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Tiwai Point smelter to stay open as Meridian Energy reaches deal with Rio Tinto

Newshub logo Newshub 13/01/2021 Mark Quinlivan
a view of a beach next to a body of water: Watch: Meridian Energy reached an agreement to keep the Tiwai Point aluminium smelter open. © Video - Newshub; Image - Getty Watch: Meridian Energy reached an agreement to keep the Tiwai Point aluminium smelter open.

Meridian Energy has reached a four-year agreement to keep the Tiwai Point aluminium smelter open, with multinational mining giant Rio Tinto saying the operation will be "economically viable and competitive".

Rio Tinto released a statement on Thursday confirming the deal, meaning the smelter will remain open until at least December 31, 2024.

The smelter is Southland's biggest employer, with 1000 jobs and contractors working on site. It contributes $400 million per year to the region's economy.

"We are pleased to have reached an agreement with Meridian Energy that will enable the Tiwai Point smelter to continue producing some of the lowest carbon aluminium in the world," Rio Tinto Aluminium chief executive Alf Barrios said.

The facility at the Tiwai Peninsula, across the harbour from Bluff in Southland, is New Zealand's only aluminium smelter.

Despite receiving hundreds of millions of dollars in direct and indirect Government subsidies over the years, including a $30 million bailout under former Prime Minister John Key, Rio Tinto announced plans to shut up shop last year because of high energy costs.

Tiwai Point smelter to stay open as Meridian Energy reaches deal with Rio Tinto
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The smelter was set to shut in August but Rio Tinto says the deal with Meridian means it can keep operating.

"Plans for [the] eventual closure of the Tiwai Point smelter will include extensive stakeholder consultation, including within the Southland community, and reflect the company’s robust closure and remediation standards.

"The extension provides certainty to employees, the local community, and customers while providing more time for all stakeholders to plan for the future."

Finance Minister Grant Robertson said the deal provides certainty to the Southland community.

"The Government has been focussed on helping to ensure a deal is reached which kept the smelter open for longer than the year initially proposed by Rio," he said, adding the deal would help protect jobs in Southland.

Energy Minister Megan Woods said the deal was welcome news.

"The strong relationship between the Government, local authorities and the Southland business community means we are in a good position to map out a transition plan which allows for high wage jobs to remain in Southland as the region transitions, while providing new opportunities for economic growth in the region."

Before last year's election, NZ First leader Winston Peters had pledged a 20-year agreement to keep the smelter open as the Government refused to give more bailouts. However, NZ First was ousted from Parliament at the election, getting just 2.7 percent of the vote and failing to win a seat.

"Tiwai contributes over $450 million annually to Southland and we're going to ensure that grows, not stops," Peters said in September. "If you vote for New Zealand First we will amplify your voice so that it cannot be drowned out, silenced or ignored."

National leader Judith Collins in August also called for the smelter to remain open.

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