Dire warning by smelter owner

Emissions scheme could force closure

JOHN HAWKINS/ID 17918

FUTURE IN JEOPARDY? An aerial view of the Tiwai aluminium smelter near Bluff.

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Rio Tinto Alcan yesterday threatened to close its Tiwai Point aluminium smelter if the Government's emission trading scheme goes ahead.

In its submission to the select committee yesterday, Rio Tinto Alcan, which owns nearly 80 percent of the Tiwai Point smelter near Bluff, claimed introducing an emissions trading scheme ahead of other countries which have competing smelters, would put aluminium production at risk and could even result in it being moved offshore.

Production could occur in countries not bound by climate control protocols where energy is mainly coal or gas-based, meaning further increases in global greenhouse gas emissions.

New Zealand Aluminium Smelters general manager Paul Hemburrow said the smelter's closure would be on the cards if the scheme proceeded.

"What we are saying is that if the (emissions) bill proceeds as it's currently written it is likely to put us on the pathway to closure," Mr Hemburrow said.

He said the select committee showed a genuine interest and understanding of the company's concerns.

However, Climate Change Minister David Parker said the Government had already moved to address concerns raised by Rio Tinto Alcan.

"Rio Tinto Alcan talked about competitiveness-at-risk issues with the emissions trading scheme as currently drafted. As is well known, the Government is now proposing to delay the phase-out of free allocation to trade-exposed industry to 2019, thus largely shielding those industries from such competition until then." Southland business leaders and smelter workers reacted strongly to the possibility the smelter could be closed.

Tiwai workers said Invercargill and Southland would be crippled if Tiwai's future was jeopardised by the scheme.

Engineering company Walker Group Ltd chief executive Bill Walker said 50 percent of his turnover was linked to Tiwai and if it closed 110 staff would be affected.

He questioned the Government's decision to make country a leader on cutting carbon emissions.

"... We have a choice of when to implement this. Why are they making us a leader on this when it will cost jobs?" Engineering firm JK Stevenson Ltd general manager Aiann Cairns said if the smelter closed it would "obviously have a big impact" on the economy.

Invercargill Mayor Tim Shadbolt was devastated by the news Tiwai's future was at risk, saying he was appalled by the situation. "It would absolutely cripple us as a city." The scheme was pointless because New Zealand produced a very small percentage of the world's total carbon emissions.

"Even if we closed down the whole country tomorrow it wouldn't make the slightest bit of difference to global warming ... I think the restrictive regime they're trying to produce is only going to hurt us -- cripple us as a local economy and make no difference to the world situation anyway." Mr Shadbolt said he was prepared to lobby the Government on the issue and would discuss options with councillors at a workshop today.

Mr Shadbolt said Tiwai was the best smelter in the world and gave Southland a lot of prestige. It also gave back hugely to the community.

"They're a good corporate citizen." Invercargill MP Eric Roy agreed the scheme was impractical. "I just hope that the Government can step away from its ideological platitudes to actually listening to what the business community are saying about this." The National MP added Southland's economy would be devastated.

"It would halve the price of housing in Invercargill for a start." Mr Roy was pretty "green" himself but said the scheme angered him.

- © Fairfax NZ News