RIO 2.05% $121.77 rio tinto limited

News: RIO UPDATE 1-Rio Tinto reaches deal to continue NZ aluminium smelter ops till 2024

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    Jan 14 (Reuters) - Global miner Rio Tinto (RIO) said on Thursday it had reached an agreement with electricity provider Meridian Energy (MEL) to allow its aluminium smelter in New Zealand to continue operations until December 2024.

    Rio Tinto had said in July it would close the New Zealand Aluminium Smelters venture due to high costs and a challenging market, putting over a thousand jobs on the line and dealing a blow to the country's top power producers.

    The decision to close the smelter had disappointed politicians and local power firms as it came when the economy was crippled by the COVID-19 pandemic.

    The miner said that while talks were ongoing with the government to address the smelter's high transmission costs, the deal with Meridian over power prices would make the smelter economically viable.

    The smelter, which employs thousands of people in the Southland region, is a joint venture between Rio and Japan's Sumitomo Chemical Co 4005.T . Rio had an underlying loss of NZ$46 million ($33.1 million) in 2019 arising from it.

    The agreement provides Rio Tinto, the New Zealand government, Meridian and the Southland community "more time to plan for the future", said Alf Barrios, chief executive officer of Rio Tinto Aluminium.

    In separate statements, Meridian Energy and fellow electricity provider Contact Energy (CEN) said they welcomed the move to extend the smelter's operations.

    ($1 = 1.3910 New Zealand dollars)

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