Meridian Energy has confirmed it offered a four-year window of opportunity for the New Zealand Aluminium Smelter to continue operating at Tiwai Point, but the offer was rejected.

The smelter’s owner, Australian mining giant Rio Tinto, announced on July 9 that it would close the Tiwai Point smelter by August 31, 2021, impacting on 2600 jobs.

That created enormous stress in a region reeling from the negative economic impacts from floods in February and Covid-19 shutdowns in March and April.

Both events have seriously affected Southland’s international tourism and hospitality industries.

The smelter closure would directly affect 1000 employees, as well as another 1600 jobs in the local businesses that supply or provide support services to the smelter.

Southern leaders have secured the support of Prime Minister Jacinda Ardern, Energy Minister Megan Woods and Finance Minister Grant Robertson, for assistance in the region during the transition to closure, though details have not been announced.

Radio New Zealand reported on July 23 that Winston Peters, the leader of the Government’s coalition partner, New Zealand First, had scuppered Ms Ardern’s plans to announce a roughly $100 million support package before the September 19 election.

Labour list MP Liz Craig, of Invercargill, told the Southland App this week that a five-year transition period was preferred but any decision about a longer transition period was ultimately one for Rio Tinto.

Meridian Energy supplies electricity to the smelter and there is intense debate about how quickly that power could be made available to the national grid once Tiwai closes, and how long South Island generators might have to spill water before transmission upgrades have been completed. 

Transpower is spending more than $100 million on the transmission upgrade, which is scheduled for completion in 2023.

Meridian’s electricity supply negotiations with Rio Tinto have been confidential.

Chief executive Neal Barclay told the New Zealand Stock Exchange on Monday (August 10) that media reports had suggested a further decision on the future of the Tiwai Point aluminium smelter would be announced to its staff in the next 4-6 weeks. 

“Meridian has no knowledge in relation to any such announcement. As has been widely reported, Meridian has put a confidential proposal to [New Zealand Aluminium Smelters] with the objective of allowing NZAS to close down the smelter over a longer period of time. Meridian has proposed up to four years. To date that proposal has not been accepted and Meridian's current expectation is that the smelter will close on 31 August 2021 as previously announced,’’ Mr Barclay said.