Also a smelter essentialy only has two variables that control its profitability - the price of electricity and the price of aluminium. A smelter wants to have a long term futures contract for electricity supply, and matching long term futures contracts for selling aluminium on the commodities market.
They have some control over the price of electricity - the control is via:
* long term electricity supply options (e.g. the New Zealand government gave a smelter here a special decades long contract, so a company would set up a smelter in NZ, even though the bauxite is mined in Australia and shipped thousands of kms).
* possibly owning their own generation capacity (the NZ smelter had a large hydro dam built for it, and they had contractual control over its power).
* most importantly to optimise where to put the smelter to best take advantage of long term cheap power (cheap base load prices, supply reliability, political stability).
Shipping bauxite to NZ from AU is not far. Lots of bauxite is shipped from Australia to Norway to be smelted. Because NO has cheap hydro power, this is considered economical!
They have some control over the price of electricity - the control is via:
* long term electricity supply options (e.g. the New Zealand government gave a smelter here a special decades long contract, so a company would set up a smelter in NZ, even though the bauxite is mined in Australia and shipped thousands of kms).
* possibly owning their own generation capacity (the NZ smelter had a large hydro dam built for it, and they had contractual control over its power).
* most importantly to optimise where to put the smelter to best take advantage of long term cheap power (cheap base load prices, supply reliability, political stability).