16 February 2024

Tiwai smelter closure would ‘bloody hurt’: Business Chamber

Rio Tinto says it is working as quickly as it can to make a decision on the future of the Tiwai Point Aluminium Smelter in Southland.

“We continue to work closely with [electricity] generators, Ngāi Tahu, and the community to secure a future for the smelter beyond 2024,” a spokesperson said.

In the meantime, the Southland Business Chamber said it was taking steps to ensure the region’s engineering and manufacturing businesses were well-prepared for any transition if the smelter closed in December, 2024.

No decision had been made on the smelter’s future, and chamber chief executive Sheree Carey said she hoped it would remain open for many years.

However, in the event it closed, Southland firms needed to be ready, she said.

In May, 2023 the Chamber secured five years funding from the Ministry of Business, Innovation and Employment [MBIE] for an initiative known as the Southland Engineering and Manufacturing Cluster, which Carey said would play a pivotal role in any transition.

The funding formed part of the previous Government’s $8.6m Just Transition package for Southland, she said.

The Southland Innovation Centre lay at the heart of the cluster, which was a pilot project in New Zealand and aimed to enhance the capability of Southland’s engineering and manufacturing sector, Carey said.

Its key focuses were to attract a skilled workforce to the manufacturing engineering industry, ensure businesses were ready to diversify into new industries and grab opportunities locally and abroad.

Carey estimated the smelter provided jobs for 750 people and supported an additional 2500 jobs in the region, with more than 60 engineering firms in Southland providing services to the smelter.

This was the reason the MBIE funding for the cluster was provided, she said.

“We need to get these guys looking at other opportunities and be ready in case Tiwai does [close], because it’s going to bloody hurt.”

Rio Tinto external affairs director Simon King said the smelter’s current electricity contract ends at the end of December.

Discussions with generators, Ngāi Tahu, and the community were continuing, he said.

“We want to secure a commercial outcome that allows the smelter to be sustainable throughout the commodity cycle, drives investment in new renewable generation and plays its part in the broader energy market by providing more flexible demand response when needed,” King said.

“We are conscious that our employees, Southland and the energy markets are all looking for certainty, and we are working as quickly as we can and will announce an outcome as soon as we can.”

Source: The Southland Times – 16 February 2024

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