Owners of smelter refused offer

The owners of the Tiwai Point aluminium smelter last year rejected the offer of a direct payment from the Government, documents released under the Official Information Act show.

The documents show a payment of between $15 million and $35m to the smelter was at one point being discussed by officials as an opening offer.

The payment would have been contingent on the smelter spending more than the $300m it has currently set aside to clean up the smelter site after its closure, and tied to the smelter staying open until 2024.

An offer for what the Government called the ‘‘Southland Transition Bond’’ was made in November.

But correspondence released under the OIA states the smelter’s owners, Rio Tinto and Sumitomo, rejected the proposal.

‘‘Unfortunately, Rio Tinto and Sumitoto have declined to make any substantive remediation commitments prior to the finalisation of a preliminary disclosure plan next year, and has rejected the Government’s proposal of a bond payment linked to remediation, without tabling any alternative suggestions,’’ an email from Treasury commercial performance manager Maureena van der Lem to Rio Tinto’s general manager of energy, Andrew Horvat, stated in December.

Rio Tinto has been seeking help from the Government to slash the electricity transmission fees it pays Transpower, which appears to have been its preferred form of assistance from the Government.

Ministers broke off negotiations this year after Rio Tinto accepted Meridian’s offer of cheaper electricity to keep the smelter open until at least the end of 2024. But a question mark appears to hang over the specific assurances Rio Tinto will provide to clean up the site once the smelter closes, the documents suggest, with officials expecting an offer of government assistance could be put back on the table. A Treasury report in February said it remained an ‘‘open question whether New Zealand Aluminium Smelters will ever make adequate and meaningful information available to enable the Crown to make an accurate assessment of the true extent of the remediation requirements, their likely cost, and NZAS’ minimum legal requirements’’, officials said.

‘‘Rio Tinto’s negotiating position to date has been to deny the Crown access to accurate information about the state of NZAS’ environmental remediation obligations, and to make no meaningful commitments.’’

But the longer it takes Rio Tinto to share that information, the more time the Crown has to collect information from other sources, and shorter the time over which the Government might provide financial relief to the smelter, Treasury also advised ministers.[

It was uncertain if the smelter will close in 2024, Treasury said. ‘‘By that time, it is anticipated that transmission infrastructure enhancements will significantly reduce NZAS’ bargaining power with Meridian.’’

Rio Tinto has been approached for comment.