Campaign being launched to save Tiwai aluminium smelter

Thursday, 31 October 2019

Tiwai point Aluminium Smelter and wharf in the foreground.

Southland leaders will launch a campaign aimed at saving the Tiwai Point Aluminium Smelter from being closed.

Campaign leader Carla Forbes, of Market South, said the Fight for Fairness campaign was not about asking for a handout.

'It's about getting a fair operating environment for the smelter.'

The campaign would also focus on the fact the smelter was good for all of New Zealand, not just Southland, she said.

'Aluminium is a smart metal, it's in every iPhone, in aeroplane wings … it's the metal of the future and we make the world's best.

'It's a vital component in the technological landscape.'

Smelter owner Rio Tinto has not made any decisions about its future, but it is reviewing all options, including closure, citing low low aluminium prices and high energy costs as threats to its ongoing viability.

It plans to talk with the New Zealand Government and energy providers to explore options.

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Forbes said closure was not something Southland wanted to see.

The Fight for Fairness campaign would be led by Southland's civic and business leaders and would focus on demystifying the 'hearsay and assumptions', she said.

'We need to do everything which is practical to fight to keep the smelter with us here in Southland.'

The smelter was a great contributor to New Zealand, spending around NZ$450 million each year and accounting for 6.5 per cent of Southland's GDP, with export revenue of around $1 billion a year.

It employs 1000 people and another 1200 indirect jobs depend on the smelter.

Though it produced some of the highest purity and lowest carbon aluminium in the world it was weighed down by uncompetitive power costs, Forbes said.

The smelter had been charged nearly $200 million over the past 10 years for transmission infrastructure it did not use to take power to the North Island.

The team at Tiwai had no choice but to absorb those costs which had placed undue pressure on the operation, she said.

'The smelter's owners don't want a subsidy, they should be given a rebate,' she said.

Southland kept punching above its weight and deserved as much funding as northern regions, she believed.

'You just can't continue to gut the regions to pay for infrastructure in Auckland.'

Forbes said she did not understand why successive New Zealand governments were happy to give tax breaks to the movie industry totalling nearly one billion dollars.

'But they can't give the smelter a fair deal on transmission costs. If tax breaks stimulate that industry, why can't we stimulate smelting?

People thought they would get cheap power if the smelter closed, but it was not that simple, Forbes said.

'Firstly you would have to spend several hundred million dollars on upgrading the transmission grid to get the power out, as right now it can't flow north.

'Secondly, Tiwai has to give 12 months' notice of its intention to terminate its power contract giving generators plenty of time to retire their least economic plant.'

Dr Aaron Fox, who put together a thesis looking into the development of the Manapouri-Tiwai Point electro-industrial complex, said it was not as simple as saying the smelter's closure would mean more power for the rest of the country.

The Manapouri operation was built to supply continuous high load electricity to Tiwai and was not suited for the national grid and the supply of domestic customers, he said.