Breathing space for Tiwai

Three of the smelter’s four potlines will operate during the four-year contract. PHOTO: STEPHEN...
Tiwai Point aluminium smelter. PHOTO: STEPHEN JAQUIERY
The most famous use of the "four more years" phrase is a rather unpleasant memory for many New Zealanders. It was when mouthy Australian halfback George Gregan mocked the All Blacks during the 2003 Rugby World Cup semifinal, which the All Blacks duly lost, meaning they had to wait four more years ... for another failed attempt at the tournament.

Happily, the All Blacks would get their hands back on the trophy after ANOTHER "four more years".

Unlike Gregan’s spray, the promise of "four more years" from mining conglomerate Rio Tinto in regards to its Tiwai Point aluminium smelter is far more palatable to Tiwai workers and the wider Southland community.

Understandably, they expressed much satisfaction, happiness and relief when Rio Tinto announced on Thursday it had reached a deal with Meridian Energy to keep the smelter operating until at least the end of 2024.

It came barely six months after the company declared it would have to shut up shop this August due to "high energy costs and a challenging outlook for the aluminium industry".

Whether that was another bluff from Rio Tinto — which had previously (more than once) floated the prospect of closure, often accused of doing so in order to keep getting cheap deals on electricity from the Government — is almost moot at this point.

The four-year stay of execution means so much in terms of job security and economic stability to Southland, where about 1600 direct and indirect jobs rely on the smelter remaining in business.

Tiwai is a cornerstone of the province, and it has a sizeable impact on the whole social structure and wellbeing of the region.

Now that we know it will stay open for at least another four years, there is some breathing room to consider a couple of things.

Firstly, can the life of the smelter be extended even further?

Notably, general manager Stew Hamilton did not rule out the prospect of Tiwai staying open beyond 2024. "We still need to get a fair price for transmission to make sure we are commercially viable over the next four years," he said.

Again, that may be part of the company’s long game — negotiating, partly with the use of public pressure, better transmission terms with the Government — but again, that will not bother those whose jobs could either end or continue after 2024.

Interestingly, Forsyth Barr has indicated it believes Rio Tinto has very much won this round, that it managed to get the price it pays for power reduced by more than a third, from about 5.5 cents per kilowatt hour to about 3.5 cents per kilowatt hour.

The other big question to be addressed after this announcement is: what other avenues can be explored for Southland business prospects over the next four years, given Tiwai could still be destined for closure at that point. This was referenced by Gore Mayor and Southland Mayoral Forum chairman Tracy Hicks, who told RNZ the extension meant there was time to look at other industries.

"The one that has been talked about a lot is green hydrogen energy — we would be in a position to produce something that isn’t done anywhere else in this part of the world.

Four more years to get thinking, Southland.

Comments

'Public pressure' does not extend from above the Waitaki, if public money is involved.

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