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It was reported this week the board of Rio Tinto — which owns the Tiwai Point aluminium smelter — had vetoed a deal to move about 10,000 tonnes of ouvea from Mataura back to the smelter.
Mr Parry had struck a "handshake deal" with New Zealand Aluminium Smelters (NZAS) chief executive Stewart Hamilton, the head of a joint venture involving Rio Tinto, to shift the material by the end of June.
However, the deal was rejected this week by Rio Tinto’s board, prompting criticism from Environment Minister David Parker yesterday as he suggested legal action could follow.
Prime Minister Jacinda Ardern said Rio Tinto "needs to show some responsibility" over its failure to deal with hazardous waste.
During a visit to the Southern Field Days in Waimumu yesterday, Ms Ardern said she shared the same concerns as Southland’s mayors and Mr Parker.
The recent floods had demonstrated the risk of some of those storage solutions, she said.
"It is aluminium dross. It occurred as a result of a profitable process for a company who needs to show some responsibility in helping resolve the situation."
Environment Southland chairman Nicol Horrell confirmed his organisation was also seeking legal advice, but, in the meantime, Mr Parry said his council did not have any other plan "in the offing" to remove the material from Mataura.
That left the existing contract with NZAS, struck last year, which meant ouvea stored in Mataura would be shipped overseas over the next two years.
Australian company Inalco Processing Ltd was awarded a contract to remove the substance, and another 12,000 tonnes at other sites in Invercargill, by 2025.
Ouvea premix was made from dross, a byproduct of smelting at Tiwai Point, and used as a mineral fertiliser or a raw ingredient in manufacturing.
However, it could also produce dangerous ammonia gas when mixed with water — a risk highlighted when the Mataura River threatened to flood the old paper mill the chemical was stored in earlier this month.
Dumping the material also appeared out of the question, as there were believed to be no landfills in New Zealand capable of accepting the class six hazardous material, Dunedin City Council waste and environmental solutions group manager Chris Henderson said.
The substance was also stored at four other Southland sites — in Invercargill and near Bluff.
Invercargill City Council chief executive Clare Hadley said one of the sites was owned by the council and held about 6000 tonnes of ouvea.
The other sites were privately owned, and the council did not know "precisely how much" was stored at each, she said.
All sites were said to be watertight, Mr Parker said in response to questions yesterday.
He believed the "logical site" for ouvea remained Tiwai Point, and had sought legal advice on the smelter’s liability for accepting it.
"They are consented to take the material. They have the facilities to store it.
"Inalco are processing dross at the site already and the material originated there."
He was also "staggered" that Rio Tinto appeared to be connecting the handling of ouvea to its own wider strategic review, by saying it did not want to import any extra liability to the smelter until the review was completed next month.
Mr Parker said the company had "a history of crying wolf over their financial situation to try to wring out concessions from successive New Zealand governments".
Mr Hamilton said earlier this week NZAS had "fully co-operated" with the Gore District Council over plans to remove the material, including committing $1.75million towards the cost of doing so.