Tiwai smelter to shut down next year, Government accepting closure

This is one of those ‘shock but not a surprise announcements – Rio Tinto has announced that they won’t renew their power contract for the Tiwai Point aluminium smelter and will shut down permanently.

Rio Tinto have claimed power prices have been too high for years, negotiated a deal with the Government in 2015 – see Key says Government won’t add to NZ$30 million of support given to Rio Tinto to keep Tiwai Pt open –  but have still been losing money as world power prices have declined.

The Government has said they will support the workers and businesses affected in Southland, but they won’t try to keep the smelter running.

RNZ: Rio Tinto announces plans to close Tiwai Point smelter

Rio Tinto has announced that it will wind down New Zealand Aluminium Smelters, best known as Tiwai Point smelter.

In a statement to the Australian Stock Exchange, the company said its strategic review had “shown the business is no longer viable given high energy costs and a challenging outlook for the aluminium industry.”

The company has given Meridian Energy notice to terminate its power contract, which ends in August next year. It expects the wind-down of operations will be done by then.

It said it had had discussions with interested parties but could not secure a power contract that would have kept the smelter competitive and profitable.

The smelter’s viability has been questioned for much of the past decade as it grappled with weak metal prices, power costs, and over capacity which has seen smelters closed around the world.

It employs about 1000 people directly and creates a further 1600 indirect jobs in Southland. The smelter is owned by Rio Tinto and Japan’s Sumitomo Chemical Co.

NZ Aluminium Smelters chief executive Stu Hamilton told Morning Report they were on a path to winding down operations.

“We don’t think there’s a deal that can be done that will deliver competitively-priced power to the smelter which is necessary for it to be sustainable.

“We do believe that nothing has been left on the table but if we’re mistaken then the window is still available for a deal to be put on the table but the window for that is closing fast now that we have terminated our electricity contract with Meridian.

It looks like they aren’t mistaken, the Government seems to be not interested in trying to rescue the situation. Their official response shows they intend to deal with the closure rather than try to prevent it: Government will support the people and economy of Southland

The Government will support the Southland economy in the wake of multinational mining company Rio Tinto’s decision to follow through with its long signalled closure of the Tiwai Point aluminium smelter.

“This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a blow to Southland and all those who work at the smelter,” Grant Robertson said.

“The smelter supports hundreds of jobs in Southland and the Government will work with the local community to support economic development in the region to help offset this loss.

“Rio Tinto has indicated it wants to work with the Government to support the community during the wind down of the smelter.

“As we have done in Taranaki, we will support a just transition to more job opportunities. We know the strengths of Southland and we want to build on them in areas such as agriculture, aquaculture and manufacturing. There is also an opportunity to support other energy intensive projects like green hydrogen and data centres.

“There is a degree of inevitability to the decision, as Tiwai has been on the market since 2011, and former Prime Minister Bill English told Rio Tinto in 2013 there would be no further taxpayer money provided.

“Since the smelter opened taxpayers have been subsidising Rio Tinto to keep it open, either directly or indirectly through cheaper power, and Emissions Trading Scheme allocations of over $48 million per year. The company has made the decision not to keep operating without further subsidies.”

Not only does the Government seem happy to see the smelter close, they are looking at what opportunities that may bring:

“Rio Tinto’s decision not to extend their generous power contract with Meridian will flow through to the rest of the market,” Megan Woods said.

“It is disappointing that Rio Tinto is deciding to close one of the world’s lowest carbon aluminium smelters, in favour of keeping open coal plants.”

“Eventually it will free up around 13 percent of total power generated in New Zealand which will relieve some pressure to build new generation. The increased supply will also have a positive impact on prices.

“I also want to make clear that the Government expects Rio Tinto to meet their obligations for clean-up of the site (an estimated $256 million) and do the right thing on the dross,” Megan Woods said.

RNZ: Tiwai smelter closure: A ‘tough day’ for Southland – Grant Robertson

“The message I have for the people of Southland today is the government stands alongside you and with you to start providing new job opportunities in the region.

“This is a very sad day for Southland but there are also opportunities attached to this.”

Not just a tough day, it could be a tough few years if not decade for Southland. It’s hard to see how ‘new opportunities’ will pick up the slack for two and a half thousand jobs, inevitable business losses and the wider family and community impacts.

The union representing workers at the smelter says about 1000 people directly employed by the smelter would be affected, but the decision would also impact on a further estimated 1600 workers in the supply chains.

E tū union said staff were shocked and dismayed and never thought threats to close the plant would ever eventuate.

Negotiator specialist Joe Gallagher said it was not too late to get back around the table, strike a deal, and save jobs.

Sounds like it is too late.

There was a lot of other response.

Contact Says Smelter Closure Is ‘disappointing’

Contact Energy (“Contact”) CEO Mike Fuge said Rio Tinto’s intention to effectively close New Zealand’s Aluminium Smelter (“NZAS”) by giving 14 months’ notice on their electricity contract with Meridian Energy was “very disappointing”.

He said all commercial parties involved in dealing with NZAS, including Contact, had collectively delivered significant cost reductions for electricity. “We’ve all had a strong desire to help secure the financial sustainability of the unique low-carbon smelter at Tiwai, and retain the 1,000 high-paying jobs in Southland, plus the 1,600 contractor and supplier roles.

Contact’s ‘shovel-ready’ Tauhara geothermal power station remained New Zealand’s cheapest and most attractive option for new, renewable, baseload electricity generation, but Mr Fuge said the sensible option was to defer this investment. “Tauhara remains a fantastic project, however it is prudent to press pause for now. We need to factor in the impact of COVID-19 and the potential exit of NZAS and get a clearer picture of demand,” he said.

So that is one ‘shovel-ready’ project that may not happen now.

Rio Tinto Departure Makes Decarbonisation Projects ‘shovel Ready’

Rio Tinto’s smelter, which uses 13 percent of New Zealand’s electricity, is now due to close in August 2021. Greenpeace Executive Director, Dr Russel Norman, says the Tiwai closure will release a huge amount of low-carbon and affordable power back onto the grid.

“The Tiwai closure will mean cheaper power for New Zealand households. It also means there is more clean, renewable energy that can be used to power our cars and industries as we move to a zero carbon economy.

“This will cut climate emissions out of the transport and industrial sectors, while simultaneously helping to reduce New Zealand’s current account deficit by cutting the billions of dollars we spend on importing oil for the transport sector.

“With a ready supply of clean and affordable hydropower now being made available, the Government should create the conditions needed to increase the number of electric cars, buses and trains.”

Norman also says Rio Tinto’s departure blows any case for new coal, gas or oil development completely out of the water.

Rio Tinto Decision Following Strategic Review Of Tiwai Smelter

Mercury notes Rio Tinto’s announcement to wind-down operations at New Zealand Aluminium Smelters Limited (NZAS) with expected closure in August 2021.

Mercury reiterates previously made statements that it is relatively well placed to respond to the decision to close the smelter, with all of its renewable generation assets in the North Island close to load centres and largely free of major transmission constraints as a consequence of reduced South Island electricity demand.

Tiwai Closure Points To End Of Heavy Industry Under Ardern

“The closure of Tiwai Point signals the end of heavy industry under the Ardern Government,” according to ACT Leader David Seymour.

“Labour is squeezing the life out of the economy. For the past three years, it has made it much more difficult and costly for businesses like Tiwai Point to be productive.

“We have a Wellington-centric government of former student politicians that just doesn’t get how the economy works.

I doubt ACT would support a government subsidy of a foreign owned company.

New Zealand First Disappointed Rio Tinto Playing Games With Southlanders

Australian mining company Rio Tinto is playing games with the people of Southland, says New Zealand First List MP, Mark Patterson, following today’s announcement that Tiwai Point is to close.

“It is unconscionable that despite massive support from New Zealand, multi-billion dollar company Rio Tinto is bailing on Southlanders at the height of an economic crisis,” said Mr Patterson.

“New Zealand First has consistently warned that Rio Tinto would walk away, just as they did in Australia, when it no longer suited them. And with a 14 month timeframe, this looks like Rio Tinto is using local workers to play hard-ball with New Zealand power companies.

Patterson seems to be speaking to people who will be adversely affected by the closure while ignoring that NZ First are a part of the Government that is waving goodbye as Rio Tinto walks away.

The End Of Tiwai Pt Could Open Huge Opportunities For NZ

The announced closure of Tiwai Point is welcome news for the clean energy future of New Zealand, and presents huge opportunities in areas such as electrifying transport and developing new, high-tech industries, Coal Action Network Aotearoa said today.

Provided this is not a negotiating tactic, Tiwai’s shutdown should see the closing of the country’s only coal-fired power station at Huntly, which Meridian persuaded Genesis to keep it open as part of the deal it did with Rio Tinto in 2016.

Once the smelter is closed, New Zealand’s emissions will drop by upwards of 1.5 million tonnes a year, emissions the taxpayer has been subsidising NZ Aluminium Smelters for.

“We now have a massive opportunity to look at where and how we will use the renewable energy that will be freed up: we could electrify the South Island’s rail network, and make huge steps toward electric transport,” said CANA’s Rosemary Penwarden.

Union Calls For Just Transition For Workers As Smelter To Close

E tū union is calling for a ‘Just Transition’ for workers in the wake of Rio Tinto’s announcement it will be closing its smelter at Tiwai Point.

“This is a significant employer and this company is at the heart of its community. A closure will affect the entire supply chain, including other local suppliers,” he says.

Joe says the Government needs to consider a similar approach to that used in Taranaki with the Taranaki 2050 Roadmap, to ensure a Just Transition takes place.

I wonder if the E tū union supports the Labour led government letting Tiwai close:  Affiliations – E tū is affiliated to the New Zealand Labour Party.

Infracom To Factor Tiwai Closure In Infrastructure Strategy

Today’s announcement of the potential closure of the Tiwai aluminium smelter by Rio Tinto has very significant implications for the economy and energy market. This will be a key consideration in Infracom’s thinking as it develops New Zealand’s 30 year Infrastructure Strategy.

Tiwai Point Closure – Expert Reaction

Associate Professor Nicola Gaston, Co-director, MacDiarmid Institute for Advanced Materials and Nanotechnology:

“The closure of Tiwai Point is first and foremost a loss for the people of Southland who will be impacted by the loss of thousands of jobs at an awful time. However, it is not a huge surprise, on some level: Rio Tinto has threatened to pull out previously, repeatedly, in negotiating the cost of the electricity supply with Government, and the discussion about what New Zealand should do with the energy is not new.

Jeanette Fitzsimons (former Green Party leader) pointed out late last year that ETS subsidies for the smelter would total a billion dollars by 2030, and that we should consider better uses for the 13 per cent of our electricity supply, all of it renewable.

“Many of my colleagues at the MacDiarmid Institute are deeply passionate about this being the right time to invest in new tech to make the most of our renewable energy advantages in New Zealand – whether this is a form of energy storage, which could include green hydrogen generation, or something even more ambitious, such as using the energy for manufacture of other components needed for a zero carbon economy, such as solar panels – these options exist, but require a government-led business case to be developed.

Dr Anna Berka, Lecturer in Management, Entrepreneurship & Innovation, Massey University:

“Rio Tinto has flagged potential closure for some years. The current crisis has clearly pushed it over the edge. Previous governments went far to make it comfortable here; it was granted some of the lowest electricity prices, reportedly below cost. In return, Rio Tinto has been obstructive to emissions pricing, and by all indications seems to have abused our resource consent process as well. As the largest consumer of electricity in the country, its closure will have ripple effects on the entire energy sector, resulting in temporary surplus capacity – and resulting in downwards pressure on market prices, as well as very likely reducing the viability of new generation capacity currently under development.

Professor Emeritus Ralph Sims, Sustainable Energy and Climate Mitigation, Massey University:

“Few countries have surplus power generation available to meet the present electricity demand as will be the case in New Zealand once the Tiwai Point smelter starts phasing out its high electricity-consuming aluminium potlines over the next year or two.

“We know there will be growing demand over the next decade or two for electricity, especially for electric vehicle charging and industrial and commercial heating by companies, schools etc., looking to displace coal with electricity.

“This will also further reduce the combustion of gas and coal used for power generation and therefore help lower the total carbon dioxide emissions from electricity generation.

“So, in a perfect world, closing Tiwai Point should theoretically result in greater shares of renewable electricity, a reduction in greenhouse gas emissions, and cheaper electricity prices for all New Zealanders.

“However, it’s not that easy.

“So, will New Zealand electricity consumers reap the economic and environmental benefits of having cheaper hydro power suddenly becoming available once the smelter starts winding down?

“I have my doubts.”

Associate Professor Nirmal Nair, Department of Electrical, Computer and Software Engineering, University of Auckland:

“What the likely energy consequences are, which we as a country need to prepare for, is based on how this news is going to play out in the next two to 10 years or so.

“If the demand destruction of electricity load happens in the next two to three years, we will need to spend some dollars to strengthen the transmission assets there to port the electricity to North Island.”

Adjunct Professor Harvey Weake, Faculty of Engineering, University of Auckland:

“I guess the industry has been bracing for this announcement for some time. Given the plant is close to 50 years old, that is a pretty good innings for such a plant and without a major capital injection to maintain its competitiveness, it was just a matter of time. Newer plants are just more energy efficient.

“Short-term economic losses from the loss of Tiwai will be primarily through the loss of local fixed costs from that industry, but given it is foreign held, the impact to New Zealand’s economy will be pretty modest given it wasn’t projected to make significant profits anytime soon.”

Professor Sally Brooker, Department of Chemistry, University of Otago:

“New Zealand should make the most of that electricity for producing green products (e.g., hydrogen, ammonia, silica for PVs, and/or even keep making super green aluminium on a smaller scale as Jeanette Fitzsimmons suggested in an earlier Spinoff article), and use the Regional Development Fund or COVID-19 budget to develop the necessary plant at Tiwai. It is a great site to do so. And it would keep skilled jobs in Southland as, without the smelter, the region will be absolutely hammered by the job losses.

“New Zealand needs to be investing heavily in further developing green energy generation and use, as part of our current government spending/investment. We could be world leaders in going completely to green energy (including transport – electricity, green hydrogen etc), as the world looks to respond to global climate change. We start from such a strong position with our high percentage of green electricity.”

We will see over the next few days or weeks whether the Government was preparing for this and has plans for alternative use of the Manapouri power, and has alternative job and business opportunities for Southland. The Government must have known the closure of Tiwai was likely.

 

 

 

 

 

 

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48 Comments

  1. John J Harrison

     /  10th July 2020

    Typical comments from our gang of socialists.
    There is zero chance of “ retraining “ 2,600 people.
    Of course the COL will support the laid off workers — with dole payments.
    If anyone believes what Shane Jones has to say about the dire situation then more fool them.
    After $100’s millions “ invested “ in Northland to generate jobs through the PGF his many “ nephs “ are still on the couch.

    Reply
    • Blazer

       /  10th July 2020

      Typical comments from you John.
      This is the ‘money shot’

      ‘“There is a degree of inevitability to the decision, as Tiwai has been on the market since 2011, and former Prime Minister Bill English told Rio Tinto in 2013 there would be no further taxpayer money provided.’

      Rio has ,as usual ‘left the door open’ i.e more subsidy play….SEE YA LATER.
      Don’t forget the 1/2 billion plus you need to spend to tidy the place up.

      Reply
    • Duker

       /  10th July 2020

      What 2600 people?

      Under 1000 employed by smelter and while it would have a trades heavy workforce still a lot are semi skilled labour and office staff/ canteen/cleaning/plant operators.
      Just as well the dairy farms of Southland ‘are crying out’ for local semi skilled workers, migrant workers will find the work visas arent renewed…cue knashing of teeth and wailing from farmers who were used to compliant workforce who bring their wife and kids thought they would get residency…pffft in a pudd smoke.

      Reply
      • The 1600 are the ones whose jobs depend on the smelter even if they are not directly employed by it.

        Reply
        • Duker

           /  10th July 2020

          Depend on ?

          Do they pick up fallen ingots as the trucks sped away? Its a magic number which doesnt match reality
          The wages bill from the company accounts is only $60-70 mill pa. that cant support another 1600 people even if they spent every cent in town every week and saved nothing or paid the bank for mortgages. Most of household items come from out of Southland and when they holiday it will further North.

          All the other costs like raw materials -$650 mill are imported by ship electricity is fed by lines and wont lose any jobs. Its quite a unique industry, almost colonial with reduced benefit locally than you would think

          As I said Its an imaginary number of jobs based on the economic production of the plant. But all the raw materials imported directly to port and same goes for the Al ingots which arent made into products in Southland ( as its a special high purity grade-)

          Reply
  2. Reply
    • Duker

       /  10th July 2020

      The plant itself has just under 1000 jobs, it seems to be its own virus which multiples the numbers
      And even the 900+ may be too high as they have previously shut pot lines etc

      Reply
      • December 2018: NZAS Reopens Upgraded Potline 4 At Tiwai Point Smelter

        https://aluminiuminsider.com/nzas-reopens-upgraded-potline-4-at-tiwai-point-smelter/

        Reply
      • Pink David

         /  10th July 2020

        “The plant itself has just under 1000 jobs, it seems to be its own virus which multiples the numbers”

        Yes. This is how economies work.

        Reply
        • Duker

           /  10th July 2020

          Raw materials imported , product is exported. Electricity used doesnt create jobs in Invercargill
          Very low fraction of the yearly turnover goes locally. Wage bill is only 10% of the raw material imports
          So that $60-70 mill wage bill ( from accounts) is sole income supporting 2500 jobs ?
          Even the RNZ says ‘affected’

          Anyway 2018 Potline reopoens, 2020 say they are going .
          Someone is pulling your leg …not the first time ..the first time English gave them $30 mill as a subsidy and hes an MP for Southland.

          Reply
          • Pink David

             /  10th July 2020

            “Raw materials imported , product is exported. Electricity used doesnt create jobs in Invercargill”

            Aluminum smelting is a method by which electricity is exported. That how the whole industry works. That is why Iceland is a significant producer of aluminum.

            “Anyway 2018 Potline reopoens, 2020 say they are going .”

            Have you looked at the aluminum price?

            Reply
            • Duker

               /  10th July 2020

              Yes electricity is exported.
              What jobs in invercargill will be lost from the electricity going elsewhere in NZ. ( cost of electricity $110-120 millpa)
              None .
              What jobs will be lost when that $600 mill of raw materials doesnt arrive at Bluff and the whole product isnt exported
              10. who work at the wharf for ships that might arrive once a week or two.

              Accumulated losses from 2017 accounts $300 mill. How kind to not make any money in NZ and pay taxes
              As their product is exported , essentially no net GST paid, may even be a substantial GST refund
              as well they are funded by taxpayer for ETS carbon emissions as they are an ‘export industry’

  3. Blazer

     /  10th July 2020

    All over NZ people are losing their jobs ,most with the knowledge that alternative employment won’t be available overnight.

    The winding down at the smelter is gradual .
    It is not like coming to work and seeing a CLOSED sign on the door.

    Expect to see Muller and his troops trying to make political capital out of the situation.

    Reply
  4. FarmerPete

     /  10th July 2020

    I would assume that there will be hefty service based redundancy payouts here. In this country you cant just sack 1000+ people and walk out leave.
    I am pleased to see the subsidies end, but also disappointed about the job losses.

    Reply
    • Duker

       /  10th July 2020

      They have been profit shifting offshore for decades.
      All the output is sold to a related party Rio Tinto Marketing Pte Ltd, a Singapore company for worldwide trading which is a common method of shifting profits out of the country ( legally)
      Any money for everyday expenses and normal operations isnt done through the NZ banking system but from Rio Tinto Finance Plc , a UK company and you can bet it wont be at market rates as this is another method where much higher interest but not usurious can be charged.
      These details are available from a check of the local company accounts Pacific Aluminium NZ Ltd
      Even Treasury when Bill English gave them a handout was highly sceptical of their true financial position because of the buying of raw materials from Rio Tinto, the commercial lending from Rio Tinto, the only buyer of the high grade Al was Rio Tinto again.

      Then again they have cried wolf is it 5 or 6 times before , and around 2 months before the election again shows they are doing for some advantage and after the election may have to fess up that it is suddenly all rosy again.

      Click to access nzas-2394495.pdf


      Click to access 59-Pacific-Aluminium-Searchable.pdf

      Reply
      • Pink David

         /  10th July 2020

        “They have been profit shifting offshore for decades.”

        This is the whole point of foreign investment. They invest with the expectation they get profits. Is there some world you know of where this isn’t the case?

        Reply
        • Duker

           /  10th July 2020

          What profits ?
          According to their accounts there is modest losses continuously, as though they only have remained open from the goodness of their heart.
          In reality the real money is shifted to countries where they have special low tax agreements. Like Ireland where in spite of having 12% company tax rate they did even lower deals to around 1% for the multinationals who shifted their profits there via trading hubs model
          Singapore has copied that and has attracted a lot of ‘trading’ that should pay taxes in Australia and NZ
          No profits here mean no tax paid here, no level playing field with other businesses who might buy power ( at a higher price) and pay taxes

          I would be very surprised if they followed up and actually closed down as theres substantial remediation costs…you know real money.
          As an side I expect James Hardie will have to clean up its Auckland site fully as they have closed up shop. None of this selling land to a Cook Islands company and its sayonara

          Reply
          • Fight4nz

             /  10th July 2020

            You think you have spoon fed him enough of the basics of multinational MO this time?

            Reply
    • Wouldn’t the subsidies cancel out the cost of the job losses ?

      2600 people on the UB is (allowing for $500 each with accommodation allowance and such things) $1,300,000 a week, or well over $60,000,000 a year.

      Reply
  5. Gerrit

     /  10th July 2020

    Be interesting to see how the government in 2021 will hold Rio Tinto to account and spend the $250M to clean up the site.

    Will Rio Tinto simply walk away?

    And will Rio Tinto take responsibility for the disposal of the stockpiled slag?

    Or again will they simply walk away?

    Not like the state has any lien on Rio Tinto assets bar an outdated number of pot lines and a contaminated site..

    And anyone that suggest that the state nationalises the smelter, read the Duker supplied documents. The state would need to buy bauxite at market rates (versus inter company transfer by Rio Tinto) plus try and sell the aluminum ingots to Rio Tinto’s customers at a higher price then they are buying for now (due to increased bauxite costs).

    Here is an outlandish suggestion. Replace the smelter with a steel mill. Mine ironsand from the Taranaki Basin to vitalise that region and bring in coking coal from the West Coast to reviltalise that region.

    Add rolling mills to at least start making New Zealand’s requirement for railway rails

    Reply
    • Corky

       /  10th July 2020

      What about luring Microsoft to build a data centre in Southland? Add Google and NASA as well.

      Reply
      • Duker

         /  10th July 2020

        Not a location near the international fibre optic networks, which are then too isolated from where the consumers of data are.
        Tthey mostly look for data access first and the power supply from renewable sources second. Any data would have to travel the length of the country to reach the international fibre hubs via Sparks network
        . Just takes one ‘fat fingered’ digger operator/network nerd to cut the cable somewhere between Bluff and the North Shore terminals

        Reply
    • Ironsand can be found in other places, too. Anyone who grew up in Wanganui will know the agony of running down the red hot sand to the sea.

      I seem to remember that it’s in the Waikato, but may be wrong. Something was dredged from the river. This had the bonus of avoiding floods.

      Reply
      • Gerrit

         /  10th July 2020

        Iran sand is found from the Waikato River mouth south to Whanganui. The best is in the Taranaki Basin New Plymouth northwards. Best yields are not from the iron sands but from the clay below.

        The likely hood of mining from the sea bed are nil with this government.

        Reply
        • Corky

           /  10th July 2020

          Iron sand applied to a garden makes plants really grow. I wouldn’t have a clue why, but would probably guess it’s to do with magnetism. If I magnetise iron sand before chucking it on the garden, the results are even better. Weird stuff. A whole alternate science around this stuff and its use has sprung up.

          Reply
          • Duker

             /  10th July 2020

            Its alternate …but its not science when you use the term.
            Any fertilizer with the right trace elements will do the trick, thats science, not magnetism hocus pocus

            Reply
            • Corky

               /  10th July 2020

              ”Any fertilizer with the right trace elements will do the trick.”

              Not so. Iron sand doesn’t degrade to release what little mineral content it has. You may not know this, but magnetism plays a very large part with regards to plant growth. If you think N.P.K with some traces minerals chucked in for good measure is all you need, then you are mistaken.

              Best to understand something before pontificating. I have been using Iron sand for 15 years….you don’t have a garden.😄

  6. Alan Wilkinson

     /  10th July 2020

    The transmission line losses and costs in getting the power reliably from Fiordland to users are going to be substantial. The Far North already gets frequent outages on its supply from the south. I’m hoping the extended Ngawha geothermal plant might ease that though I think much of it is aimed at Kaitaia. Since lockdown there seems to have been a resumption of work on building the new transmission line north near Kaikohe.

    Reply
    • Duker

       /  10th July 2020

      They are minor in the scheme of things Look it up.
      Any way , and you should know this, electrons dont move like cars along a road from Manapouri to Auckland. Losses on say the DC line from Benmore to Upper Hutt are always there. Sometimes the flow is from North to South .
      There is substantial geothermal power now in central North Island easily fed into the major lines heading to Auckland
      https://www.transpower.co.nz/system-operator/operational-information/generation
      at 4PM it was 500MW flowing from South to North which is around 16% + of that generated by NI on its own.
      Sure extra costs for some bottleneck places like Bunnythorpe etc , but its future saving of new generation build where the savings would come from to offset any network changes.

      Northland has poor power distribution network from its lines company and only one main line via Transpower from West Auckland.
      Does any body want to build some windmills along the coast ?
      They were supposed to get their power station at Marsden Pt, but when it opened it closed the next day without generating an electron.

      Reply
  7. Duker

     /  10th July 2020

    Costs to upgrade network ? Already underway and the Southland Clutha- Waitaki extra link
    costs $100 mill for 330km
    https://www.transpower.co.nz/clutha-upper-waitaki-lines-project
    Duplexing the Roxburgh–Livingstone line section of the Islington-Roxburgh line with a duplex Goat conductor
    Thermally upgrading the Cromwell–Twizel section of the Roxburgh­–Twizel line
    Duplexing the Aviemore–Benmore line with a duplex Goat conductor
    For some reason the types of conductors are named after animals , rabbits , goats zebra, etc and the biggest a Quad Moose

    Reply
  8. Fight4nz

     /  10th July 2020

    It does strike me as exceedingly odd that I these times you can’t command a premium for ‘green’ Aluminium. It seems to me to be a sitter to be able to strike a deal with a Mercedes or BMW or Tesla. Perhaps a j/v where actual parts are produced not just ingots.
    The problem may well be sourcing bauxite as reasonable prices.
    But given they will almost certainly walk away from the clean up, that looks like a free plant to me. But have to keep them from stripping it before closing. Only collateral we can get.

    Reply
    • Gerrit

       /  11th July 2020

      Biggest misconception from environmentalists is that there is a premium to be got for “green” products.

      There is not. Most people don’t care; price and performance is what is bought.

      Worth a read

      “China now supplies 55 per cent of global aluminium and exports its oversupply. It is a global price setter, although Chinese production is only weakly related to world prices. Aluminium prices spiked around 2017 when the Chinese government turned off some smelters and power stations to reduce air pollution.”

      and most importantly (note the word “may”)

      “Global consumer brands such as Nestle, Apple and Toyota want to be able to use emissions-free metals in their products, and may be willing to pay a premium for it.”

      They will not if their competitors do not pay the premium and most importantly can they pass the premium onto their customers? Will anyone pay more for an aluminium can of beveredge just because it is made from “greener” aluminium?

      https://www.afr.com/policy/energy-and-climate/australian-aluminium-is-over-20191120-p53cay

      Reply
      • Fight4nz

         /  11th July 2020

        Nestle, Apple and Toyota and aluminium cans are all commodity products. Correct, they may pay small premium and may not.
        But I deliberately selected premium brands. Why does anyone buy a Tesla?

        Reply
        • Fight4nz

           /  11th July 2020

          The misconception among many on the right is when they state their stridently held opinions based on myopic viewpoints formed in the Jurassic era, that they are factual.
          It’s like Fair Trade shops don’t exist.
          Personally I fill my shopping cart every week with items for which I often pay a premium simply to ensure to buy NZ made as much as possible.

          Reply
          • Gerrit

             /  11th July 2020

            Go you good thing. The problem is market size. For every one of you there are millions upon millions more who don’t do (nor could afford) as you do.

            If they did there would be a fair trade shop on every corner, Scrub that for there would not be enough fair trade produce to sell.

            “The misconception among many on the right is when they state their stridently held opinions based on myopic viewpoints formed in the Jurassic era, that they are factual.”

            One thing about RWNJ is that they understand markets and marketing. They don’t dance around maypoles and sing happy clappy songs whilst wearing rose tinted glasses (right back at your pious lefty viewpoints seen through a haze of illicit smoke and mushroom confectionery) thinking if only everyone bought fair trade all will be well.

            So good for you buying mung beans grown organically in the local fair trade shop. Award yourself a feelgood moment in your righteous moral superiority.

            The rest of us need to buy what we can afford and off which there is a ready supply.

            Reply
            • Corky

               /  11th July 2020

              When I’m in a fair trade shop everyone seems to be white, have names like Bree, and going by their expensive shoes, have a platinum credit card. Maybe just a gold card if times are tough. I’m sure they think I’m one of these subsistence farmers from South America they support; who’s come over on a raft to check them out.

            • Fight4nz

               /  11th July 2020

              “One thing about RWNJ is that they understand markets and marketing”
              Quintessential rinse-and-repeat rwnj bs.
              You don’t even appear to comprehend that premium and commodity are 2 different markets.

            • Gerrit

               /  11th July 2020

              There is no such thing as two markets for a single product. The produce (products) in that market might be premium and commodity segments but the market is one entity.

              For a lefty lesson 101.

              There is a single market for cars. This market is broken down into a myriad of product segments (electric to diesel, sedan the SUV) and participants (from tesla to yugo) with prices to suit.

              There are no two markets for cars.

              You are confusing (as is a lefty trait) market with products. An easy mistake to make but something RWNJ fully understand.

              Similarly there is a market for coffee beans in New Zealand. I can buy fair trade unground beans for $8.00 per 200 grams from Verde, or I can buy coffee beans from Countdown (woolies brand) from $5.00 per 200 grams.

              Both products are in the same (coffee beans retail) market,

              I buy the Countdown French Roast house brand coffee beans to save myself $3.00 (and a drop or two of petrol) for basically the same cup of coffee.

            • Fight4nz

               /  11th July 2020

              ROFLMAO.
              Did you even attend marketing 101? If so your memory is playing tricks on you or you grabbed the wrong end of the stick right from the outset.
              Products may be put into single categories eg cars. But the desire to sell to different markets is what drives product differentiation. So Corollas sell to mass market, Ferraris sell to premium market, 2nd hand import Suzukis sell to low end market. Marketing 101.
              I shouldn’t have to explain this to someone from right.

            • Gerrit

               /  11th July 2020

              You have just proved my point. There is only one market for cars. It has categories (or product groups) but it is one market. A buyer in the car market has a choice. Tesla or Yugo. In the car market, customers have a choice (conveniently broken into product sectors for marketing purposes).

              Same with Alumnium ingots. There is one market within which there are on your perception “green” and “dirty” products. Customers in that market have a choice. Green or Dirty.

              Same in the coffee bean market, customer have a choice. $8.00 for trade fair beans or $5.00 for Countdown house brand.

              Am surprised as a lefty you have not asked for the nationalisation of the smelter.

      • Blazer

         /  11th July 2020

        Organic produce qualifies as ‘green’and commands a premium.Period.

        Reply
        • Gerrit

           /  11th July 2020

          Not wrong that people buy the “green” products and willingly pay the premium. No dispute. Problem is not enough people buy to make a difference.

          Don’t see much organic stuff for sale in quantities here in South Auckland to suggest that there is a groundswell of change.

          Majority of eggs sold are not the more expensive “free range” ones rather the cheaper cage farmed.

          “green”, free range” and “organic” are great but when faced with the cost, the majority still buy on price.

          More aisle space here is taken up by gluten free products than “green”, free range” and “organic”

          Reply
    • Pink David

       /  11th July 2020

      “But given they will almost certainly walk away from the clean up, that looks like a free plant to me.”

      Well, how about to take it over and see how well you green aluminum business model works,

      Reply
  9. Pink David

     /  11th July 2020

    “So Corollas sell to mass market, Ferraris sell to premium market, 2nd hand import Suzukis sell to low end market.”

    Is a Corolla competing with a 2nd Suzuki for those buyers?

    Reply

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