StockMarketWire.com - Mining company Rio Tinto has announced it will begin the wind-down of operations and the eventual closure of New Zealand Aluminium Smelters (NZAS) following a strategic review which concluded the business is no longer viable.

It said that NZAS had given Meridian Energy notice to terminate the power contract, which will end in August 2021, when the wind-down of operations is expected to complete.

Rio Tinto said the smelter made it an underlying loss of NZ$46m in 2019. The strategic review cited high energy costs and a 'challenging outlook' for the aluminium industry as the reasons why NZAS, which is a joint venture between Rio Tinto (79.36%) and Sumitomo Chemical Company Limited (20.64%), was no longer viable to operate.

Chief executive Alf Barrios said: 'It is not a decision we have made lightly and without significant careful consideration.

'It is very unfortunate we could not find a solution with our partners to secure a power price reduction aimed at making NZAS a financially viable business. We will therefore terminate the power contract and move to close the operation.'





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