Rio Tinto’s threat of capital strike appears to have backfired on them, with a political consensus emerging that the multinational has overplayed its hand on this one and some even starting to question whether we might be better to just shut the smelter down and be done with it.
CAFCA were particularly blunt:
Campaign Against Foreign Control of Aotearoa calls Rio Tinto’s bluff. Stop crying wolf, stop holding Southland and the country to ransom. Go ahead and close the smelter and bugger off. See if we care, the country will be much better off without you…
The smelter is the textbook example of corporate welfare in New Zealand. It is the biggest bludger in the country. Those who extol the bracing discipline of market forces for everybody else are strangely coy when it comes to this corporate recidivist. When the Government renationalised the railways last week, one pejorative word which was heard a lot was ‘featherbedding’. If you want to see the most feathered of beds, look no further than the Bluff smelter.
Well, guess what? No Right Turn crunched some numbers and it turns out CAFCA’s right. According to Rio Tinto’s own figures, shutting the Tiwai smelter would actually benefit New Zealand to the tune of $26 million a year by allowing us to shut the inefficient coal-burning Huntly power station and reduce our carbon emission liabilities.
Seems Rio Tinto’s bargaining position isn’t nearly as strong as they thought, and the Government was right to call their bluff.