Dr Russel Norman
Controversy has again flared over National's $30 million
handout to Bluff aluminium smelter owner Rio Tinto last year,
following the mining giant announcing a $US3.7 billion ($NZ4.43
billion) annual after-tax profit yesterday.
In August, the Government paid Rio Tinto a $30 million
sweetener to keep the ageing Tiwai Pt smelter operating, as
plunging global aluminium prices threatened up 700 direct
jobs and a further 2500 in the wider Southland area.
Green Party co-leader Dr Russel Norman said Rio Tinto's
$US3.7 billion profit yesterday showed the Government's $30
million ''taxpayer handout'' was unjustified and Prime
Minister John Key should ask for the money back.
''Rio Tinto took advantage of Mr Key's obsession with asset
sales by threatening to derail the sale of Meridian by
closing the Tiwai smelter, so Mr Key gave them $30 million of
public money,'' Dr Norman said in a statement yesterday.
The $30 million payout and numerous other concessions, many
undisclosed, were widely criticised at the time, as was a new
deal with state-owned-enterprise Meridian Energy.
Meridian is Tiwai's power supplier and was subsequently
partly floated on the sharemarket by the Government.
Meridian supplies Tiwai with about 15% of New Zealand's
electricity output, from the Manapouri power station, and its
float would likely have been in jeopardy without Tiwai as its
Dr Norman said the $30 million came ''in return for a promise
to keep the Tiwai smelter open until January 2017''.
'' The deal came during the lead-up to National's sale of
shares in Meridian,'' he said yesterday.
Rio Tinto is the world's second largest iron ore producer and
yesterday delivered a larger-than-expected profit and
Its underlying profit during 2013 was up 10% on the previous
year to $US10.2 billion, above analysts' expectations of
$US9.7 billion. After-tax profit, including impairments, was
Dr Norman said ''Mr Key seems more than content to write
cheques with the public's money to any corporate that comes
knocking on his door.''
As promised by Rio's chief executive Sam Walsh a year ago,
Rio Tinto boosted shareholder returns and slashed debt.
Shareholders will receive a $US1.92 dividend per share, up
from $US1.67 12 months earlier, while net debt was at $US18.1
billion at the end of 2013, down $US4 billion from six months
Massive cost-cutting drove the profit growth. Prices fell for
most of its commodities - with the exception of iron ore -
hurting earnings by $US1.3 billion, despite record
Rio cut operating cash costs by $US2.3 billion, exceeding the
2013 target of $US2 billion.
There was also a $US1 billion reduction in exploration and
evaluation spend, plus a 26% decline in capital expenditure
to $US12.9 billion.
''Today we've delivered real results to demonstrate the very
real and significant progress we've made,'' Mr Walsh told
reporters in London.
''The cost reduction results ... well, they're stunning.''
He said Rio would pay down more debt and stabilise its
business in 2014.
Mr Walsh rejected predictions of large falls in the iron ore
price, citing predictions the global economy would grow
strongly in 2014, in China and developed countries.
- Additional reporting by AAP