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP