New Zealand Minister: Rio Tinto Declines Government Help In Energy Contract Talks

   By Lucy Craymer 
 

WELLINGTON--Rio Tinto PLC (RIO) has declined the New Zealand government's help in negotiations over an energy supply contract between Rio Tinto-controlled Pacific Aluminium and electricity provider Meridian Energy Ltd., the minister for state-owned enterprises, Tony Ryall, said Tuesday.

"Over the weekend the multi-national mining corporation Rio Tinto said it appreciated the government's intentions but was unable to accept the (government's) offer" to help bridge the gap in talks between Pacific Aluminium, which owns nearly 80% of the country's only aluminum smelter, and Meridian, Mr. Ryall said in a statement. He added that Pacific Aluminium and Meridian have both indicated a willingness to continue discussions.

Pacific Aluminium has been in talks with Meridian for nine months as it looks to negotiate a better price deal on an existing supply contract for the Tiwai Point aluminum smelter as aluminum prices have tumbled, making the plant uneconomic.

Last week Meridian said it doubted a deal would be reached because of the big price gap between the rate at which it was willing to supply power to the plant, New Zealand Aluminium Smelters Ltd., and the amount the company was willing to pay.

Pacific Aluminium was unavailable for comment.

Write to Lucy Craymer at [e-mail]

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