By Lucy Craymer
AUCKLAND--The New Zealand government remains confident that New
Zealand Aluminium Smelters and energy provider Meridian Energy Ltd.
will reach an agreement on a power-supply agreement, but failure to
do so wouldn't necessarily delay a partial privatization of Mighty
River Power Ltd., Minister of Economic Development Steven Joyce
said Wednesday.
State-owned Meridian said in August that NZAS, majority-owned by
Rio Tinto PLC (RIO), had approached the company about renegotiating
its power-supply agreement.
News of that move, and a decline in aluminum prices, sparked
concerns that NZAS may close, creating a national electricity
surplus and significant headwinds for all energy prices in the
country, which could make selling a stake in Meridian Energy and
other power companies more difficult.
NZAS consumes around 14% of the nation's electricity.
The New Zealand government plans to sell part of its stakes in
four energy companies, including Meridian, to return to surplus. It
said Monday that it would sell a 49% stake in Mighty River Power
between March and June 2013.
The Mighty River Power sale probably wouldn't be affected events
at the New Zealand Aluminium Smelter, Mr. Joyce said, in a speech
to the Institute of Financial Professionals in New Zealand.
"The nature of the electricity industry is that it has all sorts
of risks in it, which we all have to be aware of, and fundamentally
the aluminium smelter because of its size and its part in the New
Zealand economy, it is something you have to weigh up," Mr. Joyce
said.
"If you are putting a capital asset on the table you have to be
up front about all the opportunities and all the risks," he
added.
-Write to Lucy Craymer at lucy.craymer@wsj.com
