Boyne Smelters plans for life with less power as prices rise
WHILE he remains "cautiously optimistic" about bagging a deal with CS Energy, Boyne Smelters Limited general manager Joe Rea says the smelter operation is planning for life without about 15% of its power supply.
The Rio Tinto-backed smelter and CS Energy have been locked in talks to work out a supply deal for 140 megawatts of energy into the operation.
The smelter currently gets the bulk of its 950MW of energy from Gladstone Power Station, where Rio has just over a 42% stake.
However, talks have reached somewhat of a stalemate, with Mr Rea telling the GEA Major Industry Conference delegates on Wednesday that CS Energy's offer was not competitive.
"So we're in a difficult position, and at the moment we've got people working on a scenario on what happens when we can't agree on a price that is competitive," he said.
He told delegates a team at the smelter was planning for the worst-case scenario, if a deal could not be reached.
"We're asking what it would take to shut down cells (reduction cells) and how we can possibly do that in a way that we can start it back up when it's competitive to do so," he said, adding the smelter would be ready to deal with the loss of 140MW of power should it not be able to reach a deal.
"I'm cautiously optimistic a deal can be done, but we're confident that if it can't that we have a lot of ingenuity and grit to be able to continue operating.
"It would be a shame if we got to that point because a deal can't be done…but we will be prepared if it comes to that."
CS Energy said it could not make any comment on the commercial discussions between the two companies.