Friday, 28 August 2020

The positive, practical solution for Tiwai Point

“Reports that Rio Tinto is open to delaying the closure of the Tiwai Point aluminium smelter opens the door for the next government to take a positive, practical approach on the issue,” says ACT Leader David Seymour.

“ACT has a solution that will save Tiwai Point, but cost the taxpayer nothing.

“The fundamental issue is that Tiwai’s costs – electricity, bauxite, and labour – are too high given the current price of aluminium.

“Tiwai can’t control the price of bauxite and it’s trying to save workers’ livelihoods. We need to bring down electricity transmission costs. There is a real, common sense solution for doing so.

“The Electricity Code contains a ‘prudent discount’ provision. If a customer can realistically get cheaper transmission pricing outside of Transpower’s network, Transpower should give it a ‘prudent discount’. In theory, New Zealand’s Aluminium Smelter could build its own line from Manapouri to Tiwai, invoking the provision. But the RMA means this alternative is not viable and the prudent discount can’t be invoked.

“The Government should legislate that a transmission line is consented between Manapouri and Tiwai. It is not going to build it, but Transpower will have to give NZAS a discount on transmission. This manoeuvre could make the smelter viable.

“For three years, the Labour Government has made it much more difficult and costly for businesses like Tiwai Point to be productive. Heavy industry is being hollowed out by a hostile government that continues to put new costs and regulations on productive Kiwis.”