Rio Tinto arranges renewable power supply for New Zealand smelter

Rio Tinto Ltd (ASX:RIO) has struck long-term deals to secure a mix of renewable and demand response power for its aluminium smelter in New Zealand’s South Island, the mining giant said today.

The 20-year contracts will support the operations of the company’s Tiwati Point facility. They were signed with electricity generators Meridian Energy, Contact Energy and Mercury NZ to set pricing for an aggregate of 572 MW of electricity to meet the smelter’s entire electricity demand.

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The agreements are pending regulatory approvals and are expected to enter into force in July 2024 and run until at least 2044. Under the 20-year demand response contracts with Meridian Energy and Contact Energy, the smelter can be called on to lower its electricity consumption by up to 185 MW at times when demand by New Zealand homes and businesses is high.

New Zealand Aluminium Smelters (NZAS), the owner and operator of Tiwai Point, separately said that the agreement with Mercury will take effect from January 2025, with baseload volume stepping up from 50 MW to 75 MW in 2027.

Rio Tinto has just signed a deal to buy the minority stake it does not already own in NZAS from Sumitomo Chemical Company Limited.