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Serious metal : Strategizing for New Zealand Aluminium's future sustainability

Abstract

By March 2005, New Zealand Aluminium Smelters (NZAS) had gained a reputation as the leading supply of high purity aluminium to global markets. Comalco (a wholly-owned subsidiary of Rio Tinto) and Japanese company Sumitomo Chemical, NZAS’s Tiwai Point smelter converted alumina imported from Australia into both commodity aluminium and value-added products. Yet, despite its success, based on ongoing attention to quality and efficiency at its 34-year old plant and a committed workforce drawn from among a supportive regional community, the smelter’s future was under a cloud. NZAS, user of 15% of New Zealand’s largely hydro-based electricity supply, needed to renegotiate its historically favourable supply deals in a politically sensitive environment. Overall demand was increasing and alternative supply options were hotly debated. A further issue was the viability of self-generation to support other supply options. NZAS was also working with the government for a Negotiated Greenhouse Gas Agreement ahead of a carbon tax being implemented in April 2007. The outcomes of both issues were crucial to NZAS’s continuance.

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Case Description
Business Case Study NoUA-2005-018
Number of Pages20
CategoryDecision point; Teaching case
Teaching NotesTeaching notes available
CompanyNew Zealand Aluminium Smelters Limited
Setting - CountryNew Zealand
IndustryManufacturing

Source
SourceAuckland, NZ. Publisher: University of Auckland Business Case Centre. Pages: 1 - 21