News travels pretty fast in Southland and most people seemed to know about the Tiwai Point smelter's power deal within hours.
The 40-year-old aluminium smelter at the entrance to Bluff harbour has signed a price variation to its contract with Meridian Energy, saying it will keep operating till 2030, but with a get-out clause in 2018.
Tiwai Point aluminium smelter. Photo: Wikicommons
On the streets of Invercargill, Southlanders said they were hugely relieved the smelter had finally committed to a 15-year power deal but feared it would not last the distance.
"It's the best thing in the world to happen to Invercargill. There's 800 people from here work there. It would be a hell of a thing for the economy if it was wiped," said one man.
"There was definitely a few concerns if we lost it. We've got farmers struggling with the milk solid price and that would have been another kick in the guts to Southland," said another.
The smelter at Tiwai Point accounts for 10 percent of Southland's economy, and underpins the jobs of more than 3000 people.
After several years of crisis, the 15-year deal gives the province some much-needed certainty.
But the smelter has been in crisis for so long people fear it cannot survive long-term.
"It's a good money spinner for Rio Tinto, but of course greed takes over, and if it's not making enough profit, they'll close it," said one local.
But chief executive of the Southland Chamber of Commerce, Sarah Hannan, said she was delighted with the new deal, which she said gave good medium-term certainty.
Sarah Hannah, CEO of Southland Chamber of Commerce. Photo: RNZ / Ian Telfer
Ms Hannan said nothing is certain in life and there was always risk, but she said the smelter had taken a positive step forward.
Having sorted out its power price, the smelter company has shifted its focus to power line transmission charges, which it said were too expensive.
The company said it was paying five times its share, or $50 million too much.
Ms Hannan said her chamber would back the smelter because Southland businesses should not have to pay for infrastructure on the North Island.
Trevor Hobbs, Invercargill organiser for EPMU union. Photo: RNZ / Ian Telfer
Invercargill organiser for the Engineering, Printing and Manufacturing Union (EPMU), Trevor Hobbs, was pleased with the deal too, though he wanted to know more about the clause the smelter had written in allowing it to pull out in 2018.
Mr Hobbs said in theory there should not be any more power price arguments until 2030 and that would be good for everyone.
But he said he worried the same arguments would come back in 2018 and that would not make for a good work environment.
Mr Hobbs said the all-too-regular crises about the smelter's long-term future seem to be partly real, and partly just its bargaining strategy.
