Rio Tinto (ASX:RIO) is to review its interest in New Zealand’s Aluminium Smelter (NZAS) at Tiwai Point, to determine the operation’s ongoing viability and competitive position.
They believe that with the short term to medium outlook for the aluminium industry looking challenging, that this asset could continue to be unprofitable.
High energy costs are also a factor. Rio Tinto intends to hold discussions with the Government of New Zealand and energy providers to explore options and identify economically viable solutions to find a pathway to profitability for the asset.
NZAS is a joint venture between Rio Tinto (79.36 per cent) and Sumitomo Chemical Company (20.64 per cent) and employs around 1000 people.
Shares in Rio Tinto (ASX:RIO) closed 1.49 per cent higher at $89.43 yesterday.