28 Aug 2020

National promises at least five years of Tiwai Pt smelter

7:28 pm on 28 August 2020

The National Party has pledged it will keep the Tiwai Point Aluminium Smelter running for at least five more years if elected in October.

Judith Collins announces Tiwai Point smelter policy in Southland.

Judith Collins announces Tiwai Point smelter policy in Southland. Photo: RNZ / Tess Brunton

The clock is already ticking down to the closure of the smelter near Bluff after owner Rio Tinto announces plans to close Rio Tinto released plans to shut it next August, ending its contract with Meridian Energy.

National Party leader Judith Collins told an enthusiastic Southland crowd she was confident a commercial deal could be reached, preventing more than 2000 job losses across the region.

Yunca Engineering has been supplying products and services to the Tiwai Point Aluminium Smelter since 1994.

It was there at its Invercargill head office that National Party leader Judith Collins unveiled her vision for the smelter.

"Our aim is to create a commercially viable result that will keep the smelter in operation for at least the next five years while preparing Southland to lessen the severity of any potential closure. We believe a commercial deal could be reached," Collins said.

"It is our understanding that the owners of the Manapouri Power Station - Meridian Energy - have offered a positive electricity price to Rio Tinto, based on Meridian's potential losses of tens of millions of dollars a year if there is a drop-dead date for closure of the smelter. Based on this, we understand that a commercial deal could be reached.

She promised a National Government would expedite negotiations between Rio Tinto, power companies and Transpower to ensure better transmission prices so the smelter could commit beyond its hard close date next August.

Her other pledges include upgrading the smelter's technology to boost available electricity, improving Southland's internet and accelerating Transpower's investment in transmission lines.

In exchange for the deal, she said Rio Tinto would need to show how it would clean up the site and deal with waste when it closed.

Judith Collins announces Tiwai Point smelter policy in Southland.

Judith Collins announces Tiwai Point smelter policy in Southland. Photo: RNZ / Tess Brunton

Deputy leader Gerry Brownlee said the company was willing to consider negotiating, but he wouldn't be pushed on financial figures.

"Know when to hold them and know when to fold them," he said.

"New Zealand Aluminium Smelter has put some numbers of the table, and we've considered those and have decided there is strong basis for negotiation."

Judith Collins said part of the negotiation would include looking how to deal with the roughly 8500 tonnes of potentially toxic waste created by the smelter that has been sitting in a disused Mataura paper mill for years.

When asked if there was a fallback plan, she said there was - but she was not going to reveal it.

Instead Collins said she was focused on getting to work on negotiations straight away - if elected.

Gore District Mayor Tracy Hicks said losing the smelter would be a devastating blow to Southland.

National's plan was a positive step forward and recognised high transmission costs as one of the key barriers in negotiations, he said.

"It's really going to take a strong government to intervene. They've given a signal today that they want to do that.

"I wish them well. It's been a challenge for many years with a variety of governments and we haven't really got a lot of progress. So I've got high hopes, but we also got a commitment today that they would intervene in other ways if that was going to take longer than originally planned."

Tracy Hicks believed a partnership between the government and the regions would be key.

Invercargill City Mayor Sir Tim Shadbolt was also pleased with the pledge.

"It's challenging, but it always has been when it comes to negotiations between the smelter and the electricity company," he said.

Invercargill City mayor Sir Tim Shadbolt.

Invercargill City mayor Sir Tim Shadbolt. Photo: RNZ / Tess Brunton

"But this is a great time. People are positive now, they're looking for new projects they can possibly get behind and this will certainly benefit from any support they can possibly get."

Halting the closure would give Southland more time to kickstart other industries, he said.

"We realise that the smelter will not last forever. But we don't want money, we don't want subsidies. We don't want any of that. We just want fair pricing."

Southland's leaders were not putting their eggs in one basket however, saying they were keen to hear from each political party about their plans for the smelter.

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