Anglo-Australian Rio Tinto (ASX: RIO) said production at its New Zealand Aluminium Smelters Ltd subsidiary was being cut by about 5 percent due to high electricity prices.

The smelter is reducing its electricity consumption by about 30 megawatts and producing 1500 fewer tonnes of aluminium per month. About 10 percent of its electricity is taken from the spot market and is subject to current market pricing.

Head of the Major Energy Users Group, Ralph Matthes, said the cut will mean more than $1 million a week in lost export earnings.

According to him Rio Tinto is not the only export business to have cut production and if current high prices continue more companies will be forced to take drastic action.

"The level and haste at which wholesale electricity prices have increased is very concerning, with prices at these levels last experienced during the 2008 winter crisis," the smelter's general manager Ryan Cavanagh said in a statement.

Electricity prices have risen sharply over the past two weeks, with the rise reportedly driven by concerns over a possible summer drought affecting hydro lake levels.

NZ Aluminium Smelters is 79.4 percent owned by Rio and 20.6 percent owned by Japan's Sumitomo Chemical Co.