Smelter closure: Govt promises support to Southland

The Government says it will support the Southland economy following today's news that Rio Tinto plans to close the Tiwai Point aluminium smelter next year.

More than 1000 jobs appear set to go in the region following this morning's announcement by the mining giant.

Finance Minister Grant Robertson said the Government would step in to help offset the predicted loss.

“The smelter supports hundreds of jobs in Southland and the Government will work with the local community to support economic development in the region to help offset this loss.’’

The closure of the smelter had been long-predicted but that did not make the news any easier to take, Mr Robertson said.

Rio Tinto says it plans to close the smelter next year. Photo: Laura Smith
Rio Tinto says it plans to close the smelter next year. Photo: Laura Smith

‘‘We know the strengths of Southland and we want to build on them in areas such as agriculture, aquaculture and manufacturing,’’ Mr Robertson said.

 

‘‘There is also an opportunity to support other energy intensive projects like green hydrogen and data centres.’’

Energy Minister Megan Woods said closure of the plan would eventually free up around 13% of total power generated in New Zealand, which would have a positive impact on prices.

“I also want to make clear that the Government expects Rio Tinto to will meet their obligations for clean-up of the site (an estimated $256 million) and do the right thing on the dross,” Dr Woods said.

Rio Tinto said the wind-down plans come after its own strategic review concluded that the business is no longer viable given high energy costs and a challenging outlook for the aluminium industry.

The company has given notice that it was terminating its electricity contract with Meridian Energy in August 2021 "when the wind-down of operations is expected to complete".

Meanwhile, today’s announcement will result in cheaper electricity for New Zealand households and the chance to swiftly decarbonise transport and industry, Greenpeace says.

Greenpeace Executive Director, Dr Russel Norman, said the closure would release "a huge amount of low-carbon and affordable power back onto the grid".

"The Tiwai closure will mean cheaper power for New Zealand households. It also means there is more clean, renewable energy that can be used to power our cars and industries as we move to a zero carbon economy.

"This will cut climate emissions out of the transport and industrial sectors, while simultaneously helping to reduce New Zealand’s current account deficit by cutting the billions of dollars we spend on importing oil for the transport sector.

"Transpower is already developing the transmission capacity to bring the surplus power north via the Clutha Upper Waitaki Lines project which already has approval.

"With a ready supply of clean and affordable hydropower now being made available, the Government should create the conditions needed to increase the number of electric cars, buses and trains."

Norman also says Rio Tinto’s departure blows any case for new coal, gas or oil development completely out of the water.

"The argument for more fossil fuel exploration, extraction and generation is over."

Norman says the Government needs to move quickly to develop a plan to deal with the Tiwai closure. This includes ensuring a just transition for workers in the region.

- additional reporting NZ Herald

 

Comments

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It is absolutely clear what is happening here. There is very little 'noise of disaster' from Megan Woods. I have no doubt at all that behind closed doors this is being seen as a backhanded benefit to all of of NZ (with the exception of Southland!). For the stated mere amount of $300 million( transmission line cost) Auckland and others will benefit from reduced power prices due to anextra 600 megawatts of supply.
It will also mean that NZ will be able to boast an almost completely green energy supply..... there is of course the irony that the lost aluminium production will be taken up by smelters in China which produce roughly 20 times more atmospheric carbon than the Tiwai Point smelter. How green is that ? Green party where are you?
Once again Southland takes the hit. Shane Jones , where are you? What about the regions?
First our very well run Southland Institute of Technology and now this.
I expect the next thing we will see is giant machines arriving to dig up our very productive Southland soil and ship it to the North Island because it will be more economical up there!

They have already had a taxpayer bailout, so not again! The small domestic power user has been subsidising the smelter since it opened. Time for NZ to get some cheaper power. We are paying to much at the moment compared to overseas pricing ie Australia and the US.

And if the Govt had bowed to the overseas comglomerits bullying tactic you would still be bashing them

For:
‘‘We know the strengths of Southland and we want to build on them in areas such as agriculture, aquaculture and manufacturing,’’ Mr Robertson said.

Read: We'll butter them up a bit and throw a few million their way to keep doing more of the same. That's easy and willl keep them quiet for the meantime.

For:
‘‘There is also an opportunity to support other energy intensive projects like green hydrogen and data centres.’’

Read: I don't even know what these things mean, but they make it sound like we're onto it - and we'll never have to deliver anyway.

For:
“I also want to make clear that the Government expects Rio Tinto to will meet their obligations for clean-up of the site (an estimated $256 million) and do the right thing on the dross,” Dr Woods said.

Read: My turn to sound like I mean business, and it won't even cost anything!

Don't fall for this rubbish, Southland.

Lots of promises from this Government but we all know there will be no delivery. Shane Jones only wants to bribe Northland, Southland might get the odd crumb.
This is a fantastic chance to move NZ towards a hydrogen based future but I doubt they will have the intelligence to pursue that. We will continue to lag behind the Orkneys!

.... Yeah, nah, maybe - but how good is this shutdown going to be for the environment.

If you mean the natural environment, every shutdown's good for it.

Anyone who believes that there will be cheaper electricity is dreaming. The extra costs to transmit the power to the North Island will cost us all and anyone who says differently is either lying or stupid. Thanks again Bill Birch and think big

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