A decision is expected to be completed before the end of March.
Today's result, reported about three months earlier than usual, underscores why Rio Tinto is reviewing the future of the operation, said Stew Hamilton, chief executive of smelter operating company New Zealand Aluminium Smelters.
"No matter how hard or efficiently the team here works, we can't consistently offset the high price of power and transmission charges we face," he said in a statement. "This means we swing from delivering small profits to losses for our owners, making our financial viability uncertain."
Tiwai Point is the country's biggest electricity consumer and among the world's lowest-carbon producers of aluminium.
The plant, one of only two that can produce ultra-high purity aluminium, signed a new long-term power agreement with Meridian Energy in 2013 intended to keep it viable long-term. It secured an additional supply in 2018 to allow it to restore production from a mothballed pot line, only to then see aluminium prices slide steadily later that year.
Pacific Aluminium has been talking to power supplier Meridian Energy, national grid operator Transpower and the government, to try and negotiate a lower delivered electricity price.
It wants a lower power price and separate treatment for the cost of the transmission assets it uses from Meridian's Manapouri power station to the smelter at Bluff.
The smelter's annual transmission bill has risen from about $40m in 2008 to $65m currently. That is about 7 per cent of the country's transmission bill, yet it accounts for only about 2 per cent of grid usage.
"If we can secure an internationally competitive power arrangement that enables us to be consistently profitable and a transmission charge that more accurately reflects the service we receive, NZAS will be well placed to continue to be a vibrant part of the New Zealand economy," Hamilton said.
Analysts and generators are sceptical Rio will shut the plant, particularly given the cost of remediating the site. Contact Energy, the second-largest South Island generator, this month said it had offered Meridian an increased back-up supply at a lower price to assist efforts to keep the smelter operating.
Tiwai's production last year was just shy of the record 354,030 tonnes achieved in 2011, the last time all four of the site's pot lines were operating.
Average prices on the London Metal Exchange were 15 per cent lower at US$1,791 a tonne. They were at US$1,677 a tonne on Friday. That and lower regional premiums reduced revenue by $18m, the company noted.
While the firm benefited from a lower average exchange rate – 66 US cents compared with 69 cents in 2018, that wasn't enough to offset a $76m increase in raw materials, consumables, wages and other costs.
