Can Southland's leaders save smelter jobs?

Tuesday, 14 July 2020

Rio Tinto have announced the NZAS smelter at Tiwai Point will close in August 2021.

Finance Minister Grant Robertson appears to have no interest in trying to get a short-term Tiwai Point smelter deal sorted to help nurse Southland and the rest of New Zealand’s economy through the aftermath of Covid-19.

Rio Tinto announced last week it will close its aluminum smelter near Bluff next year which would lead to the loss of 2600 direct and indirect jobs attached to the smelter.

Rio Tinto and Meridian Energy have not been able to reach an agreement around a power deal. NZAS contributes $406 million to the Southland economy (6.5 per cent of Southland's GDP) with export revenue of about $1 billion each year.

Stuff asked Robertson if the Government saw merit in pushing for a short-term deal to keep the smelter open while both the Southland and New Zealand economy rebounded from Covid-19, especially as the Government has a 51 percent shareholding in Meridian.

* 'Chance has passed' for deal to keep aluminium smelter open: Meridian

* Southland leaders vow to fight closure of Tiwai Point aluminium smelter

* Invercargill Mayor Tim Shadbolt 'absolutely shattered' by news of Tiwai Aluminium Smelter closure

It would allow Southland's leaders more time to pursue other potential opportunities to fill the hole in Southland’s economy when the smelter did close.

Roberton did not answer the question and instead trotted out a line he used last week saying “I heard a very definitive statement from Rio Tinto on Thursday about the closure, so the Government will now get alongside the people of Southland to grow jobs in the region”.

Stuff told Robertson’s office he had not answered the question and put it to him again.

A Robertson staff then said the plant was not closing until August next year which meant there was already some transition time.

“After that, there will be some jobs kept as a result of the clean-up that will have to take place post-closure (estimated $256m worth).’’

Both Prime Minister Jacinda Ardern and Robertson will visit Invercargill to talk to community leaders and Robertson has said the visit would not be about saving the smelter.

Regional Economic Minister Shane Jones and Energy Minister Megan Woods will also visit.

Southland Mayoral Forum chairman Tracy Hicks.

Meanwhile, the Southland Mayoral Forum wants a direct connection to any discussions taking place between central government and aluminium producer Rio Tinto so it can represent the interests of all Southlanders.

While Southland leaders came out fighting after last week’s smelter announcement, this week ahead of the Prime Minister’s visit they were still formulating a plan of how they could try to save at least 2000 jobs connected directly or indirectly to Tiwai.

Mayoral Forum chairman Tracy Hicks said any opportunity to get in front of the Prime Minister to discuss the potential job losses would be taken.

Hicks, who is the Gore district mayor, said the Forum was encouraging all parties to be engaged in discussions and explore all avenues to keep the smelter open before irretrievable steps were taken to close it.

“It’s not something that is going to happen overnight.

Invercargill National Party MP Sarah Dowie.

“While the decision to close is a commercial decision in as far as NZAS is producing a product for the international market, there is also a real human aspect in terms of this challenge and the number of people involved.’’

Hicks said the mayoral forum, which consisted of himself, Southland district mayor Gary Tong and Invercargill mayor Tim Shadbolt, wanted a direct connection to any discussions taking place between the government and Rio Tinto.

“We deserve the opportunity to represent the interests of all Southlanders given the impact of any decisions will be felt by the entire province.”

While Southland has a diverse economy and the ability and capacity to grow other sectors, those discussions needed to be put to one side until all options for the continuation of the plant were explored, he said.

He had received lots of emails from people with ideas on how they could save the smelter, and with possible uses for the Tiwai Point site after the smelter had closed.

Building a green hydrogen plant, or a green data centre had already been suggested.

Invercargill National MP Sarah Dowie said she was still “in formulation mode’’ about how to fight the job losses during her last months as an MP, but two factors needed to be considered.

”Do the directors [of Rio Tinto] believe it is possible to stay? And if not, how can we look at prolonging the exit for as long as possible given that we are dealing with a pandemic, so we can keep people in jobs in the interim?’’

“While people are angry at the decision I don’t think anyone can say they were surprised about it. Now the emotion needs to be taken out of the situation, and we need to be very analytical about it.’’

Dowie said it was time to ‘’brush off’’ the Southland Regional Development Strategy and look critically at the adverse affects the smelter closure would have.

The strategy was developed in 2016 and planned to attract 10,000 people to Southland by 2025, and the Government had at that time provided $2.4 million in funding to boost education, the primary sector, aquaculture, and tourism.

A Great South spokesperson said the organisation supported the actions of the Mayoral Forum and was still working through the details of the closure announcement.