The owner of the Tiwai Point aluminium smelter in Southland says its working as quickly as it can on a power deal.

Businesses in the region are preparing for the potential closure of the smelter at the end of the year.

Operator Rio Tinto said it was engaged in "complex" and ongoing discussions with a range of parties, aimed at finalising electricity supply that will see a long term future for the smelter.

It needed an outcome that let the smelter stay viable as commodity prices fluctuated and that helped the whole energy sector supply power when it was demanded, it said.

There has been market speculation a deal needed to be done this month.

"We are conscious that our employees, Southland and the energy markets are all looking for certainty, and we are working as quickly as we can and will announce an outcome as soon as we can," it said.

Talks with power companies have been going on for more than two years.

Meridian Energy has said a deal needed to include reduced demand from the smelter, to benefit the electricity sector when the hydro lakes were low, and that a firm clean-up plan for the smelter site was also a factor.

Rio Tinto locked horns with the previous government over the state of the site, before cooperating on environmental assessments.

Reproduced with permission