(Bloomberg) -- Rio Tinto Plc will keep its New Zealand aluminum smelter operating until at least 2044 after agreeing new electricity supply agreements.

The mining giant has agreed deals with Meridian Energy, Contact Energy and Mercury New Zealand that provide price certainty for the 572 megawatts of power that the smelter at Tiwai Point requires, it said in a statement Friday. Rio is also buying out its 20.6% minority partner in the plant, Sumitomo Corp., to take 100% ownership.

Rio faced decisions on the future of the smelter after saying in early 2021 it would be closed late this year. The company had questioned the viability of the business given high energy costs and the outlook for the aluminum industry.

“We are pleased the long-term future of the Tiwai Point smelter has been secured with these agreements, which were reached with a genuinely collaborative spirit between all parties,” said Rio Tinto Aluminium Chief Executive Jérôme Pécresse. “They give us confidence that our New Zealand workforce and assets can continue competitively producing the high purity, low-carbon aluminum needed for the global energy transition.”

As part of the deal, Rio has agreed to a dry year response arrangement that will see as much as 185 megawatts of power made available out of its contract for national supply in the event of shortages. It has also agreed to environmental remediation of the smelter site.

No price terms were disclosed for the long-term power contracts, which are subject to regulatory approval.

The Tiwai Point smelter accounts for about 13% of New Zealand’s national electricity demand, and questions over its future had led to uncertainty over investment in new generation projects. 

The transaction is “further proof that large industrial businesses can utilize New Zealand’s renewable energy advantage and create low carbon sustainable products, high value jobs and export dollars for our country,” said Neal Barclay, chief executive at Meridian, which secured a 20-year deal to supply 377 megawatts.

Contact will provide 120 megawatts for at least 10 years. Mercury will initially provide 50 megawatts, stepping up to 75 megawatts in 2027.

(Updates with Meridian CEO comment in 8th paragraph)

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