Minister in talks with Kinleith Mill owners over energy options

Wednesday, 10 September 2025

Minister for Regional Development Shane Jones says he’s working on an energy deal for Tokoroa’s Kinleith Mill, with the results of talks expected this year.

By the end of 2025, Minister Shane Jones should know if the Japanese owners of Tokoroa’s Kinleith Mill will accept an energy deal to allow the mill to continue operating.

The regional development minister told the Waikato Times that a visit to his office by the Japanese ambassador in the middle of last year alerted him “to the prospect that the Japanese investors didn't see a clear future in New Zealand with escalating energy prices”.

“Does New Zealand want these manufacturers remaining in regional New Zealand?” he asked.

Workers at Kinleith Mill produced its final roll of paper in June this year.

“And if it does, what's the appetite to work with the investors and management to better manage the transition to a more affordable source of energy?”

Jones said Cabinet had tasked him with looking into an on-site generator for the mill to be fuelled with byproducts from the industry.

However, it’s not the first time a government has attempted to help solve the mill’s energy issues. In September 2022, Labour’s then Forestry Minister Stuart Nash set up a $2 million joint feasibility study into the production of sustainable wood products, hydrogen and biofuels at the Oji Fibre Solutions-owned site.

Less than a year later, Labour’s next Forestry Minister Peeni Henare announced plans for a billion-dollar upgrade and expansion for Kinleith Mill.

“To the best of my knowledge Labour never did anything about it,” Jones said.

In May this year, Green Party co-leader Chlöe Swarbrick said the party wanted to bring Kinleith Mill back into state ownership.

“The status, however, of the Kinleith pulp mill is quite unique by dint of the fact that it draws on sawdust, chip, and other detritus from a host of sawmills dotted around the volcanic plateau.”

He said those sawmills would face major problems if they were not able to offload offcuts and sawdust to Kinleith.

“So on that basis there was a willingness in Cabinet to initiate a process as to how could the Crown play a role both to convince them, and de-risk the transition from these stupendously high energy costs, to an outcome which is embedded energy on site which takes them off the grid.”

Jones said the “final shape and form of any deal … will be informed by how long are the Japanese going to commit to New Zealand, and what terms they are capable of agreeing to in terms of the Crown”.

“If we can agree on conditions it could be a win-win situation.

“We've got a mandate to go into a deal and we've just got to get the deal signed off by the Japanese owners and approved by my Cabinet colleagues, and we'll be ripping into it.”

Oji’s New Zealand chief executive Jon Ryder confirmed he was working with ministers and officials “so there isn’t any update at this stage”.

Ryder said the company welcomes the recent comments made by Minister Jones.