9 February 2022

Tiwai time extension toasted in Southland but Govt wary

Southland leaders yesterday celebrated Rio Tinto’s intention to keep the Tiwai Point aluminium smelter open beyond 2024, but the Government remains unsure about the company’s future.

The company, which owns the majority of New Zealand Aluminium Smelter (NZAS), announced yesterday it believed there was a long-term future for the Bluff operation past its previously signalled closure date of 2024.

But the Government made clear there would be no future subsidies for the company.

In a statement, chief executive and general manager Chris Blenkiron said NZAS was well placed to supply economies focused on decarbonisation.

‘‘With a global strategy focused on decarbonisation and growth — released in October last year — Rio Tinto does see a positive pathway for New Zealand’s Aluminium Smelter to continue operating and contributing to the local and national economies beyond 2024.

‘‘We are working closely with Ngai Tahu, Southland and key industry leaders to find the best way to achieve this.’’

The decision to keep the smelter open was celebrated by local leaders as it provides more than 2000 direct and indirect jobs and pumps about $90million in wages and $450million into the wider community annually.

Invercargill Mayor Sir Tim Shadbolt said he was ecstatic about the news.

‘‘It will have such a positive outcome to have it staying open for an undetermined length of time. It is a great news for the region — I think actually this a great move for the country because aluminium is making a comeback and the world’s economy needs clean, green products.’’

However, Sir Tim admitted some people in the region always thought the closures plan was ‘‘a bit the boy who cried wolf’’.

‘‘There was a bit that — there has been so many [announcements] of closures now, so many reprieves that we are just a little bit cynical. But everyone was supportive of the region and moved to make things happen. It is better to be prepared if they really decided to close.’’

Southland Business Chamber president and Just Transition oversight group co-chairman Neil McAra said it was a positive move for the region, but highlighted the Just Transition governance group would continue to explore another ways to diversify the region’s economy.

That included agriculture, aquaculture, a data centre and other potential industries, he said.

‘‘This work needs to continue on — whether the smelter keeps it open or not — because we want a diverse and robust long-term plan for Southland.’’

Energy and Resources Minister Megan Woods said ultimately, the future of the Tiwai aluminium smelter was a commercial decision which would be influenced by a number of factors, including profitability and the price of aluminium.

However, she highlighted that Meridian Energy was not in discussions with the smelter’s owner about a new electricity contract and discarding any potential subsidies to keep the smelter open.

‘‘Whatever the outcome, this Government has been clear and consistent that there will be no taxpayer subsidies paid to the multinational. ’’

She said her vision for the region had not changed and she wanted to create a more resilient local economy, developing new industries, and improving the community’s ability to manage change themselves, regardless of the decisions of any one firm.

Source: Otago Daily Times – 9 February 2022

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