The stake divestures in smelters are part of SCC’s strategy to transform its business portfolio. Credit: Aleksandar Malivuk / Shutterstock.

Global mining group Rio Tinto has agreed to acquire Sumitomo Chemical Company’s (SCC) 20.64% interest in New Zealand Aluminium Smelters (NZAS) for an undisclosed sum.

This move will result in Rio Tinto’s complete ownership of NZAS upon the deal’s completion.

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In addition, Rio Tinto agreed to purchase SCC’s 2.46% stake in Boyne Smelters (BSL), which operates the Boyne Island aluminium smelter in Gladstone, Australia.

This acquisition will increase Rio Tinto’s interest in BSL to 61.85%. These transactions are part of SCC’s strategy to transform its business portfolio.

The completion of each deal is contingent upon satisfying various conditions, including obtaining regulatory approvals from New Zealand’s Overseas Investment Office and Australia’s Foreign Investment Review Board.

In conjunction with these acquisitions, NZAS has secured its operational future by signing 20-year electricity contracts with Meridian Energy, Contact Energy, and Mercury NZ.

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These agreements, which are subject to regulatory approvals and other conditions, will provide NZAS with 572MW of renewable electricity from New Zealand’s South Island, starting in July 2024 and extending until at least 2044.

Additionally, the new electricity arrangements include 20-year demand response agreements with Meridian Energy and Contact Energy.

Under these agreements, NZAS may be requested to reduce its electricity consumption by up to a total of 185MW, contributing to the stability of New Zealand’s electricity supply during peak demand periods.

Rio Tinto Aluminium CEO Jérôme Pécresse said “We are pleased the long-term future of the Tiwai Point smelter has been secured with these agreements, which were reached with a genuinely collaborative spirit between all parties.

“They give us confidence that our New Zealand workforce and assets can continue competitively producing the high purity, low-carbon aluminium needed for the global energy transition.

“This is an exciting new chapter, and we would like to thank everyone involved, including our new energy partners, our local Indigenous partners Ngāi Tahu, the Southland community, the New Zealand Government and our NZAS workforce for their support in getting us here today.”