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- Release Date: 08/08/13 10:48
- Summary: GENERAL: MEL: Meridian reaches commercial agreement with NZAS
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MEL
08/08/2013 08:48
GENERAL
REL: 0848 HRS Meridian Energy Limited
GENERAL: MEL: Meridian reaches commercial agreement with NZAS
For immediate release: Thursday 8 August, 2013
Meridian Energy and New Zealand Aluminium Smelters Ltd (NZAS) have concluded
the renegotiation of their electricity contract.
"After a year of robust negotiations we have reached an agreement that is
commercially acceptable to both parties and provides a greater level of
certainty for Meridian," says Meridian Chief Executive Mark Binns.
In the renegotiated contract Meridian agreed a new price, which will see a
reduction in the current electricity charge from July 1 2013 and allows for
price increases should the New Zealand dollar value of aluminium rise above
agreed levels. The contract period remains to 2030.
"The new agreement is inflation indexed and includes guarantees from or on
behalf of the NZAS parent companies Rio Tinto and Sumitomo Chemical Company,
Ltd. These guarantees demonstrate a commitment to the Tiwai Point smelter to
January 2017," adds Mr Binns.
Mr Binns says the deal provides the smelter with more flexibility in its
operations, whereby it can reduce its contracted volume from 572 MW to 400 MW
from 2015. In addition, NZAS can terminate the deal from January 2017,
providing notice is given at least 15 months prior.
"Meridian is delighted that the parties could find a mutually acceptable
position - and trusts that the new pricing framework and associated
arrangements assist NZAS in establishing a competitive cost position for the
future," says Mr Binns.
It is back to business as usual now and we look forward to continuing to work
with NZAS," adds Mr Binns.
The Government has made a contribution of NZ $30 million to secure the
medium-term future of the smelter and provide greater certainty for the
electricity market. A statement will be released via the Finance Minister's
office.
Meridian was approached by NZAS and its shareholders in July 2012 to discuss
potential changes to its existing electricity contract. This concludes the
renegotiations.
ENDS
For media enquiries, contact:
Claire Shaw
Corporate Communications Manager
Meridian Energy
021 370777
[email protected]
meridian.co.nz
For investor relations queries, contact:
Owen Hackston
Investor Relations Manager
Meridian Energy
(04) 382 7496
[email protected]
meridian.co.nz
End CA:00239414 For:MEL Type:GENERAL Time:2013-08-08 08:48:18
