4 Aug 2021

Tiwai Point: Latest document release reveals government concerns about Rio Tinto

6:41 pm on 4 August 2021

Newly released documents show officials believed Rio Tinto wanted to sideline the clean-up of Tiwai Point aluminium smelter.

Tiwai Point

Tiwai Point aluminium smelter. Photo: RNZ / Nate McKinnon

The government made a multimillion-dollar offer to the multinational last December to advance the clean-up, but in March pulled the plug on negotiations.

The OIA documents show Rio Tinto did not think the offer was high enough. Just how much was offered by Finance Minister Grant Robertson is redacted from documents.

"In relation to the proposed Crown payment, Rio Tinto indicated that the ... payment was too low in quantum," a Treasury email in January this year says.

At the same time, it said the company had rejected a request to provide a financial guarantee over the clean-up.

Earlier, last October, Treasury told Robertson Rio Tinto appeared to be seeking multiple meetings with him and others to "circumvent" the Treasury-led negotiating team and strategy.

"We assess that Rio Tinto is engaging in these meetings as a tactic to try and undermine the Crown's holistic approach and will attempt to remove environmental site remediation from the negotiating table," it told Robertson.

Rio Tinto, after a change of leadership, told the government in May that it would "fully realign" its efforts to address the government's concerns.

It said in a statement to RNZ this week it was committed to removing various lots of smelter waste.

That includes the most toxic,217,000 tonnes of spent cell liner waste (SCL) that it has been estimated would cost at least $1000 per tonne to dispose of.

However, OIA documents showed that was not the case in January.

"In short, Rio Tinto would not make any remediation commitments," officials told Robertson, after a call to test the company's willingness.

It was "not prepared to commit to removal of SCL without an in-country pathway in place".

"They noted that there were no immediate options for establishing such a pathway. Rio Tinto discounted the option of exporting SCL to meet such a commitment, and stated that they now face more limited access to global processing facilities."

Several months later, in May, Rio Tinto gave the prime minister a blanket commitment "to remove all SCL from the Tiwai peninsula at closure" - without saying where to or how.

Questions remain, too, about the extent of any clean-up.

In October, Treasury advised that while the company had repeatedly said it would return the site "to natural landforms", it had not provided enough detail to show what that meant.

In January, the government's request that the company excavate the smelter's landfill was rejected; this had been set in December 2020 as one of five environmental conditions if New Zealand Aluminium Smelters accepted the Transmission Transition payment offer.

Rio Tinto has still not said what it intends to do about the landfill.

The government has told RNZ its offer in December was not a direct subsidy, something it had vowed not to provide.

"The Crown was paying for workforce and remediation outcomes," Treasury's email said.

The giant miner is an 80 percent partner in the smelter with Sumitomo Group of Japan.

In January, Treasury said the two partners "are not willing to entertain any guarantee or financial surety" to back up the smelter company's financial provision of about $300m for a clean-up.

By May, however, the heat was dissipating on the back of a meeting between Rio Tinto's new chief executive Jakob Stausholm, installed only in January, and Prime Minister Jacinda Ardern.

Late last year the company's leadership resigned over blowing up 46,000-year-old caves in Western Australia.

The company's letter to Ardern outlined seven commitments made that month to the clean-up, on top of an earlier half-dozen commitments, including paying all the costs to get rid of waste in Mataura.

It also promised to bring in new technology by the end of the year it said would "significantly reduce cyanide emissions to the coastal marine environment".

The SCL pile leaked cyanide into groundwater in the 1990s, and even after leachate from it is treated, it still has cyanide in it when it is discharged, legally, into Foveaux Strait.

"I will continue to closely monitor progress in New Zealand to ensure that we fully re-align the efforts and engagement to address your concerns," Stausholm wrote to Ardern.

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