The aluminium smelter at Tiwai Point is restarting an unused potline as rising metal prices and a power deal have made it economic to expand production.
New Zealand Aluminium Smelter said it would fire up a fourth potline, which had been mothballed for six years.
The company said it had struck a deal with Meridian for another 50 Megawatts of electricity until the end of 2022.
The smelter's chief executive, Gretta Stephens, said restarting the potline would create another 32 jobs in Southland and boost production by 85 tonnes a day.
"It is never good to have a cold potline at a smelter as it represents a capital investment that isn't contributing to our economy and our community."
The fourth potline was built in 1996 but taken out of production in 2012 as global metal prices fell and power prices went up.
She said prices and demand for aluminium had been recovering.
"Aluminium is the fastest growing input in the automotive industry as manufacturers seek greater fuel efficiency," Ms Stephens said.
It would take about six months for the potline to become fully operational, she said.