The Tiwai Point aluminium smelter has posted an increased loss driven by large one-off costs.
Photo: RNZ / Nate McKinnon
The plant's owners, New Zealand Aluminium Smelters (NZAS), has reported an after-tax loss of $366 million for the past calendar year compared with a loss of $313m the previous year.
The loss was inflated by $266m of unspecified impairments and losses on financial hedges to protect against power price volatility. Leaving aside the one-off costs the underlying loss was $100m, just over double the year before.
NZAS chief executive Stew Hamilton said 2020 had been challenging given market conditions and rising costs.
"In 2021 we have seen an improved aluminium market and in conjunction with the new electricity agreement for the smelter announced in January 2021, this enables a sustainable extension of operations at Tiwai Point."
The smelter renegotiated a cheap power deal with Meridian at the start of the year, ensuring it would stay open until the end of 2024.
However, it agreed to reduce production for a month in April to ease pressure on low hydro lakes.
Aluminium prices have risen strongly in recent months on increased demand from China.
Hamilton, who is leaving the company to join Mercury Energy, said the company was now looking ahead at manufacturing, and future issues associated with the possible closure after 2024.
"We are also working closely with the community, Ngāi Tahu and the New Zealand government on dealing with waste and remediation of the site at Tiwai Point as well as the best outcomes for a transition beyond 2024."
NZAS has agreed to pay $4m to get rid of all aluminium dross and ouvea premix from Mataura and other sites around Southland, when previously those costs were being shared with the Crown and councils.
The company has also been talking to the government about a $200m-plus clean-up of more toxic spent cell liner waste, which it has said it will remove.