Smelter likely to be around after 2012

It is looking likely that the country's largest electricity consumer, Comalco's aluminium smelter at Towai Point, will still be around after its power contract runs out in 2012.

Comalco buys most of its power under a long-term contract with Meridian Energy and the two have been negotiating a successor agreement.

Meridian chief executive Keith Turner said yesterday that the talks had been making real progress. "We have some growing confidence that we will be able to conclude a deal with Comalco."

Some critical principles had been agreed, but not the fine detail, he said.

"We are hopeful we will be able to be very positive by the end of the year or the end of the first quarter next year."

Because it consumes about 14 per cent of the country's power the question of whether the 30-year-old smelter would still be there after 2012 has been a source of some uncertainty for both the supply and demand side of the industry.

If the energy Meridian supplies the smelter from its Manapouri hydro scheme became available to other users, major transmission investment would be required to get it to market.