Invercargill basked in the good news yesterday that one of its major employers had struck a deal - at least for the short term - ending uncertainty for about 3200 Southland jobs.
Meridian Energy has agreed on adjusted terms to supply New Zealand Aluminium Smelters with 572MW of electricity until 2030, keeping three potlines at the Tiwai Point aluminium smelter fully operational.
The news sent a feeling of ''euphoria'' through Invercargill streets, Mayor Tim Shadbolt said.
The deal to keep the smelter going was a relief, but not a shock, he said.
About 3200 jobs in the region - 800 directly - depended on the smelter.
''Everything seems to have fallen into place,'' Mr Shadbolt said.
''All the critical factors seem to have fallen into place. Now all we can look forward to is a long-term analysis.''
A long-depressed global aluminium market, a high New Zealand dollar and uncertainty about the electricity supply had led many to question the future of the smelter, which could have instead initiated a two-year closure programme yesterday.
But Mr Shadbolt said conditions had improved dramatically for the smelting operation and the long-term future of aluminium production in the area.
Demand from the automotive and high-tech sectors was expected to increase.
The smelter contributes $525million a year to the Southland economy, or 10.5% of the region's GDP.
Food at Clifton owner Lana Padget said her shop, about 20km from the smelter, served between 15 and 20 of its workers a day.
The smelter deal would be positive for her business, but with several large employers in the area, the only food stop between Invercargill and Bluff would not have suffered substantially, she said.
Instead, staff had worried about the stress the smelter's workers were under, and about how ''they were feeling''.
''We were more worried about the Tiwai customers coming in withdrawn.''
Invercargill retailer Rob McMurdo said the potential closure of the smelter, which opened in 1971, had been a big concern for many in town.
The smelter was good for Mr McMurdo's business but the added certainty of the jobs would have a ripple effect through the community.
''It's going to put everybody at ease. It's been on everyone's minds, really.
''It's been a biggie for us.''
Engineering, Printing and Manufacturing Union Southland organiser Trevor Hobbs said while he had not spoken to any members ''on the ground'' at Tiwai Point yesterday, he had been told the announcement had ''taken a huge load off people's minds'', even if the smelter was ''not out of the woods yet''.
''I would like to think we can go through to 2030 without any need for further negotiations and everyone can just get on with life.''
NZAS retained its termination rights in the revised agreement, including a 12-month notice of termination that can be given any time from January 1, 2017.
But Mr Shadbolt said he believed the smelter would be a long-term fixture in Invercargill.
''At least now, it's out in the open,'' he said.
''Up to now it's been 'negotiations' and the parties involved have tended to keep their cards fairly close to their chests, but now there is a degree of certainty.
''You can say, 'All right, but you're only buying time,' but time can be a valuable commodity.''
As far as big employers in the area went, the smelter was ''right up there'', and as an industry ''it's absolutely vital at the moment'', the Mayor said.
However, he said that as time went on, Invercargill was becoming less dependent on a handful of major industries.
''Our economy is diversifying all the time.''
