Serious metal : Strategizing for New Zealand Aluminum'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. Includes questions for dicussion. NOTE: This case is also available as a teaching case from the University of Auckland Business Case Centre, Case Number: UA-2005-018