Govt to support Southland economy with Tiwai Point aluminium smelter closure

“This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a blow to Southland and all those who work at the smelter,” Grant Robertson said.

The Government will support the Southland economy in the wake of multinational mining company Rio Tinto’s decision to follow through with its long signalled closure of the Tiwai Point aluminium smelter.

“This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a blow to Southland and all those who work at the smelter,” Grant Robertson said.

“The smelter supports hundreds of jobs in Southland and the Government will work with the local community to support economic development in the region to help offset this loss.

“Rio Tinto has indicated it wants to work with the Government to support the community during the wind-down of the smelter.

“As we have done in Taranaki, we will support a just transition to more job opportunities. We know the strengths of Southland and we want to build on them in areas such as agriculture, aquaculture and manufacturing. There is also an opportunity to support other energy-intensive projects like green hydrogen and data centres.

“There is a degree of inevitability to the decision, as Tiwai has been on the market since 2011, and former Prime Minister Bill English told Rio Tinto in 2013 there would be no further taxpayer money provided.

“Since the smelter opened taxpayers have been subsidising Rio Tinto to keep it open, either directly or indirectly through cheaper power, and Emissions Trading Scheme allocations of over $48 million per year. The company has made the decision not to keep operating without further subsidies.

“Rio Tinto globally has been battling decreasing aluminium prices and is facing similar issues in other countries.

“Given the challenging economic situation caused by Covid-19, it is disappointing Rio Tinto has chosen to close the smelter at this time especially given the support New Zealand has shown the company and how profitable they are global,” Grant Robertson said.

“Rio Tinto’s decision not to extend their generous power contract with Meridian will flow through to the rest of the market,” Megan Woods said.

“Eventually it will free up around 13 percent of total power generated in New Zealand which will relieve some pressure to build new generation. The increased supply will also have a positive impact on prices.

“It is disappointing that Rio Tinto is deciding to close one of the world’s lowest carbon aluminium smelters, in favour of keeping open coal plants.

“I also want to make clear that the Government expects Rio Tinto to meet their obligations for clean-up of the site (an estimated $256 million) and do the right thing on the dross,” Megan Woods said.

(With Inputs from New Zealand Government Press Release)