COMMUNITY leaders are cautiously welcoming a proposal to save the Tiwai Point aluminium smelter — but are stressing any decision about the Southland plant should not be used as a political tool.
Last Friday, Deputy Prime Minister and New Zealand First leader Winston Peters’ call to save it was met with mixed responses.
Mr Peters said New Zealand First would ensure a 20-year electricity transmission cost agreement to incentivise the Tiwai smelter to stay open.
Invercargill Deputy Mayor Toni Biddle said while leaders would not reject the offer of help, they were also focused on a transition recovery package and period.
However, she also questioned the different messages coming from political parties, describing them as “frustrating”.
“To hear there is something that potentially they could do, and could do a lot quicker, we have an expectation that if that is the case it should be done before the election.”
Being “a step away” from negotiations on transmission costs and power pricing between Rio Tinto, the supplier Meridian and the Government was a frustration for the community.
“I would prefer that the people who are suffering as a result of these decisions are effectively thought of first, unconditional to any election period. I would prefer that a potentially five-year transition period for the wind-down of the aluminium smelter should be considered and considered now, and obviously the $100 million that was promised to Southland would be given to us anyway in the transition,” she said.
At a packed Invercargill Workingmen’s Club, Mr Peters said a government buyout was not what he was suggesting.
It did not need to be lost, and Southland had “something seriously viable”, he said.
It was a lie from “bureaucrats in Wellington”, that the smelter had its electricity costs subsidised; it had to pay the actual cost of supply, plus a margin of 10%.
Mr Peters said he wanted to give the smelter a “fair go” and then “things would look after themselves”.
He confirmed he had met with workers at Tiwai earlier in the day and said this news brought them hope.
However, earlier last week a spokesperson from the Prime Minister’s office confirmed Mr Peters had blocked Jacinda Ardern from announcing a $100 million recovery package for Southland.
A Rio Tinto spokesperson said it welcomed the support from Mr Peters.
“However, we don’t currently see a management buyout as a viable pathway. The strategic review of the operation concluded that the smelter is not economically viable due to energy and transmission costs that are some of the highest in the industry globally, coupled with a challenging short to medium-term aluminium outlook.”
Southland District Mayor Gary Tong, who was not at the meeting, said a decision needed to be made about Tiwai or the transitional package now.
“If he’s said he’ll do it after the election, that’s in September and we’ve only got till December.”
Great South chief executive Graham Budd said it supported all efforts to achieve a fair and globally competitive electricity cost for Tiwai, but action needed to be taken urgently.
Should a deferral of closure for a minimum of five years be made possible, Southland had both the capability and capacity alongside government to chart an alternative path towards economic sustainability and that a transition plan and support package would also be required, he said.