Global Spike In Aluminium Prices Drives NZ Smelter’s Profit

Rio Tinto’s wholly-owned subsidiary, Pacific Aluminium (New Zealand) Limited (PANZ) has reported financial results relating to its interest in New Zealand Aluminium Smelters Limited (NZAS), showing an underlying net profit of $122.268 Million for the 2022 financial year ($2021: $140.057 M).

The result was driven by a spike to record-high aluminium prices in the first half of 2022 following Russia’s invasion of Ukraine, and global increases to energy costs. Prices dropped significantly in the second half of the year before stabilising.

In 2022, NZAS produced 333,689 tonnes of aluminium. It paid $357 million to New Zealand suppliers, including $77 million to suppliers in Southland. NZAS also paid a total of $96 million in salaries and benefits to employees.

NZAS Chief Executive Chris Blenkiron commented that it was a good result that helped move beyond the challenging environment for aluminium of recent years.

“We are in a cyclical business, and while 2022’s result is pleasing, aluminium prices have come down from their post-invasion highs, while we saw significant increases to our input costs through 2022 from inflationary and supply-chain pressures. As such, controlling costs is a critical focus in 2023.

“As always, our number one focus has been on keeping our people safe, and last year saw good results across all our health and safety metrics.”

Mr Blenkiron said there were several highlights for NZAS in 2022.

“We continued our extensive remediation programme at Tiwai, including permanent closure of the onsite landfill, and completion of the removal of all Ouvea premix from locations around the Southland community to back on site. We exported over 8000 tonnes of Ouvea in 2022.

“We also signed a significant partnership agreement with Ngāi Tahu, who are collaborating with our onsite team to ensure our ongoing remediation programme meets regulatory and cultural best practice.

“We’re proud of our contribution to the Southland and New Zealand economies, as well as our role in supporting global decarbonisation by producing some of the lowest-carbon, highest quality aluminium in the world.

“We continue to work closely with generators, Ngāi Tahu, and the community to secure a future for the smelter beyond 2024. We want to secure a commercial outcome that allows the smelter to be sustainable throughout the commodity cycle, drives investment in new renewable generation and plays its part in the broader energy market by providing more flexible demand response when needed,” said Mr Blenkiron.

Discussions with a range of potential energy providers are ongoing, Mr Blenkiron said.

ENDS

NZAS contact:
Simon King, External Affairs Director

Phone: 021 242 5723

Email: simon.king2@riotinto.com

NZAS is 79.36% owned by PANZ, which is part of the Pacific Aluminium business unit of Rio Tinto, and 20.64% by Japan’s Sumitomo Chemical Company Limited (SCC).

NZAS is a tolling company that converts alumina into aluminium on behalf of its owners. It is PANZ’s results that reflect the full costs of the raw material, production costs and revenue from the sale of aluminium for Pacific Aluminium’s interest.

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