Around 2 600 jobs at stake as giant NZ smelter announces closure

One of New Zealand’s biggest single-site employers is to close on the South Island next year, resulting in the loss of more than 1 000 direct jobs and another 1 600 indirect jobs.

The Rio Tinto-owned New Zealand Aluminium Smelters (NZAS) plant at Tiwai Point will cease operating in August 2021 after a strategic business review found it to be unviable.

The facility, which consumes 13% of the country’s entire power output has long been regarded as marginal and only able to operate as a result of government support.

Closure comes as a shock to the Southland region

Nevertheless, the closure comes as a shock to the country and particularly to the Southland region, which is the southernmost part of the country around the city of Invercargill.

The smelter is a significant employer and in some cases generations of locals have been employed there since it opened in 1971– some have 40 years of service and other family members who have been there for 20 years.

Local mayor says he is ‘just absolutely shattered’

Invercargill Mayor Sir Tim Shadbolt told the news website Stuff that he was “just absolutely shattered”.

He added: ”Not just because of the jobs; that’s the worst scenario. But it’s the families, schools and small businesses that are dependent on the smelter.”

According to local estimates, there are 1 600 jobs indirectly connected to the smelter also under threat from the planned closure.

Plant consumes 13% of all electricity generated in NZ

The Guardian Australia newspaper reports that the smelter uses alumina from refineries in Queensland and Western Australia, and exports 90% of its product.

It is also New Zealand’s biggest consumer of electricity, using roughly 13% of the country’s power, and one of the country’s biggest single-site employers.

NZAS recorded a loss of $NZ46million ($A43-million) last year. The New Zealand government is already on record as saying that the real reason for closure is that the plant failed to secure more electricity subsidies.

Rio Tinto Aluminium’s chief executive, Alf Barrios, did not disagree. “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,” he said in a statement.