NZ's Meridian extends deadline for Rio Tinto smelter contract

WELLINGTON, July 1 (Reuters) - Meridian Energy said on Wednesday that it would extend until August the deadline for when Rio Tinto (LSE: RIO.L - news) 's New Zealand aluminium smelter must decide whether to extend its power supply contract with the utility company.

New Zealand Aluminium Smelters Ltd (NZAS) will now be required to give notice by Aug. 3 on whether it will extend its contract beyond 2017, Meridian said, pushing back an initial deadline set for Wednesday.

"NZAS has been in discussions with a number of parties, including Meridian, with respect to its electricity requirements at its Tiwai Point smelter," Meridian Chief Executive Mark Binns said in a statement, adding that the smelter required more time to make its decision.

"We think it is in all parties' interests to ensure that a decision is based on the most complete information."

The decision could determine the future of the 350,000-tonne-per-year smelter, which is the country's single biggest energy consumer, following a battle by the plant's owners to slash its power costs.

The smelter, which has struggled with weak aluminium prices and a strong New Zealand dollar for several years, has been seeking cheaper power, even though it returned to an underlying profit of NZ$56 million ($37.90 million) in 2014 after two years of losses.

The plant was given a NZ$30 million subsidy in 2013 by the government to bridge the price gap between Meridian and the plant's owners, NZAS, which is a joint venture between Rio Tinto and Sumitomo Chemicals. ($1 = 1.4778 New Zealand dollars) (Reporting by Naomi Tajitsu, editing by G Crosse)