9 Mar 2013

Mighty River investments 'less risky'

2:40 pm on 9 March 2013

Prime Minister John Key says state-owned Mighty River Power's large investments in geothermal exploration in Chile are not as risky as investments made by troubled firm Solid Energy.

Mr Key is in Chile on Saturday on the latest stop in a 10-day trip through Latin America with a business delegation that includes a representative of Mighty River Power.

The electricity company has invested about a quarter of a billion dollars in geothermal exploration at two sites in Chile over the past five years.

Mr Key said there are always risks with such a project, but the power company is applying the same skills they have in New Zealand in a different location.

In comparison, he said, state-owned Solid Energy had been making investments in different products, such as wood pellets and lignite, much of which involved technology that was not well developed.

Mighty River Power general manager of development Mark Trigg said it is no more costly to do its work in Chile than in New Zealand, and the process is the same.

"The major cost is in drilling so depending on how you are able to contract drilling resources, the cost of development to this particular point in time is not dissimilar to New Zealand."

Both Mighty River Power and Solid Energy were tagged for partial sale but the mining company's float was put on hold after it hit financial trouble.

The Government expects shares in Mighty River Power to be listed on the New Zealand and Australian stock exchanges in time for the Budget on 16 May.

PM rebuffs criticism of TPP deal

Mr Key earlier told a business audience in Chile there is no economic evidence to suggest free trade deals like the Trans Pacific Partnership (TPP) cost jobs and are a bad idea.

Chile and New Zealand are both involved in the TPP negotiations, along with nine other Pacific Rim countries.

At a business forum in the capital Santiago, Mr Key said there would always be those who publicly criticise such agreements, but there is no basis to their arguments.

"Even in New Zealand where we have been pro-trade for, now, the better part of 25 or 30 years, we still get people who are opposed to TPP or opposed to bilateral deals. There is no economic evidence to support those facts at all, anywhere."

He said he believes the TPP will be successful because the United States needs to boost its exports so it can deal with its enormous debt.