Minister won’t say if deal reached on Tiwai discount
The Government and Rio Tinto are declining to say if they have already reached an understanding on a discount that the Tiwai Point aluminium smelter would receive from Transpower were Labour to be re-elected.
Labour leader Jacinda Ardern said on Monday that the party would seek a deal with Rio Tinto to keep the smelter open for a further three to five years if Labour won the election.
Rio Tinto has previously argued its annual bill should be roughly halved from $60 million a year to $28m.
Asked whether the Government and Rio Tinto had settled on the size of the discount, Energy Minister Megan Woods stated in an email that the Government had been discussing options with the Southland community and Rio Tinto about ‘‘a managed exit plan’’. Woods declined to elaborate when asked again whether an
understanding on the discount itself had been reached.
A Rio Tinto spokeswoman also declined to say whether a discount had been settled on.
In a sign a deal may be in the bag, Rio Tinto would not comment on whether it was preparing to reopen its smallest, fourth potline, mothballed during coronavirus restrictions in April.
That is a change from August when it said it had ‘‘no current plans’’ to restart the potline.
Environment Minister David Parker revealed that – contrary to common assumptions – there is no bespoke agreement between Rio Tinto and the Crown about how the smelter site should be remediated after it is decom
missioned. Instead, all the smelter’s obligations are set out in national and local environmental legislation, he indicated.
In addition to an expected discount from Transpower, Rio Tinto is believed to have been separately offered a reduction from Meridian Energy in the price the smelter pays for power.
It is believed to pay Meridian about 5 cents a kilowatt an hour for power from the Manapouri hydro scheme but had been seeking to reduce that by a third.
Labour has indicated that any drop in the smelter’s bill from Transpower would be accounted for by reducing Transpower’s $165m annual dividend to the Crown.