NZ: Bluff Aluminium Smelter

Showdown over smelter 

power prices 

The Engineering, Printing and Manufacturing Union says employees at the Tiwai Point aluminium smelter have been told that Meridian Energy has walked away from negotiations for a new power price deal.

Radio New Zealand,

6 October, 2012

That leaves the smelter facing a power price rise under a contract already signed. Parent company Rio Tinto has already said it will close non profitable operations.

EPMU organiser Trevor Hobbs, who was at the smelter on Thursday, said management were being advised then that Meridian had walked out of the power price negotiations.

However, the State Owned Enterprises Minister Tony Ryall says he's been advised that Meridian has not walked away from the discussions.

The workforce at Tiwai Point is already facing 100 redundancies.

In a statement, the company said it is still talking with its stakeholders and has held staff briefings. it said on Friday the nature of the talks is confidential and they are ongoing.

Labour MP David Cunliffe, who visited the site on Friday, says the Government has an obligation to Southland to ensure state-owned Meridian negotiates in good faith.

Mr Cunliffe he has been told by reliable sources that Meridian walked out of talks on Thursday.

He said the combination of Meridian playing hardball and the high exchange rate for the New Zealand, could drive the smelter to the brink.

Mr Cunliffe said he does not believe the Government should write a cheque to the smelter's owners, but it should make sure Meridian has more meaningful talks with the company that it has been able to so far.

One hundred jobs are already going from the plant and Mr Cunliffe said more than 650 more employees would lose their jobs if it closes.

Contract change wanted

 

On 9 August this year, Meridian Energy said the owner of the smelter wanted to change the terms of a new power contract, due to start in January 2013.

New Zealand Aluminium Smelters said on 5 September that renegotiating its contract with Meridian Energy was now crucial.

The Tiwai Point smelter began operating in 1971 and employs about 700 people. According to the company's website, New Zealand Aluminium Smelters is 79.36% owned by Pacific Aluminium and 20.64% owned by the Sumitomo Chemical Company of Japan.

Falling aluminium prices worldwide and high energy costs forced the company to reduce output by 15% earlier this year. In the last financial year, the Tiwai smelter lost $20 million.