The closure of Tiwai Point’s aluminium smelter, affecting 1000 employees, is expected to hit Southland hard, with the region already struggling to get to its feet after the February floods, the COVID-19 pandemic shut down and the loss of international tourism.

Invercargill mayor Sir Tim Shadbolt told Radio New Zealand this morning his first concern was for the workers.

Things were “looking pretty bleak at the moment’’, Sir Tim said. He also said he was committed to considering all options to assist workers.

Invercargill-based Labour list MP Liz Craig said today she was “devastated” to learn the Australian mining giant Rio Tinto would be closing the NZ Aluminium Smelter next year.

“My thoughts are with all of the workers, families and businesses affected,” Dr Craig said. 

“This will have a huge impact, not only for those directly and indirectly employed by NZAS, but for the Southland economy as a whole.’’

Southland faces a forecast 5000 job losses relating to the Covid-19 pandemic, according to a report by independent Wellington economic consultant company Infometrics, which was presented to the Southland District Council in June.

An interim report by Great South has also revealed Fiordland has suffered a 55% downturn because of Covid-19, and 33% of the mainly tourism-based workforce has been laid off.

Dr Craig said she had spoken with Prime Minister Jacinda Ardern this morning about the impact the closure would have on Southland.

“I am pleased that [Finance Minister] Grant Robertson has already signaled the Government will support the Southland community in our transition, in areas such as agriculture, aquaculture and manufacturing. 

“I have also invited Jacinda and Grant to visit us in Invercargill to discuss how the Government might help us support those affected, grow local jobs and create a sustainable future for the Southland economy.

“In coming days and weeks, I will be talking with others in our community, about what assistance we might request from the Government in this respect,” Dr Craig said.

Rio Tinto announced this morning it would begin winding down its operations at the Bluff smelter and would cease operating next year.

It will terminate its electricity supply agreements with Meridian Energy in August 2021. The power scheme provides electricity to the smelter.

Great South chief executive Graham Budd was meeting with New Zealand Aluminium Smelter representatives this morning and was unavailable for comment. 

Great South is the Southland regional development agency and supported by the region’s territorial authorities.

The Southland App is seeking statements from Mr Budd and the region’s district mayors as soon as they are available.

The New Zealand Aluminium Smelter at Tiwai Point, Bluff.

NZAS is a joint venture between Rio Tinto (79.36%) and Sumitomo Chemical Company Limited (20.64%). 

It employs around 1000 people directly and creates a further 1600 indirect jobs in Southland.

The company conducted a strategic review of the smelter after it made an underlying loss of NZ$46 million in 2019.

Rio Tinto representatives warned Energy Minister Megan Woods and Finance Minister Grant Robertson last year that the smelter was at risk of closing.

Some organisations view the closure as a good thing for the nation.

Greenpeace executive director Dr Russel Norman said today that today’s Tiwai Point closure announcement would result in cheaper electricity for New Zealand households and the chance to swiftly decarbonise transport and industry.

Rio Tinto’s smelter uses 13 percent of New Zealand’s electricity and Dr Norman said the Tiwai closure would release a huge amount of low-carbon and affordable power back onto the grid.

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Tiwai aluminium smelter to close next year

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