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Tewai Smelter: The game changer

Tewai’s time is up?

The writing has been on the wall for some time now. For over a decade rumours on the imminent closure of New Zealand’s southern smelter has bubbled away. Now that closure seems even closer…

Smelter aluminium

At the time of publication Rio Tinto will still be closing down the Tewai Point smelter in 2021. However behind-the-scenes machinations continue (which is why there’s a question mark in the title above). At this stage we know a few key details:

 

  1. Tewai will not run forever. As it stands the plant is running at a loss for Rio Tinto – and the same can be said for a few of its other smelters around the globe. However due to the other efficiencies from an integrated supply chain the company enjoys an overall strong position in its aluminium processing. Still, at the heart of equation is the global price of aluminium and the need for cheap power to run the smelter. 2020 is the year where that equation has tipped in favour of the argument for shuttering the plant by Rio Tinto.

 

  1. Aluminium will last forever (kind of). While Rio Tinto may be leaving our shores aluminium isn’t going anywhere. For one thing, it’s incredibly recyclable – every piece of aluminium in the world can actually be melted down and used again. All our waste scrapped, re-melted and reused, ensuring the most efficient and sustainable outcome. Another reason aluminium is here for good – there are still plenty of reliable international suppliers exporting around the globe.
  1. Nothing is set in stone. While it’s highly unlikely at this stage, this may be still all be some high stakes jostling between the main parties. However no company in the industry can afford to take a ‘she’ll be right’ attitude within the current situation.

 

  1. Everything is still business as usual here. While some aluminium suppliers are reliant on Tewai most have alternatives – and that includes us here at Urban Group. Over decades we’ve carefully developed our global supply chain. Now we enjoy a responsive, adaptable supply arrangement with product regularly coming in from Australia, India, Sri Lanka & China.

 

  1. However there’s no room for complacency. Never has it been more apparent that, while expert manufacturing will continue to lead the way here in New Zealand, it still needs support. The challenges of the pandemic internationally prove the need for strong local development and we are proud of the robust relationships we’ve forged over the years with both suppliers and customers. No matter the situation down south, around the country, or across the oceans, Urban Group will continue to deliver the highest standards of product and service.