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Several workers have lost their jobs after the recycling plant at the Tiwai Point aluminium smelter closed suddenly on Tuesday.
The multimillion-dollar plant, which opened in 2011, was owned and operated by Bahrain company Taha Asia Pacific, which was put into liquidation at 8.55am on Tuesday.
Liquidator Rhys Cain, of Ernst and Young, said yesterday the liquidation meant all employment contracts were terminated. He declined to say how many people were affected.
"Staff have been notified, and we are working hard to ensure they get their entitlements.''
It is understood fewer than 20 people worked at the plant, which extracted aluminium from smelter dross and sent it back to the smelter for reprocessing.
Mr Cain said the liquidation was the result of a special resolution passed by the sole shareholder, Frank Pollman, who has a Bahrain address.
The other director, Maurice Shaw, of Invercargill, died in June after battling cancer.
Mr Cain said he had no comment to make yet on Taha's financial state.
He and co-liquidator Rees Logan had five days to prepare a report for release on Tuesday.
"There are a number of people and parties affected by the liquidation. We are only 36 hours on, and there is a lot of information for us to come to grips with and a lot of people to talk to.''
New Zealand Aluminium Smelters (NZAS) general manager Gretta Stephens confirmed the liquidation.
"NZAS is working with the liquidators to achieve the best possible solution for Taha's former employees and NZAS,'' she said yesterday.
Once the aluminium is recycled at the dross plant, the remaining material is known as Ouvea premix.
Taha and its offshoot company, Taha Fertilizer Industries Ltd, have been storing Ouvea premix in various places, including part of the former Matarua paper mill, and had plans to build a fertiliser factory near Invercargill.
In September last year, a sale and purchase agreement was entered into with the Invercargill City Council (ICC) to buy 1ha of land within Awarua Industrial Park and develop the site.
Two months later, Taha purchased Healthy Soils, which produces solid and liquid fertilisers from a leased factory in Dukes Rd, near Mosgiel.
It was unclear how the liquidation affected those deals.
Mr Cain said the liquidation only affected Taha Asia Pacific and he was unsure yet which arrangements had been entered into by Taha Fertilizer Industries Ltd.
ICC chief executive Richard King said yesterday he was unaware of the liquidation or its implications. He was unsure whether the sale and purchase agreement had proceeded.
Ouvea premix is classified as a hazardous material with the potential to pollute waterways. Taha and its offshoot company and its New Zealand general manager at the time were prosecuted more than once last year for storing premix in various parts of Southland without resource consent or in a dangerous manner.
Taha Asia Pacific was forced to apply for retrospective resource consent after it was discovered up to 10,000 tonnes of premix was being stored in part of the former Mataura paper mill.
Consent was granted by the Gore District Council, but only for two years, and only on payment of a $2.3 million bond.
Taha appealed the decision and the company and the council are in mediation. The bond has not been paid and the premix remains at the mill.
Gore Mayor Tracy Hicks could not be reached for comment yesterday.