Goodbye and good riddance to New Zealand biggest corporate bludger

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This is very good news today with the Rio Tinto decision to close the aluminium smelter at Tiwai Point in Bluff.

This company has been using 14% of New Zealand’s total electricity production at ridiculously low prices for many decades.

A quick, back-of-an-envelope calculation shows that government electricity subsidies have been so high that the country would be better off with the smelter closed and the workers paid their full salaries for the rest of their lives. I wrote about this in a previous blog.

CAFCA (Campaign Against Foreign Control of Aotearoa) has described the Rio Tinto situation as “the textbook example of corporate welfare in New Zealand.”

Rio Tinto won the 2011 Roger Award for the worst foreign multi-national company operating in New Zealand. At the time the company was using bullying threats to close the smelter if the Emissions Trading Scheme came into force. The judges’ report at the time concluded the company had a 50-year history of “suborning, blackmailing and conning successive New Zealand governments into paying massive subsidies on the smelter’s electricity; dodging tax, and running a brilliantly effective PR machine to present a friendly, socially responsible and thoroughly green-washed face to the media and the public.”

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The government’s role now must be to pour those tens of millions in electricity subsidies into sustainable, environmentally friendly job creation opportunities in Southland rather than pour them into the pockets of a bloated, polluting, climate-denying multinational.

We shouldn’t hold our breath though. What we will now see is a public relations campaign by the smelter to pressure the government to lower electricity prices further for this corporate bludger. Already Tim Shadbolt and the local business organisations are whinging on behalf of Rio Tinto rather than on behalf of the New Zealand taxpayer.

Expect to hear plenty of self-serving drivel from the deep south in the year to come.

52 COMMENTS

  1. Would this be a different outcome if this plant was located in a marginal or Labour electorate – methinks yes

    • If Key ,English or Muller were still in charge, then yes the result would have been different. Millions more down the proverbial gutter. But National has always been supportive of corporate beneficiaries. You thinks lopsided!

    • Absolutely. Rio Tinto would never have gotten a $30 million taxpayer-funded subsidy if the smelter wasn’t in the heart of “Double Dipton” Bill English’s electorate.

      • That’s not true, National would have bent the knee regardless.
        I strongly suspect that Labour would have done so too.

        This is not about left or right, it is about an insidious culture of corporate welfare that pervades the entire political spectrum.

        • Agreed. We have seen it many times

          Grant Robinson just gave 31 billion to the banks and past like gestures have shown that less then 8 pe5rcent of that sum will get into circulation on the streets as most of it will disappear into the financial sector raising prices in investment stock
          Notice how the stock market has blossomed. More corporate greed in our time of hardship with Covid19.

  2. Right on John! Fork tongue seemore has tweeted it’s all Labour’s fault. He obviously can’t see the irony in an Act full time trough gobler calling for subsidies for big business.

    • So the question is what will Muller and Seemore actually do to support Southland? Anything anything at all? Or will we get the constant sound of barking. Tell me again what has Seymour actually achieved in his time in parliament?

  3. That is a very superficial analysis of the value of the Tiwai Point smelter. So let’s examine the consequences of this in a little more detail:

    1. Over a thousand jobs lost
    2. Maybe twice that lost in the region because the smelter isn’t spending anymore and neither are their staff.
    3. Loss of tax revenue from the smelter, its employees and from the region.
    4. A significant black mark on our balance of payments because the refined alloy was high value.
    5. A loss in profit for the Manapouri tunnel owners – Meridian Energy – with a consequential loss in revenue to shareholders including the government. That’s less money for education and welfare.
    6. Higher power prices because the lines fees being paid by the smelter will be transferred by Transpower on to the rest of us. Did you know the arbitrary line fees applied to the smelter would have paid for a new line built every year? Higher power prices will drive even more jobs away from NZ.
    7. The power of the Manapouri tunnel cannot as yet be put into the national grid because we don’t have the lines available to carry the load.
    8. A massive loss in valuable skills – I would bet that a fair slice of those losing their jobs will move to sunnier climes across the Tasman where heavy industry is still valued.
    9. Some depressing GDP numbers to come!

    It’s a black day for New Zealand.

    • What tax revenue were you thinking of Andrew? Didn’t RioTinto say they were making a huge loss on the smelter? And how do you think the workers will get across to Oz? Anyway, we’ll need all that Meridian power to charge the Teslas.

    • Across the ditch they burn more coal.
      GDP is not a useful measure of anything and certainly not a barometer of public good.
      Meridian as a corporate will not let power priced to home drop no mater what.

      • Meridian as a corporate will not let power priced to home drop

        And so, the brakes are being put on including solar panels as an essential part of all new homes being built. (For shame!)

        • Those who install solar arrays and try to sell their excess power back to the grid get vitally a pittance for it.
          All the power suppliers have closed ranks on this one where some countries over seas pay above the consumer rate as not new infrastucture is needed for them to circulate this power to nearby homes where they gain line charges.

  4. It’s not as if this came as a surprised. Rio do this on a regular basis.
    If your calcs are correct John, I agree with your better ideas over mine that I’ve previously expressed.

  5. They are not the only corporate bludgers with their hands out and they won’t be the last there are still many at the trough. In the meantime our addiction services get a measly 35 million. Where is the money from crime proceeds going. If it is from the sales and profiting of drugs a big chunk of it it should be going towards addictions.

  6. They are not the only corporate bludgers with their hands out and they won’t be the last there are still many at the trough. In the meantime our addiction services get a measly 35 million. Where is the money from crime proceeds going. If it is from the sales and profiting of drugs a big chunk of it it should be going towards addictions.

  7. About time, it’s a blow for the people Southland but it should be feasible to use some of the 14% of the countries power to be used in the Southland area. National when in power made vague statements about the smelter and Labour inherited the mess. Time to diversify into projects for today and not yesterday.

  8. Certainly Rio Tinto was taking advantage of Lake Manapouri to cook at the expense of us all. Particularly once the cadre of swine that is the neoliberal plaything, meridian, was sewn into the hem of tinto’s skirts.
    But the real and true bludger is Auckland and its corporate crooks.
    Other than dipping into the income stream coming in having been derived from exports of primary industry goods, ie agrarian goods, what, does Auckland, in fact, do?
    Auckland’s been sucking up South Island electricity for many years, Auckland’s hatched some of the most reprehensible fellows I can think of. Auckland’s sucked up the young then dropped them into debt thus enslaving them while the rest of the country, and in particular Invercargill barely survives surrounded by some of the richest farm lands left anywhere in the world.
    Auckland, or rather the dodgy architects of Auckland are the problem that the rest of us must shoulder. Or not. We could just drop Auckland from the scene.
    Or shall we stop farming and Auckland can support us all?
    There’s a lot of support for the Tiwai smelter in Bluff and Invercargill. It’s been employing people for quite some time now whereas AO/NZ didn’t give a fuck about Southland when times got tough after the infamous stunted runt douglas fucked us over. Southlanders were forgotten and again, I’d like to thank Tim Shadbolt for his tremendous energy in reanimating a dying town.

    • The People’s Republic of Invercargill, determined to be self-reliant after losing 10 % of its population in the 90s. The council bought or tried to buy a power company in Dunedin if I remember rightly from my time there in the early 00s. Forestry blocks? And the liquor trust. The lesson of the 1984 opening up — or being abandoned — for them was aggressive socialism.

  9. Spot on John!

    The smelter has no part in the future of NZ, despite the whining and whinging of the likes of Tim Shadbolt.

    It’s not as though we have been processing a local material in an added value process.

    As I wrote on the other thread dedicated to this topic:

    ‘The reason the smelter was built in NZ was because Australia lacked (and still lacks, of course) the hydro systems that supposedly generate cheap electricity…if you don’t count the emissions commensurate with construction, the loss of land and the slow filling up behind the dam, which increases methane emissions and eventually renders the dam unless the sediment is dredged out.

    So many false assumptions.’

    (Plus the seven other reasons I listed as to why aluminium smelting in NZ is extemely environmentally damaging and unsustainable. =not that it is sustainable ANYWHERE in the long term)

    You put it so well, John -‘Expect to hear plenty of self-serving drivel from the deep south in the year to come.’

    • That Zombie-Corp gets you the stuff that makes your fancy laptop and the cables that you use to post comments here. And the shiny stuff that you wear around your neck and on your hand and your wrist. And the stuff that you put into your car…oh you don’t have a car?? Sorry.
      Typical bloody NYMBIE! Wants all the trappings of modern tech and then disses the people that provide it. Luckily NZ wasn’t built by your type. We’d still be oxen and carts.
      Clearly you didn’t have a job down there that you’re about to lose.

      • Oxen and wooden carts.
        Now your talking sense possibly without realising it.
        Low GHG emissions and bred / built by local industry.
        Just what we need.
        Recently Cuba returned to oxen to plow and carry, when the oil supply was cut.
        But we need to train oxen and people who know how to do that to train others.

      • Hermie, You’ve read me very wrong. Some of the best years of childhood were at Kaimaumau, near Waiharara, with no electricity, no nothin’ much. We grew what we ate, and got some from the sea – Smoke house for the fish, right on the beach, was the best ever. Our after school baths relied on an oversized jam pan warmed in the sun. Kero lamps and candles, and the wonderful old wood stove. (Later, at Ahipara, we had minimal power..)

        And then there were the years with my own kids. Again, eschewed electricity and lived inaccessibly for periods of time – We all were healthier then than they had ever been before.

        Now, I do appreciate electricity, and especially the internet, but there are far ‘greener’ ways to produce it than we all have been doing.

        • 100%.
          A simple live is more efficient on natural resources and the world need less of the technological catastrophes we call progress.
          Sure some things are nice but at what cost to future generations.
          We are taught to be consumers and disregard the world we live in and many other who are paying the price of our Western nihilism towards reality. .

      • Clearly you didn’t have a job down there that you’re about to lose.

        See my other comments on re-purposing the smelter to tackle NZ’s toxic waste problem. Would probably employ even more people than they’re doing now!

        And about some of that toxic waste: Mataura Locals Unnerved on Waste Removal

        The closure of Tiwai Point aluminium smelter has raised concerns over what it will mean for the thousands of tonnes of potentially toxic waste stored in the small Southland town of Mataura. (my bold)

  10. I would prefer if the smelter stayed for the sake of all the people whose livelihoods it depends on.
    However, NOT at the expense of continuing to susidise their energy costs..
    I have no problem with Meridian receiving a very substantial volume based discount. But their pricing for energy goes well beyond that.

  11. If the land that the smelter is sited on is not 100% NZ owned, then that needs to be rectified. Either we bite the bullet and purchase it, or we enact a law to ensure that at the point of such sales, the land returns to NZ. Any company wishing to buy it in the future needs to be 100% NZ owned. O/S entities might lease, only, and for clear and reasonable lengths of time.

    The land is the body of Aotearoa. We, the transient humans who are here now, have no right to sell off pieces of this body of land, this tiny survival raft that we inhabit. We have a responsibility towards the land, a duty of care. Yet so often this has been abused. Now is a time when we have the possibility of changing course to a better way of being.

  12. The trick now is to introduce a bill to force Rio Tinto to leave the land as if the factory had never been there. Then when they complain offer to buy the plant off them for $1 and reopen it as a nationalised plant. Some BS about national security could also be used as cover. After all we’d be totally ****ed without aluminum.

  13. John
    Sure. You are right. But It’s also disastrous in a way. Because it’s also a massive victory for Nymbies. Slowly but surely, we are becoming totally and utterly reliant on the outside world. We don’t want to produce or make anything here anymore here in NZ. Next they’ll shut the steel mill, stop any kind of exploration, no more oil and gas drilling, no heavy industry, curtail farming, close quarries….you name it. Nymby.
    We want all the progress in the world….cars, technology, machines, aluminium, steel, bullet trains. Gee…imagine proposing a huge heavy industry factory with 10,000 employees that makes bullet trains…the outcry! As long as it’s Nimby. Bit of a worry. You can only make so much money from people coming here to take photos.

    • Its a finite world and all the industrialisation and population growth will speed up the consumption and growing scarcity of many materials we have come to rely on.

      Its a finite world
      Resources and finite and Non Renewable Natural Resources have been thrashed and nearly two thirds used up. The easy stuff has gone so learn to live more simply.
      Humans lived more simply for hundreds of thousands of years.

    • ‘We want all the progress in the world….cars, technology, machines, aluminium, steel, bullet trains. Gee…imagine proposing a huge heavy industry factory with 10,000 employees that makes bullet trains…the outcry!’

      Yet again you demonstrate your gross ignorance (or utterly selfish greed).

      I’m sure the next generation, i.e. today’s children, would far prefer a habitable planet to any amount of the trappings of consumerism which are produced at their expense.

      Daily CO2
      Jul. 9, 2020: 414.72 ppm
      Jul. 9, 2019: 411.59 ppm

      Progress is a myth, a very short-term aberration in the grand scheme of things that was made possible by rapid desquestration of geologically sequestered carbon-based fuels and their conversion into life-threatening wastes.

    • Herman Shovel Ready, for once I agree with you, however everything you state has happened already under the banner of deregulation. Think car assembly plants, the last one closed in 1999, people wanting cheap imports, meat works, timber plants, big steel plants and all the offshoot industries. The Nymbies, as you put it ,were governments promising your hard earned could go further if we import cheaper.

  14. “Expect to hear plenty of self-serving drivel from the deep south in the year to come”.. So it’s business as usual then… What does surprise me is how transparent the commentary from the tory mossbank has become.. They’ve become the “rolling Stones” of political politics, as in they are now reduced to parodying themselves, as they have nothing more than the same tired out rubbish they’ve been peddling through their pet news media for decades.. The single reason there is to justify supporting this idiocy. is greedy self interest.. There simply aren’t any other valid excuses..

  15. Now that Rio Tinto have decided that the tax breaks, subsidies and cheap power are still not enough and have finally pulled the plug (after years of bluffing) the dependance of New Zealand on overseas mega giants is there for all to see.
    How often have we seen it?
    International giants come here – all smiles, promises and showering good intentions. Offering to help finance new roads, new parks
    They offer JOBS, and anybody that offers jobs immediately gets favourable attention.
    An overseas mega star offering new JOBS is like a National government promising ROADS.
    YES! YES! YES!
    What people forget is in this post Rogernome world jobs only last as long as the next government subsidy, tax rebate, labour legislation repeal or COVID-19 exemption.
    The fortunes of the many are controlled by the few – faceless directors in Europe and America sitting at tables made from endangered Amazon jungle trees destroying NZ towns with a few strokes of a pen, who are completely unaccountable for their actions.
    To them, New Zealanders are just peasants whose whole purpose is to provide them with the grain and the wine to provision their lofty castles.
    And when we can longer provide enough to satisfy them, we get cast off like a used condom. We are left with nothing except the waste they have generated, the deflated myths and the empty shops.
    So long and thanks for all the fish.
    And the saddest thing of all?
    It will happen – again and again because New Zealand has gained a reputation as the easiest low corruption country to do business with, and to take advantage of.
    Labour would not know how to combat this, even if they wanted to.
    And National certainly would not want to.

  16. They got 30 million from the National government and Bill said ‘no more money’ We can’t keep giving them money something else needs to be done. National might be able to come up with a PLAN most of the people of Southland vote for National no matter what. Lets see what they can come up with.

    • Apparently an article I read today they went back again to see bill english before the last election and he told them to fuck off out of his office. That was after being told in 2013 no more subsidies.

  17. So John, you’re perfectly ok that 2600 people will lose their livelihood? Good to know. By the way, you’ve just provided justification for the actions of the Labour government in the 1980s for shutting down all those car assembly plants and other subsidised industries.

  18. Elsewhere, another poster suggested: “We should buy the site back, then tear most of it down, and then repurpose it to recycle plastic. Keeping it running as a smelter would be a waste of money.”

    I wrote, “That would not only “work”, it would solve one of NZ’s all-time worst problems – the one that successive govts keep avoiding, sending it off shore, pretending it doesn’t exist.

    We have mountains, literally, of toxic waste of all kinds that our govts wash their hands of – Time for them to take responsibility for this and deal with it!

    And here, waiting for them, is the solution. If they don’t take this opportunity now, they’ll have to build something similar to do so in the future.” Original comments here

    Again, we have a humungous toxic waste crisis in NZ that we’re pretending does not exist. Let’s re-purpose the smelter to finally deal with it. (Such a project would continue to provide many jobs.)

  19. It is sad to see high paying jobs go from the region, and could cost Invercargill $400 million. Rather than more power subsidies, it would be better for the Invercargill City Council to apply for PGF funding to take control of the smelter under council ownership, potentially run it at a loss, but it would provide more money to the region than it loses. They should also apply for PGF funding to adapt their local economy to something more sustainable long term. Of course this would be a temporary step until aluminium prices improve within the next 2-3 years as the global economy recovers. If it still isn’t profitable, then it will probably need to be closed down, but it is better to do it gradually which allows the region to adapt, and doesn’t cede control to a multinational leech.

  20. what ever happened to government support to develop and establish the infrastructure that would be needed for workers cooperatives could step in to take over businesses abandoned by international corporates. e.g legal infrastructure, financial lending infrastructure,…. the workers cooperative would have to show that they had a market for the products and hey presto. could certainly make a profit if not chanelling money into exhorbitant executive salaries and overseas profit.
    oh thats right it would be seen as being tooooo left wing for this country..

  21. Well said, John. Lets do this life on our own terms.

    My brother brought up canings at our alma mater NBHS on Facebook today. Out of the sheer blue metalwork teacher Mr Smith’s name came up. Caned my academic brother on his first day in class. It’s like we were connected direct to the 19th century. But zilch trauma from the violence usual, to my upbringing anyway. There was some sort of a code to it. In large families anyway.

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