NZ Aluminium Smelters halts $70m of capital spending
BUSINESSDESK: New Zealand Aluminium Smelters, which operates the smelter at Bluff, has halted $70 million of planned capital spending, citing "extremely challenging" market conditions that have eroded margins.
The change affects $15 million planned for the remainder of 2012 and 2013 and follows a review of all capital and maintenance spending at the site, it says in a statement.
"Given the extremely challenging market conditions, halting project work on site is one of a number of actions being taken to try and return NZAS to viability as quickly as possible," general manager Ryan Cavanagh says.
"Other initiatives include the completion of an organisational restructure, including implementing redundancies, by the end of November."
NZAS is in talks over electricity prices for the aluminium smelter with Meridian Energy as the operation that takes about 15% of New Zealand's electricity seeks to trim one of its biggest expenses.
This month the company said it will lay off 65 of its 800 workers in addition to 100 to be shed over five years that it flagged last year.
Rio Tinto owns 79.36% of NZAS and Sumitomo Chemical owns the remaining shares.