The Tiwai Point Aluminium Smelter is blaming deteriorating economic conditions as it speeds up cost cutting plan which will see 100 jobs cut.

In August, 2011, New Zealand Aluminium Smelters said it would reduce its workforce by 100 over five years, however today it said the cuts would be made by November. The company said headcount had already been reduced by 35 jobs through natural attrition.

General manager, Ryan Cavanagh said: "The decision to bring forward plans to reduce the size of our organisation has not been taken lightly. We will ensure all impacted employees are being provided the appropriate support".

"The smelter will work to redeploy employees to vacant roles within NZAS and also support employees to explore redeployment opportunities within Pacific Aluminium and Rio Tinto.

"NZAS is facing tough economic headwinds, therefore it is imperative that we take urgent action right across our business to make the smelter resilient in any market conditions," Cavanagh said.

''We're facing unprecedented external challenges in the aluminium industry,'' Cavanagh said via a spokeswoman, with low international metal prices being exacerbated by a strong New Zealand dollar.

''In New Zealand dollar terms, the metal prices are almost at a 25 year low. It's actually much lower than during the global financial crisis.''

The spokeswoman said the company had begun meetings with staff about the cuts, which could include forced redundancies.

''Each department is meeting with their teams today. They started really early to get the night shift guys and anyone who's not on site will get phoned," she said.

According to the Engineers, Printers and Manufacturers Union (EPMU), NZAS had previously warned staff in disestablished positions that if they did not accept a redeployment elsewhere in the business, they faced redundancy without compensation.

However today the company had said affected staff would be paid compensation of two weeks for every year they had been employed, up to a maximum of 52 weeks pay, the union said.

EPMU Southland organiser Trevor Hobbs welcomed the move but said ''the reality is that's probably half of what a Rio Tinto smelter [worker] would get in Australia.

''I don't know what the reaction will be from my members down there. I imagine for some it will suit them just fine, but I imagine for the vast majority of workers they will be concerned about their ongoing employment opportunities,'' Hobbs said.

Earlier this year Meridian Energy revealed Rio Tinto, majority owners of the smelter, had approached it in an attempt to renegotiate an electricity supply agreement due to come into effect next year.

A spokeswoman for the smelter declined to comment on the negotiations between Rio Tinto and Meridian.

Tiwai uses around 14 per cent of New Zealand's electricity, supplied from the Manapouri Power Station in Fiordland, which was built in 1970 to serve it.

Tiwai employs around 750 staff and it plays a substantial role in the Southland economy.

According to the company, the smelter contributes $525 million to the Southland economy annually, 9 per cent of the province's gross domestic product, and supports more than 3200 jobs directly or indirectly.

Last year the company spent $391 million with New Zealand suppliers, including $51 million in Southland.

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