Around 1000 workers directly employed by the smelter will be affected
Rio Tinto has announced it will start planning for the wind-down of operations and the eventual closure of New Zealand Aluminium Smelters (NZAS) following the conclusion of its strategic review.
The review found that the business is no longer viable given high energy costs and a challenging outlook for the Aluminium industry.
Rio Tinto Aluminium chief executive Alf Barrios said the company recognises the decision to wind-down operations at NZAS will have a significant impact on employees, the community and our customers.
“It is not a decision we have made lightly and without significant careful consideration,” said Barrios.
“It is very unfortunate we could not find a solution with our partners to secure a power price reduction aimed at making NZAS a financially viable business. We will therefore terminate the power contract and move to close the operation.
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“We are committed to working with our partners as we progress through detailed planning towards closure and we will do all we can together with the government to find ways to support the Southland community.”
E tū union has called for a ‘Just Transition’ for workers in the wake of Rio Tinto’s announcement it will be closing its smelter at Tiwai Point.
Around 1000 workers directly employed by the smelter will be affected, as well as at least a further estimated 1600 workers in the supply chain and local businesses.
Rio Tinto has given notice to terminate its contract with electricity supplier Meridian Energy, which ends in August 2021.
E tū Negotiation Specialist Joe Gallagher said the knock-on effect of the closure will be “huge”.
“This is a significant employer and this company is at the heart of its community. A closure will affect the entire supply chain, including other local suppliers,” said Gallagher.
“The smelter produces high grade aluminium and quality jobs for New Zealanders. It doesn’t make sense that as soon as it can’t get energy any cheaper, it abdicates responsibility for its workers.”
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Rio Tinto needs to think about the legacy it wants to leave as a company, said Gallagher.
“To be clear, the closure will have an effect on the whole of Southland.”
Gallagher added that the Government needs to consider a similar approach to that used in Taranaki with the Taranaki 2050 Roadmap, to ensure a Just Transition takes place.
“The Government should use the expertise, knowledge, and methodology that the Taranaki 2050 Roadmap partners have built in the region, but developing it at a much quicker pace for Southland with substantial investment early on.
