As Q1 2013 profits plunge 71%, Rio Tinto has decided not to sell Pacific Aluminium and plans instead to re-integrate the company into the Rio Tinto Alcan Group.
As Q1 2013 profits plunge 71%, Rio Tinto has decided not to sell Pacific Aluminium and plans instead to re-integrate the company into the Rio Tinto Alcan Group.
The news has been met with mixed feelings from those who would have been directly affected by a sale. In Tasmania, for example, the Bell Bay smelter's future is still uncertain, according to Tasmanian premier Lara Giddings. She says that the Tasmanian government has been helping the smelter secure jobs.
In New Zealand, the Tiwai Point smelter has received government assistance in the shape of a $30 million payout to secure agreement on a revised electricity contract with Meridian Energy. The deal means a reduction in the current electricity charge backdated from 1 July 2013 and allows for price increases should the New Zealand dollar value of aluminium rise above agreed levels.
The future of the Tiwai smelter depends upon two factors: one, if global demand for aluminium increases and two, if aluminium prices improve. If demand and price pick up then there's a good chance that Rio Tinto will extend the life of the Tiwai plant, according to industry insiders.
The $30 million government pay-out has eliminated the risk of immediate closure and, therefore, given workers at the plant a reprieve from joblessness.
Competition, however, is expected to be tough for Tiwai, bearing in mind the availability of high-quality but cheap metal from China.
On the political front, Clayton Cosgrave, the New Zealand Labour Party's state-owned enterprise spokesman, is concerned that the government handed over the 30 million without so much as a jobs guarantee for Tiwai workers.
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