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4005 - Sumitomo Chemical Co News Story

¥370 5.0  1.4%

Last Trade - 18/09/20

Basic Materials
Large Cap
Market Cap £4.48bn
Enterprise Value £16.33bn
Revenue £16.09bn
Position in Universe 208th / 3861

UPDATE 1-Rio Tinto to close NZ aluminium smelter in a blow to top power producer Meridian

Wed 8th July, 2020 9:39pm
(Updates with background on smelter's power consumption,
statements from Rio)
    July 9 (Reuters) - Global miner Rio Tinto  RIO.AX  said on
Thursday it will close its New Zealand Aluminium Smelters (NZAS)
venture due to high costs and a challenging outlook for the
aluminium market, in a blow to New Zealand's top power producer,
Meridian Energy. 
    NZAS, which is New Zealand's only aluminium smelter and the
country's single largest power user, consumes about 5,000
gigawatt hours of electricity a year, roughly 12% of the
country's power, to produce 340,000 tonnes of high-grade
aluminium annually.*:nL3N2773KZ
    Rio said it has given Meridian Energy  MEL.NZ  notice to
terminate the existing power contract, which will end in August
2021, when the wind-down of operations is expected to complete.
    "The strategic review concluded that the smelter ... is not
economically viable due to energy costs that are some of the
highest in the industry globally, coupled with a challenging
short- to medium-term aluminium outlook," the miner said in a
    "Extensive discussions with a wide range of interested
parties have failed to secure a power contract that will enable
the operation to become both competitive and profitable," Rio
Tinto said.
    The smelter is a joint venture, with Rio holding a 79.4%
stake and Japan's Sumitomo Chemical Co  4005.T  holding 20.6%,
and employs around 1,000 people directly. It made Rio an
underlying loss of NZ$46 million ($30.25 million) in 2019.

($1 = 1.5209 New Zealand dollars)

 (Reporting by Rashmi Ashok in Bengaluru, Editing by Franklin
Paul and Leslie Adler)
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