Losing hope on smelter

There is no way Southland could develop a "sizeable industry" in one year to counteract the effects of the Tiwai Point smelter’s closure, regional leaders say.

They are begging, again, for Government intervention to extend the proposed 12-month closure date.

Pleas have so far gone unanswered.

Energy industry executives are also losing confidence a deal to extend the winding down of the smelter can be achieved.

Power supplier Meridian Energy has been in talks with smelter owner Rio Tinto to try to extend the scheduled closure beyond August 2021.

But negative comments from Energy and Resources Minister Megan Woods and Climate Change Minister James Shaw this week suggested no government interest in assisting the smelter with the stand-alone transmission charges it has been seeking since 2013.

Meridian said yesterday, its view was that the smelter would shut on August 31 next year.

The company was not aware of a report yesterday Rio Tinto was considering restarting a small production line it shut in April as part of its Covid-19 response.

Nor had it had any response to the ramp-down option it offered.

"We have gone back to the smelter owners with a compelling staged exit option that we believe would support the smelter to leave in a more orderly fashion.

"To date we haven’t had any indication from Rio Tinto on whether this is an offer they can work with," corporate affairs general manager Claire Shaw said.

Asked if there was anything Southland could do if its five-year extension bid failed, Southland Chamber of Commerce president Neil McAra replied "almost zero".

Mr McAra and Great South chief executive Graham Budd said five years was required to create alternative industries to cushion what would be a $400million blow to the Southland economy.

"Things like hydrogen fuel have been talked about, big data centres, aquaculture, ... but all of those take a lot of time.

"We will have a significant and serious negative impact in our community ... if it literally closes in 14 months."

Mr Budd said the risk of Tiwai’s closure had been part of the thinking during planning of regional development strategies, but none had expected such a drastic decision so soon.

"I don’t think we’ve been underprepared. I think we were in process to prepare for it."

The Government needed to intervene in the negotiations between Meridian and Rio Tinto to keep almost 2500 jobs in the region, they said.

Mr Shaw told industry executives on Monday that while he would have preferred the smelter to remain open, Rio Tinto had "won every concession going" on power costs and transmission yet had still opted for closure.

"I just don’t think it’s viable. Let’s do something else with the electricity," he said on a panel discussion in Wellington.

Dr Woods was similarly dismissive, arguing the Government had a responsibility to help Southland develop businesses that had more of a long-term future than the smelter.

Mr Budd said he had been pushing for a response before the election from Prime Minister Jacinda Ardern on the five-year transition, but believed it was unlikely.

This week, Southland Mayoral Forum chairman, Gore Mayor Tracy Hicks wrote to Ms Ardern requesting an urgent meeting.

The Prime Minister’s office did not respond to specific questions from the ODT.

It was reported yesterday Rio Tinto would announce its final decision on the future of the smelter in four to six weeks.

 — Additional reporting BusinessDesk/The New Zealand Herald

Comments

Big industries in small cities ar a recipe for undue and unhealthy commercial influence and ultimatly local despair.

Why hasn't a contingency plan been developed already, after all Rio Tinto has been threatening this for years? What have the council and business community been doing all this time , other than praying it wouldn't happen?
If it is that important and viable how about instead of running to the government for tax monies, they form a collective of affected businesses , employees , Southland business people and put their own money where their mouths are and buy the smelter . After all that's the free market way , but that ideology seems to go out the window when it's not to the business world advantage .

Unless you have been living under a rock, or maybe in the North Island, it has been on the cards for years that the smelter would be closing.
Why has there not been some work on a replacement plan?
It's a bit late now to be running around like headless chooks wailing away saying "oh woe is us. What can we do". Get your heads out of the sand and make it happen

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