Southland's giant Tiwai Point aluminium smelter is losing a third of its daily production after a transformer failed on Sunday.
The enforced cutback is worth about $1 million a day. The 280-tonne-a-day cut at the Bluff smelter is far more than the 10 percent production cutbacks introduced in May because of high wholesale power prices, the result of a summer drought.
Only last month the Rio Tinto-controlled smelter indicated that it would soon return to full production. The smelter is one of the 20 biggest in the world, able to produce up to 350,000 tonnes of aluminium a year from three potlines.
The company said it was assessing the degree of damage to the transformer but it was too early to say how long the potline would be out of action.
The shutdown was "managed carefully and safely" without incident or injury, New Zealand Aluminium Smelters general manager Paul Hemburrow told The Dominion Post. "We are working with customers to minimise the impact to them," he said.
To add to Tiwai Point's problems, the global aluminium industry is being hammered by a 40 percent plunge in metal prices from almost $US3400 ($NZ5700) a tonne in July to about $US2000.
About 90 percent of the world's aluminium smelters are understood to be losing money.
