The Tiwai Point Aluminium Smelter is an
aluminium smelter
Aluminium smelting is the process of extracting aluminium from its oxide, alumina, generally by the Hall-Héroult process. Alumina is extracted from the ore bauxite by means of the Bayer process at an List of alumina refineries, alumina refinery. ...
owned by
Rio Tinto Group
Rio Tinto Group is a British-Australian multinational company that is the world's second largest metals and mining corporation (behind BHP). It was founded in 1873 when a group of investors purchased a mine complex on the Río Tinto, in Hu ...
,
via a joint venture called New Zealand Aluminium Smelters (NZAS) Limited.
The facility, New Zealand's only aluminium smelter, is at
Tiwai Point
Tiwai Point lies at the entrance to Bluff Harbour on the southern coast of the South Island of New Zealand. A spit which extends from the western end of the Awarua Plain, it lies between Awarua Bay to the north and Foveaux Strait to the south. ...
, near
Bluff
Bluff or The Bluff may refer to:
Places Australia
* Bluff, Queensland, Australia, a town
* The Bluff, Queensland (Ipswich), a rural locality in the city of Ipswich
* The Bluff, Queensland (Toowoomba Region), a rural locality
* Bluff River (New ...
. It imports
alumina
Aluminium oxide (or aluminium(III) oxide) is a chemical compound of aluminium and oxygen with the chemical formula . It is the most commonly occurring of several aluminium oxides, and specifically identified as aluminium oxide. It is commonly ...
and processes it into primary aluminium. The plant's alumina is supplied from refineries in
Queensland
Queensland ( , commonly abbreviated as Qld) is a States and territories of Australia, state in northeastern Australia, and is the second-largest and third-most populous state in Australia. It is bordered by the Northern Territory, South Austr ...
and the
Northern Territory of Australia
The Northern Territory (abbreviated as NT; known formally as the Northern Territory of Australia and informally as the Territory) is an states and territories of Australia, Australian internal territory in the central and central-northern regi ...
. Around 90 per cent of the aluminium produced at NZAS is exported, mainly to Japan.
The smelter was opened in 1971
following the construction of the
Manapouri Power Station
Manapouri is a small town in Southland, New Zealand, Southland / Fiordland, in the southwest corner of the South Island, in New Zealand. The township is the Extreme points of New Zealand#Westernmost settlements, westernmost municipality in Ne ...
by the New Zealand government to supply it with electricity. It uses 13 percent of New Zealand's electricity,
and is reported to account for 10 percent of the
Southland region's economy.
Rio Tinto has threatened to close the smelter several times, for example in 2013 and 2020, but to date closure has been deferred after renegotiation of the price it pays for electricity.
As of January 2021, Rio Tinto announced that it had reached an agreement with its power supplier
Meridian Energy
Meridian Energy Limited is a New Zealand electricity generator and retailer. The company generates the largest proportion of New Zealand's electricity, generating 35 percent of the country's electricity in the year ending December 2014, and i ...
to pay a lower price in return for keeping the smelter running until December 2024.
In July 2022,
NZAS signalled that it would once again offer to remain open if it could secure new power agreements on favourable terms.
In May 2024, new twenty year electricity contracts were agreed with three suppliers, allowing the smelter to remain open until 2044.
There are concerns regarding the environmental legacy of waste stockpiled at the site, near to an eroding beachline.
History
In 1955, a geologist working for
Consolidated Zinc Proprietary Ltd (ConZinc) identified a commercial deposit of
bauxite
Bauxite () is a sedimentary rock with a relatively high aluminium content. It is the world's main source of aluminium and gallium. Bauxite consists mostly of the aluminium minerals gibbsite (), boehmite (γ-AlO(OH)), and diaspore (α-AlO(OH) ...
in
Australia
Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
on the west coast of
Cape York Peninsula
The Cape York Peninsula is a peninsula located in Far North Queensland, Australia. It is the largest wilderness in northern Australia.Mittermeier, R.E. et al. (2002). Wilderness: Earth's last wild places. Mexico City: Agrupación Sierra Madre, ...
. The company investigated sources of large quantities of cheap electricity needed to
reduce
Reduction, reduced, or reduce may refer to:
Science and technology Chemistry
* Reduction (chemistry), part of a reduction-oxidation (redox) reaction in which atoms have their oxidation state changed.
** Organic redox reaction, a redox reacti ...
the alumina recovered from the bauxite into aluminium. In 1960, ConZinc reached an agreement with the government for it to build a smelter and power station using the hydroelectric capacity of
Lake Manapouri
Lake Manapouri () is located in the South Island of New Zealand. The lake is situated within the Fiordland National Park and the wider region of Te Wahipounamu South West New Zealand World Heritage Area.
Māori History
According to Māori peop ...
and
Lake Te Anau
Lake Te Anau () is in the southwestern corner of the South Island of New Zealand. The lake covers an area of , making it the second-largest lake by surface area in New Zealand (after Lake Taupō) and the largest in the South Island. It is the ...
. In 1963, ConZinc decided not to build the power station, and following that decision the government decided to construct it, with power first being generated in 1969. Construction of the Manapouri Power Station attracted controversy for its environmental effects, with over 264,000 New Zealanders signing the
Save Manapouri petition. With a supply of electricity to be available, ConZinc built the Tiwai Point smelter, opening in 1971.
Before construction of the smelter archaeological excavations were carried out in 1968 led by
Stuart Park; evidence of an extensive Māori adze manufacturing site and middens was uncovered. Eleven tonnes of artefacts and material were retrieved from the site including adzes, hammer-stones and sinkers made from local
argillite
Argillite () is a fine-grained sedimentary rock composed predominantly of Friability, indurated clay particles. Argillaceous rocks are basically lithified muds and Pelagic sediment, oozes. They contain variable amounts of silt-sized particles. T ...
.
The original ownership was 50%
Comalco
Rio Tinto Aluminium (previously known as Comalco) is now known as Rio Tinto Alcan after Rio's takeover of Alcan. It was the world's eighth largest aluminium company. It mines and manufactures bauxite, alumina and primary aluminium.
Rio Tinto A ...
, 25% Sumitomo Chemical Company and 25%
Showa Denko
{{Infobox company
, name = Resonac K.K.
, native_name = レゾナック株式会社
, native_name_lang = ja
, romanized_name = Rezonakku kabushiki gaisha
, logo = Resonac logo.svg
, type = Public
, traded_as = {{tyo, 4004
, hq_location_city ...
KK.
Until 2024, NZAS was owned by
Rio Tinto Group
Rio Tinto Group is a British-Australian multinational company that is the world's second largest metals and mining corporation (behind BHP). It was founded in 1873 when a group of investors purchased a mine complex on the Río Tinto, in Hu ...
(79.36%) and the
Sumitomo Group
The is a Japanese corporate group and ''keiretsu'' that traces its roots to the ''zaibatsu'' groups that were dissolved after World War II. Unlike the ''zaibatsu'' of the pre-war period, there is no controlling company with regulatory power. In ...
(20.64%),
Tiwai Point is the only aluminium smelter in New Zealand. In December 1980, the government announced a project that would build a second smelter at
Aramoana
Aramoana is a small coastal settlement north of Dunedin on the South Island of New Zealand. The settlement's permanent population in the 2001 Census was 261. Supplementing this are seasonal visitors from the city who occupy Bach (New Zealand), ...
, but opposition from the public, changes in the aluminium market, and the loss of a commercial partner meant the project did not go ahead.
Operations
The smelter uses the
Hall–Héroult process
The Hall–Héroult process is the major industrial process for smelting aluminium. It involves dissolving aluminium oxide (alumina) (obtained most often from bauxite, aluminium's chief ore, through the Bayer process) in molten cryolite and e ...
to convert alumina (aluminium oxide) to elemental aluminium. Bauxite is mined in Australia and refined into alumina before being shipped to New Zealand. The smelter consists of three lines of P69 technology cells, with 208 cells each (i.e. 624 total), and one line of 48 CD200 technology cells. The third P69 Line was built in the early 1980s as part of the
Muldoon government
The Third National Government of New Zealand (also known as the Muldoon Government) was the government of New Zealand from 1975 to 1984. It was an economically conservative government that aimed to preserve the Keynesian economic system establ ...
's "
Think Big
Think Big was an interventionist state economic strategy of the Third National Government of New Zealand, promoted by the Prime Minister Robert Muldoon (1975–1984) and his National government in the early 1980s. The Think Big schemes saw t ...
" projects.
The smelter produces the world's purest aluminium
– 99.98 percent pure
– and is one of two smelters in the world producing ultrahigh purity aluminium. In 2011 the smelter produced 354,030 saleable tonnes of aluminium, which was its highest ever output at the time. In 2015, it produced 335,290 tonnes.
Financial results
Taken from the Statistical Review of Comalco's New Zealand Activities, page 22 of the 1993 Annual Report.
Year Tonnes Aluminium Price Net Profit Employees
1979 153,537 1575 -1,172,000 1,252
1980 154,740 1770 17,470,000 1,258
1981 153,979 1302 2,941,000 1,359
1982 163,419 1026 -20,698,000 1,452
1983 218,609 1478 -9,665,000 1,651
1984 242,850 1281 1,766,000 1,631
1985 240,835 1072 -24,772,000 1,529
1986 236,332 1160 -18,188,000 1,506
1987 248,365 1496 92,570,000 1,429
1988 257,006 2367 173,040,000 1,770
1989 258,359 1915 118,500,000 1,820
1990 259,408 1635 42,051,000 1,720
1991 258,790 1333 -34,122,000 1,465
1992 241,775 1279 -18,649,000 1,415
1993 267,200 1161 -18,016,000 1,465
The smelter production is in tonnes of saleable metal, the aluminium price is the average London Metal Exchange 3 month in US$/tonne, the Nett Profit/Loss is after tax and NZ$. The employee count includes contract employees and the full-time equivalent of part-time employees. Comalco-CHH Aluminium employees are not included from 1990; 425 were employed in 1993.
Electricity use

The smelter's power demand from the
national grid is about 570
MW. Most of the energy for the smelter is supplied from the Manapouri hydroelectric power station, via two double circuit 220 kV transmission lines. The facility is the largest electricity consumer in New Zealand. It uses about one third of the total electricity consumed in the South Island and 13% of the total electricity nationwide, equivalent to around 680,000 households.
New Zealand Aluminium Smelters had a contract for electricity supply with Meridian Energy for the continuous supply of 572 megawatts for the period 2013 to 2030.
The price it pays for electricity was renegotiated in 2015
and 2021.
The 2021 agreement was reported to have reduced the price from
5.5 to 3.5c per kWh, with the smelter scheduled to close in 2024.
Environmental effects
Aluminium smelting via the
Hall–Héroult process
The Hall–Héroult process is the major industrial process for smelting aluminium. It involves dissolving aluminium oxide (alumina) (obtained most often from bauxite, aluminium's chief ore, through the Bayer process) in molten cryolite and e ...
produces
carbon dioxide
Carbon dioxide is a chemical compound with the chemical formula . It is made up of molecules that each have one carbon atom covalent bond, covalently double bonded to two oxygen atoms. It is found in a gas state at room temperature and at norma ...
as a by-product. The basic reaction is Al
2O
3 → 2Al + 3"O". Oxygen equivalents react at the red-hot carbon anode, forming a mixture of carbon monoxide (that subsequently becomes carbon dioxide once released to the atmosphere) and carbon dioxide. For one tonne of aluminium, 1.55 tonnes of CO result, becoming 2.4 tonnes of CO
2. However, if all the oxygen were instead directly converted to CO
2, then only 1.56 tonnes of CO
2 would result. At the stated rate of 1.97 tonnes of carbon dioxide per tonne of aluminium, the production of 272,000 tonnes of aluminium in a year would emit 535,000 tonnes of carbon dioxide. In 2007, Tom Campbell, the chief executive of majority owner Rio Tinto Aluminium NZ, said that the smelter was among the top 5% of the world's 250 aluminium smelters in terms of low emissions.
Metal produced by Tiwai Point is marketed under the RenewAl brand, which according to NZAS guarantees that less than four tonnes of CO
2 is emitted for every tonne of aluminium produced.
Significant amounts of hazardous waste have been stored at the site, mainly spent cell liner (also known as spent pot lining) containing compounds including fluoride and cyanide. Estimates of the waste stockpiled at the site range up to a quarter of million tonnes.
It has been described as uncontrolled, unconsented and untreated in complete absence of any regulatory oversight or recognition, being the largest stockpile of hazardous waste in Australasia and posing an estimated $NZ300 million liability.
[
] Rio Tinto has committed $NZ4 million towards the removal of all aluminium dross and ouvea premix.
8,000 tonnes of
aluminium dross from the smelter were stored without consent in
Mataura
Mataura is a town in the Southland region of the South Island of New Zealand. Mataura has a meat processing plant, and until 2000 it was the site of a large pulp and paper mill.
Geography
Mataura is situated on and the Main South Line rail ...
from 2015 until 2021. If flooded by the nearby Mataura river, this "ouvea premix" would have released ammonia gas.
The New Zealand government subsidised New Zealand Aluminium Smelters to remove the toxic waste, which was achieved by July 2021.
Economic effects and threats of closure
NZAS reports that the facility employs 800 full-time employees and contractors and indirectly creates jobs for 3,000 people.
The smelter is reported to account for 10 percent of the
Southland region's economy.
Tiwai Point has frequently operated at a loss, such as in 2012 when it lost $548 million.
Analysts have commented that the profitability of the smelter is most dependent on prices for electricity, alumina and the finished aluminium as well as the New Zealand dollar.
Between 2008 and 2013, aluminium prices fell by more than 30 percent. Rio Tinto threatened to close the Tiwai Point smelter if it could not get a cheaper deal for electricity from retailer
Meridian
Meridian or a meridian line (from Latin ''meridies'' via Old French ''meridiane'', meaning “midday”) may refer to
Science
* Meridian (astronomy), imaginary circle in a plane perpendicular to the planes of the celestial equator and horizon
* ...
, or the Government failed to give it a substantial subsidy to cover losses.
In 2013, Rio Tinto again threatened to shut down the smelter unless it was able to continue re-negotiating favourable electricity prices with Meridian Energy. Meridian was one of several
state-owned enterprises
A state-owned enterprise (SOE) is a business entity created or owned by a national or local government, either through an executive order or legislation. SOEs aim to generate profit for the government, prevent private sector monopolies, provide goo ...
which at the time were proposed for privatisation by the
John Key
Sir John Phillip Key (born 9 August 1961) is a New Zealand retired politician who served as the 38th prime minister of New Zealand from 2008 to 2016 and as leader of the National Party from 2006 to 2016.
Following his father's death when ...
National Government. The government wanted to get the maximum possible sale price, which would potentially conflict with Rio Tinto's desire for low electricity prices. As a result, the Government announced it would subsidise Rio Tinto to keep the Tiwai Point smelter operating in the short term, garnering criticism from business commentators and opposition politicians. However, on 2 April 2013, John Key said Rio Tinto had rejected the Government's offer, preferring a "longer-term deal than the Government was prepared to offer". John Key stated that if the smelter couldn't sustain itself financially, the government was not interested in keeping it open long-term.
Much media commentary in April 2013 focused on the impact of closure on both domestic power prices and share prices when the State-owned enterprise and electricity generator Mighty River Power would be partially sold off to private investors. NZAS produced a report which claimed that if the smelter closed, there would be a permanent loss to Southland's GDP of about 7-8 percent and that 2-3 percent of Southland's population could move out of the region.
Invercargill
Invercargill ( , ) is the southernmost and westernmost list of cities in New Zealand, city in New Zealand, and one of the Southernmost settlements, southernmost cities in the world. It is the commercial centre of the Southland Region, Southlan ...
mayor
Tim Shadbolt
Sir Timothy Richard Shadbolt (born 19 February 1947) is a New Zealand politician. He was the Mayor of Invercargill from 1998 to 2022, and previously Mayor of Waitemata City.
Early life
Shadbolt was born in the Auckland suburb of Remuera on 19 ...
said it was a myth that closing the smelter would result in lower power prices for others, and vowed to keep it open.
In August 2013, the New Zealand government agreed to make a $30 million payment to NZAS as a deal to support the smelter and to save jobs, in exchange for agreeing the smelter could be closed before January 2017.
Finance Minister
Bill English
Sir Simon William English (born 30 December 1961) is a New Zealand former politician who served as the 39th prime minister of New Zealand from 2016 to 2017 and Leader of the New Zealand National Party, leader of the New Zealand National Party, ...
said the Government would make no further contribution to support it,
which he reiterated in 2015 following speculation that Rio Tinto was seeking to sell the smelter.
In 2016, an analyst at First New Zealand Capital (FCNZ) utilities said that the smelter was thought to be breaking even, helped by favourable currency rates and low alumina prices.
Price negotiations, 2019 to 2024
In October 2019, Rio Tinto announced a strategic review of the Tiwai Point Aluminium Smelter, including a wide range of issues associated with closure. The NZAS chief executive Stew Hamilton said that they had been losing money for the previous 12 months, and that options ranged from operating at the status quo, which would require cheaper power, to closure of the plant.
During
New Zealand's lockdown for the Covid-19 pandemic, the smelter was deemed an essential service and exempt from restrictions.
On 31 March 2020, Rio Tinto announced that it would close potline four, to ensure it could cope with the restrictions at the plant that are needed because of the
coronavirus pandemic
The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...
. Potline 4 originally opened in 1996 but was turned off for six years between 2012 and 2018 before reopening as a result of an uptick in aluminium prices and a new deal with power supplier Meridian. Potline four is smaller than the smelter's other three potlines, producing about 31,000 tonnes of aluminium a year, about 9 per cent of the smelter's total output, and consumes about 50 MW of electricity.
On 9 July 2020, Rio Tinto again announced that it would close the smelter. The company said that it would wind down operations and end New Zealand Aluminium Smelters Limited after a strategic review that "showed the business is no longer viable given high energy costs and a challenging outlook for the aluminium industry". The company stated that 1000 jobs would be directly lost from the closure, and 1600 jobs indirectly connected to the smelter would also be under threat. The decision followed a 25% decrease in aluminium prices over the prior 18 months, and increasing power costs.
At that time, Rio Tinto said it intended to close the smelter in August 2021.
The smelter featured in the
2020 general election, with many parties pledging to keep – or try to keep – the smelter running for at least some time. The
National Party National Party or Nationalist Party may refer to:
Active parties
* National Party of Australia, commonly known as ''The Nationals''
* Bangladesh:
** Bangladesh Nationalist Party
** Jatiya Party (Ershad) a.k.a. ''National Party (Ershad)''
* Californ ...
announced that, if it won the election, it would keep the smelter running for at least five years and would facilitate negotiations between Rio Tinto, power companies and
Transpower to achieve a more cost-competitive environment.
New Zealand First
New Zealand First (), commonly abbreviated to NZ First or NZF, is a political party in New Zealand, founded and led by Winston Peters, who has served three times as Deputy Prime Minister of New Zealand, deputy prime minister. The party has form ...
leader
Winston Peters
Winston Raymond Peters (born 11 April 1945) is a New Zealand politician. He has led the political party New Zealand First since he founded it in 1993, and since November 2023 has served as the 25th Minister of Foreign Affairs (New Zealand), ...
said that keeping the smelter open would be a bottom line in any coalition negotiations, and that he had a 20-year plan for the smelter. The Government ruled out any further bailouts of the company. Prime Minister and Labour leader
Jacinda Ardern
Dame Jacinda Kate Laurell Ardern ( ; born 26 July 1980) is a New Zealand politician and activist who was the 40th prime minister of New Zealand and Leader of the New Zealand Labour Party, leader of the Labour Party from 2017 to 2023. She was ...
initially said that a Government project to widen the
Homer Tunnel
The Homer Tunnel is a 1.2 km (0.75 miles) long road tunnel in the Fiordland region of the South Island of New Zealand, opened in 1953. New Zealand State Highway 94 passes through the tunnel, linking Milford Sound to Te Anau and Queenstown ...
would provide some local jobs, but that no one industry could offset the job losses. Later, Labour announced that it would negotiate to extend the life of the smelter by three to five years if elected, seeking to protect jobs in the short term to provide time for the community to consider alternative options. Local politicians also lobbied the Government to preserve the smelter in some way.
On 14 January, Rio Tinto and Meridian Energy agreed to continue Tiwai Point's operations until December 2024, with 100MW of its baseline power to be supplied by
Contact Energy
Contact Energy Limited is a New Zealand electricity generation, electricity generator, a wholesaler of natural gas, and a retailer of electricity retailing, electricity, natural gas, broadband and Liquefied petroleum gas, LPG.
It is the second ...
.
The price reduction was later reported to have been from 5.5c to 3.5c per kWh,
but with no change to transmission fees.
In July 2022, NZ Aluminium Smelters announced that it would seek new power supplies to try and remain open beyond the scheduled 2024 closure date, this time suggesting a new strategy of seeking power from suppliers other than Meridian Energy.
Twenty year supply contracts
After two years of negotiations, new supply contracts were agreed in May 2024 between the smelter and three electricity suppliers: Mercury, Contact Energy and Meridian Energy. The contracts are for a twenty year term, and include some changes in contract conditions. The smelter is now required to give at least two years notice of closure, and there are penalty payments of at least $180 million for early closure. The new contracts also include requirements for the smelter to provide a
demand response
Demand response is a change in the power consumption of an electric utility customer to better match the demand for power with the supply. Until the 21st century decrease in the cost of pumped storage and batteries, electric energy could not b ...
capability to reduce demand by up to 185MW during times when the electricity system is under stress. The supply new contracts were expected to provide greater certainty for the electricity sector as a whole, and lead to new generation proposals going ahead.
References
External links
New Zealand Aluminium Smelters Limited
{{coord, -46.589184, 168.384022, region:NZ_type:landmark, display=title
Buildings and structures in the Southland Region
Aluminium smelters
Bluff, New Zealand
Organisations based in Invercargill