Southland leaders welcome Labour's Tiwai policy, but wary of timing, funding

Monday, 28 September 2020

The Tiwai Point political talkfest continues, all while Rio Tinto’s deadline date inches closer.

One after another political parties have been rolling out their plans for the Tiwai Point aluminum smelter, if they were part of the Government following the October 17 election.

The Labour Party was the latest to make a Tiwai policy announcement on Monday when its leader Jacinda Ardern and Energy Minister Megan Woods visited Invercargill.

Rio Tinto announced earlier this year it would close the smelter in August 2021.

**READ MORE:

* Tiwai decision must be made soon, Southland leaders say

* Details of a transition package for Southland remain a mystery

* Transition package could help Southland deal with smelter closure

**

If elected, Labour wants to sort a deal with Rio Tinto to keep the smelter open for a further three to five years but has no plans to push to keep it open long-term.

If the Government and Rio Tinto reached an agreement Ardern said it would provide a three to five-year period to transition Southland’s economy.

Ardern stressed that Labour would not subsidise Rio Tinto's power costs, but would ask Transpower to review its line charges to help get a deal done.

Southland leaders welcomed Labour joining other parties in pushing for a Tiwai extension, although Southland Regional Leadership Forum spokesperson Tracy Hicks was weary time was ticking on getting a deal locked in.

“The key date in this whole conversation is December this year. Rio has made the comment, and it’s a realistic comment to make, that unless they can get an agreement on some way forward by the end of December then their plan will be to close in August 2021.

“Once we have an election it needs to be all hands to the pump to make sure that [deal] happens by December,’’ Hicks said.

Stuff asked Ardern if December was realistic, given the October 17 election.

“We’ll be working to it as soon a possible. We’ve got a role to play to try and conclude those negotiations, but so does Rio Tinto.’’

Rio Tinto managing director of Pacific operations Kellie Parker said both the Government and the Southland community have made it clear they would prefer a longer exit for the Tiwai smelter.

“We are always open to continuing conversations that would see fairer costs established for the smelter.’’

Parker acknowledged the ongoing uncertainty for employees at Tiwai and the Southland community but was encouraged both major parties have now committed to working with Rio Tinto for a post-election decision.

As part of the Labour's Tiwai policy, it will commit $5 million to set up a ‘transition unit’ in Southland to push other industry opportunities.

But the question many keep asking is, transition to what?

Hicks said the $5m commitment for a transition unit was good but he said the province required additional Government funding to help create new and sustainable jobs.

“[The $5m] is good but we need a firm and substantial commitment to funding, not just the transition office which will be based in Southland, but also the projects that will come out of that initiative.’’

Ardern travelled to Invercargill in July where she planned to announce a roughly $100 million recovery package for Southland in the wake of the likely closure of the Tiwai Smelter.

However, that $100m fund was scuppered by coalition partner New Zealand First at the eleventh hour because it wanted to push to help keep Tiwai open longer-term.

”I would have liked to have been able to have moved this along [in July]. I would have liked to have been able to give the community certainty earlier, that was our hope, but we couldn’t get an agreement across Government around a strategy,’’ Ardern said.

”That’s why I’m here now presenting a view as a Labour leader.’’

New Zealand First leader Winston Peters described Labour’s stance on Tiwai as confusing.

He said the $5m ‘just transition’ investment within the Ministry of Business would merely create many more Wellington bureaucrats.

“Southlanders should remember the experience of West Coasters after the last Labour Government doled out a $100 million transition package. Did that achieve economic transformation on the West Coast? No,’’ Peters said.

New Zealand First wants to push for a 20-year deal with Rio Tinto to help save jobs in Southland.

Ardern again pointed to the work being done in the aquaculture and oat milk industry as potential growth options to help transition Southland’s economy.

She added data storage was another prospect.

However, Ardern was most excited by green hydrogen production opportunities and felt that was a realistic option for Southland.

On Monday morning Ardern visited the Murihiku Marae in Invercargill where Ngai Tahu kaumatua Sir Tipene O'Regan spoke to a gathering via video link about Ngai Tahu’s desire to transition Tiwai into a green hydrogen plant.

O'Regan pushed the case for a green hydrogen plant to utilise the power generated at Manapouri.