Stars appear to be aligning for Tiwai aluminium smelter to remain open for longer

Tuesday, 20 October 2020

Southland’s leaders are quietly optimistic the Tiwai Point aluminium smelter will remain open for another three to five years. A decision is expected before Christmas.

The stars appear to be aligning for the Tiwai Point aluminium smelter to remain open for another three to five years.

Smelter majority owner Rio Tinto announced in July it would close the plant near Bluff in August 2021, given its high energy costs and a challenging outlook for the aluminium industry.

However, Southland leaders and now the Labour Party have stepped in to try and keep it open for longer, given 1000 jobs would be lost, another 1600 indirect jobs would be at risk and the economy would take a massive hit.

A spokesman for finance minister Grant Robertson said this week a priority of the new Government was to reach an agreement with Rio Tinto that would result in the plant staying open for three to five more years so jobs could be preserved and a transition to other industries facilitated.

And Rio Tinto has told Stuff on Tuesday that it wants to talk to the incoming Government with urgency – once the Government has been formed in coming weeks - so it can give certainty to its staff and the community about the plant's future before Christmas.

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Southland Mayoral Forum chair Tracy Hicks, also the Gore District Mayor, agrees the stars appear to be aligning for the smelter to remain open for another three to five years.

Rio Tinto pacific operations managing director Kellie Parker said the Labour Party’s policy before the election recognised that Tiwai had been “unfairly overcharged” for transmission costs for nearly a decade.

That Labour policy had also made it clear that the newly elected Government would prefer Tiwai to remain operating for a longer three to five year period, and that it would work to deliver a fairer transmission cost for the smelter, Parker said.

“We congratulate Prime Minister-elect Jacinda Ardern on her party’s victory and look forward to discussing this with her team as a matter of urgency once the new Government is formed in a few weeks.

“We would like to be able to provide certainty for our team and our community before Christmas.”

Gore District Mayor Tracy Hicks, one of the Southland leaders lobbying the Government to help keep the smelter open for longer, agreed the stars appeared to be aligning for the plant to keep operating for another three to five years.

“Everyone’s on the same playing field at the moment and we just have to get it done as soon as we possibly can,” Hicks said.

Southland Chamber of Commerce president Neil McAra is quietly optimistic the smelter will remain open for three to five years.

“We have to be careful we don’t count our chickens before they hatch but I feel pretty positive it's moving in the right direction.”

The December timeline for a decision to be made was critical, but discussions could not commence until after the new Government was formed.

Southland Chamber of Commerce president Neil McAra, who has also been lobbying the Government, said he was “quietly optimistic” the smelter would remain operating for another three to five years.

It was in everyone’s best interests for the smelter to remain open and the Government had done its homework and realised it as well, he said.

“No one benefits from an early closure. It’s not only jobs, it’s the $450m to the economy, the power would go nowhere, power prices would instantly go up … the list goes on and on,” McAra said.

“Now there’s a need to get on and put in place an agreement [before Christmas] that makes that possible.”