Rio Tinto welcomes Labour pledge

Rio Tinto is welcoming the latest party promise to work out transmission costs during its wind-down period.

Pacific operations managing director Kellie Parker said it was ‘‘recognition’’ from the Labour Party the smelter had ‘‘been paying too much for transmission costs’’.

She said, in a written statement, it highlighted the value Tiwai Point had contributed to New Zealand.

She was responding to a pledge from Labour leader Jacinda Ardern during a visit to Southland yesterday.

At a meeting with Southland leaders, Ms Ardern committed, if re-elected, to keep Southland's Tiwai Point smelter on life-support for another three to five years while the Government worked to transition the region's economy.

A deal on the future of the Tiwai smelter had not yet been made because Labour was unable to agree with its coalition parties, she said.

If re-elected, the party would work to reduce the amount of money the smelter pays for electricity, but Rio Tinto would need to maintain current employment at the site, agree to work on remediation and work with the Government when it comes to the future use of the plant.

Southland Chamber of Commerce president Neil McAra said he felt more optimistic about the transition plan after the meeting and the extension would allow for more time to look at alternatives.

He wanted a quick deal to be made after the election.

Ms Ardern said the Government had been clear there would not be any further direct subsidies for Rio Tinto to continue operating the aluminium smelter but she would work with Transpower to form an agreement.

An initial $5million funding was promised to support the Just Transition work which would help develop a transitional unit in the region.

‘‘From there, working then to make sure that commercial opportunities are well supported as well.’’

However, while Rio Tinto had said it needed to have an outcome by the end of the year,

Ms Ardern would not set a timeframe.

Energy spokeswoman Megan Woods, who was also in Invercargill, said Labour would negotiate with Transpower to keep the smelter operating and prevent extra costs falling on other consumers.

A Transpower spokeswoman said it had been in regular discussion with the smelter, the Ministry of Business Innovation and Employment and the Treasury since the smelter's announcement of its strategic review.

‘‘However, Transpower is not currently party to any negotiations on transmission pricing for the smelter.

‘‘The Electricity Authority is responsible for the policy that sets transmission pricing, while Transpower implements the policy — the Transmission Pricing Methodology.’’

She expected conversations to be ongoing and could not comment on potential agreements between the Government and the smelter.

Southland Regional Leadership Forum spokesman and Gore Mayor Tracy Hicks said a decision needed to be made soon.

If there was none by December, he had no doubt Rio Tinto would move on with its plans to close next August, he said.

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