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Rio Tinto signs deal to become sole owner of New Zealand Aluminium Smelters

FILE PHOTO: Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto

(Reuters) - Rio Tinto said on Friday it entered an agreement buy Sumitomo Chemical Co's 20.64% stake in New Zealand Aluminium Smelters (NZAS) to get full control of the country's only aluminum smelter.

NZAS is a joint venture between Rio, which held 79.36% stake and Japan's Sumitomo Chemical, which owned the rest. It operates the Tiwai aluminium smelter in South Island of New Zealand.

Separately, NZAS has concluded deals with energy generators Meridian Energy, Contact Energy and Mercury NZ to secure energy supply for at least next 20 years.

The deals include 20-year demand response agreements with Meridian and Contact, under which NZAS may be requested to reduce electricity consumption by up to 185 megawatts, to ensure secure supply to homes and businesses in New Zealand.

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In 2020, the miner had announced it would close NZAS due to high costs and a challenging market, but reached an agreement with Meridian Energy in 2021 to allow the smelter to continue operations until December 2024.

Rio Tinto has also signed a deal to buy Sumitomo Chemical's 2.46% interest in Boyne Smelters, which owns and operates the Boyne Island aluminium smelter in Gladstone, Australia. It did not reveal the value of the deal.

(Reporting by Ayushman Ojha in Bengaluru; Editing by Arun Koyyur)