Transition package could help Southland deal with smelter closure

Monday, 24 August 2020

Gore district mayor Tracy Hicks believes Southland leaders made progress during a meeting with ministers about the future of Tiwai Point aluminium smelter on Monday. (File photo)

A transition package is on the cards for Southland, as it deals with the looming closure of the New Zealand Aluminium Smelter.

Gore district mayor Tracy Hicks believes good progress was made on Monday around plans to keep the Tiwai Point smelter open for another three to five years.

Southland leaders, led by Hicks, met with Finance Minister Grant Robertson and Energy Minister Megan Woods in Invercargill on Monday to discuss options for keeping the smelter open until the region has had time to develop alternative industries.

“It was a constructive meeting,” Hicks said. The “essence” of the discussion was how the lifespan of the smelter could be extended.

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“Ultimately, we would like to see the smelter stay,” Hicks said, but at this stage leaders were asking for at least five more years.

Minister of Finance Grant Robertson told Southland business leaders at a business breakfast on Monday that he supported a fair transition for Southland’s economy.

Robertson told the Regional Leadership Group that the Government, majority New Zealand Aluminium Smelter owner Rio Tinto, and Meridian Energy were in negotiations to create a managed transition.

A just transition package for Southland was also discussed, the group said in a statement.

This would fund projects identified in the Southland Regional Development Strategy to grow alternative industries and create jobs.

Hicks said the smelter’s closure would be a significant issue for Southland voters in the upcoming election.

“It is expected that all political parties will have a clear stance on this and while the timing of the election is not helpful, we have been proactive in taking the opportunity to engage directly with all party leaders to advocate for a managed transition,” he said.

However, Hicks acknowledged that any confirmation or decisions would be unlikely before the election.

This was the second in-person meeting Robertson and Woods had held with Southland leaders in Invercargill since Rio Tinto announced last month that it intended to close the smelter by the end of 2021.

As it is one of the region’s largest employers, 1000 staff are expected to lose their jobs. A further 1600 Southlanders would be indirectly impacted.

At a breakfast with business leaders earlier in the day, Robertson supported the idea of a three- to five-year transition for Southland’s economy – which would clearly be better than an abrupt exit, he said.

Robertson also confirmed that the Government would not be offering subsidies to Rio Tinto but would look for ways to reduce costs associated with the plant.