Rio Tinto ups the ante

Written By: - Date published: 10:02 am, April 2nd, 2013 - 166 comments
Categories: capitalism, economy, energy, national, privatisation - Tags: , , ,

All over the news this morning:

Rio Tinto rejects Tiwai subsidy offer

Rio Tinto has rejected the Government’s offer to subsidise the Tiwai Point Aluminium Smelter power bill.

The smelter needs help to survive – it has been shedding staff and could close if it can not get an agreement with hydroelectricity generator Meridian Energy, possibly throwing the Southland region into economic crisis.

Last week, the Government opened discussions with the smelter’s ultimate owners, global mining giant Rio Tinto, in a bid to broker a deal over a variation to the existing electricity contract.

But Prime Minister John Key told Newstalk ZB’s Mike Hosking that the company came back over the weekend to turn down the offer made by the Government, saying they wanted a longer term deal than the Government was prepared to offer.

I have some sympathy for the Nats on this one, they are between a rock and a hard place. While most of the country will be worried about the effect on Southland, however, I suspect the Nats’ concerns will be a little closer to home:

Should the smelter – which uses one seventh of New Zealand’s electricity output – close, wholesale power prices are likely to fall, affecting the earnings potential of all power companies including Mighty River which the Government is now the process of partially privatising.

Caveat emptor.

166 comments on “Rio Tinto ups the ante ”

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  1. freedom 1
    2 April 2013 at 10:12 am

    “Caveat emptor.”
    Opposition parties should be making that the opening line of every press release on Asset Sales.

    If, that is, they have any intention of getting them back

  2. Kevin Welsh 2
    2 April 2013 at 10:19 am

    That is the market.

    So, why is it that that Government insisted that it had to be at ‘arms length’ when it came to the $4 million Kiwirail required to repair the Napier-Gisborne rail link, yet it is all over the Tiwai crisis to the tune of ‘god-only-knows’ how much taxpayer money?

  3. mickysavage 3
    2 April 2013 at 10:22 am

    The effects are profound.

    Meridian loses its largest customer.

    The electricity market is thrown out of kilter.

    The expensive generators are shut down first including Huntly’s Coal generator. Solid Energy then loses one of its best supply contracts.

    Maybe right now is not the best time to be hocking off the crown jewels.

    And maybe Meridian should think about buying the smelter?

    • Lanthanide 3.1
      2 April 2013 at 10:59 am

      “And maybe Meridian should think about buying the smelter?”

      Um, why? No one is going to want it, except possibly for parts / land. Even that seems unlikely.

      It’s old technology that for the last 20 years or so has only been profitable due to the price of electricity, and in recent years hasn’t been making a loss.

      • mickysavage 3.1.1
        2 April 2013 at 11:03 am

        I was wondering what Meridian was going to do with all that extra power and at the same time what we were going to do with Invercargill if the smelter was closed because the effects on the local area would be horrendous. And I don’t trust Rio Tinto’s claims.

        If the figures stack up then I am philosophically fine with such a proposal. Otherwise NZ Inc will need to do a fair bit of job creation in the deep south.

        And the price I was thinking of was in the vicinity of $10.

        • cricklewood 3.1.1.1
          2 April 2013 at 11:30 am

          Rio Tinto is looking for a way out or a way of delaying the inevitable for another 10 or so years by cutting imput costs as far as possible.
          The market for high grade aluminium is ever decreasing as the aircraft manufactorers use increasing amounts of carbon fibre and similar compsite materials. (The Boeing Dreamliner being the ground breaker)

          I say we bite the bullit make Rio Tinto adhere to the exisitng contract and start working on developing some sort of alternate power hungry industial type complex on or near the site to use some of the capacity. Say server farms, tech institue/labs that could conduct experiments test using a large supply of very cheap power. Perhaps it could even be made availble to start up business with a clever idea that would benifit from the cheap power for a time to get up and running.

          • Draco T Bastard 3.1.1.1.1
            2 April 2013 at 1:08 pm

            We could just use the freed up power to drive the trains around the country. It’ll take awhile to put in place but well worth it. Just think of the millions we’d save every year from not having to import so much diesel.

            • cricklewood 3.1.1.1.1.1
              2 April 2013 at 1:47 pm

              Whatever it is we should start now so when Tiwai inevitably closes we arn’t wringing our hands wondering what to do.
              Although I do beleive industry of some type must be retained on the site to provide jobs for the population down there before we start looking at moving the capacity up country.

            • freedom 3.1.1.1.1.2
              2 April 2013 at 1:47 pm

              we could use the electrified main trunk line that was built back in the 1990’s oh that’s right, National canned it before we even got as far as Waikanae 🙂

            • RobertM 3.1.1.1.1.3
              2 April 2013 at 7:07 pm

              Rail electrification would be enormously expensive. But surely in the early 1980s during Rob’s think big the West Coast coal line and the whole NIMT including Auckland-Hamilton should have been electrified.

              • One Tāne Huna …
                2 April 2013 at 7:40 pm

                “Enormously expensive” – but it’s the cost/benefit ratio that counts.

                We should widen the gauge while we’re at it 😉

              • Draco T Bastard …
                2 April 2013 at 7:59 pm

                Rail electrification would be enormously expensive.

                It’d take a bit of work but, again, think of the savings that we’d have forever by not having to import diesel to run the trains.

          • Colonial Viper 3.1.1.1.2
            2 April 2013 at 9:35 pm

            The Boeing Dreamliner being the ground breaker

            The results of that experiment are still very much, uh, up in the air…

    • ghostwhowalksnz 3.2
      2 April 2013 at 3:19 pm

      Not so fast. You need a generator close to the biggest demand.
      This is because two types of power, are required and the one to maintain a magnetic field for electric motors does need to be fairly closeby.

      Manapouri was ideal for Rio Tinto as the power required is merely resistive, and didnt need to be close by

  4. Pete 4
    2 April 2013 at 10:36 am

    Meridian is not going to buy a failing smelter.

    In terms of the politics of this, here are the outcomes in order of desirability:

    1. The smelter remains in operation, the government halts the asset sales.
    2. The government halts the asset sales, the smelter ceases operations.
    3. The smelter remains operating, the government continues its asset sales programme
    4. The smelter ceases operating and asset sales go ahead.

    Of course, the right will claim the left is being hypocritical if we argue for anything but the optimal outcome, but politics is the art of the possible and option 2 is probably the best in this environment. The government is hoping for option 3, but it looks like outcome 4 will happen if Key doesn’t blink first.

    • Draco T Bastard 4.1
      2 April 2013 at 1:10 pm

      I’d probably put option 2 as the best option anyway – unless we develop our own bauxite mines, buy the smelter and close down most of it.

    • The Pink Postman 4.2
      2 April 2013 at 3:15 pm

      The answer is to Nationalize the smelter and buy back the assets at the price paid for them/
      Labour needs to announce this now. I would suggest that all LP members write to caucus asking that this be done . Now!

  5. infused 5
    2 April 2013 at 10:41 am

    Looks like they are going to let it fail – a good thing, but not good for the workers.

    • One Tāne Huna 5.1
      2 April 2013 at 11:09 am

      It will be a good thing if electricity prices drop, especially as that would also undermine the theft of Mighty River Power.

      • Colonial Viper 5.1.1
        2 April 2013 at 11:19 am

        What’s the market incentive to let power prices drop?

        • prism 5.1.1.1
          2 April 2013 at 11:46 am

          Molly Meljuish I think said that electricity prices couldn’t be expected to drop because of the framing of the legislation that sets getting the highest market price achievable as the goal for the SOE’s. And the privately owned interests would be expected to go for the profit too.

        • Draco T Bastard 5.1.1.2
          2 April 2013 at 1:27 pm

          There probably isn’t any. In fact, I think we’d more likely see a price increase.

          The plant has fixed running costs.
          The more that the companies sell means that those fixed costs can be spread a lot thinner over each unit
          By taking so much demand offline that means that those fixed running costs are going to have to be spread over less units which will push the price up per unit

          The only way we’d see price drops would be if we still had a state monopoly and the expensive coal fired stations were shut down as the smelter was.

          Generally speaking, the supply/demand curve fails as well.

          • Colonial Viper 5.1.1.2.1
            2 April 2013 at 2:04 pm

            Generally speaking, the supply/demand curve fails as well.

            It absolutely fails. Steve Keen has demonstrated it. It’s based on assumptions of market player behaviour which is absolutely not borne out in real life. For starters, mathematically, a supply/demand curve can be any polynomial shape (or combination of polynomial shapes) whatsoever. Not that they ever teach you that in economics – too complex and ruins their nice orderly economic theories.

            • Draco T Bastard 5.1.1.2.1.1
              2 April 2013 at 2:18 pm

              If the supply/demand curve worked we wouldn’t have seen record inflation after the GFC and the collapse of demand – we would have seen deflation instead. We didn’t see that deflation because costs have to be covered and with falling demand that means that price per unit has to go up – especially when the costs are going up as well.

              Thing is, all the expectations of electricity prices falling are based upon the supply/demand curve propagated by the mainstream economists and it just doesn’t friggen work.

              • One Tāne Huna …
                2 April 2013 at 5:33 pm

                Collapse of demand

                [citation needed]

                With respect, how can you know this? “Demand” depends on so many things these days. I agree that the model looks broken, but it can be argued that the breakage is entirely a consequence of politics, or more precisely corruption.

                Economics needs better models.

                • Draco T Bastard …
                  2 April 2013 at 8:04 pm

                  [citation needed]

                  Here.

                  As I said, after the GFC people stopped spending as much. Generally speaking, that’s what a recession is.

                  With respect, how can you know this?

                  By reading the news and the stats.

                  • One Tāne Huna …
                    3 April 2013 at 8:22 am

                    Demand for electricity? Productivity is (more or less) increasing, a crude measure, to be sure…

                    • Draco T Bastard …
                      3 April 2013 at 11:13 am

                      Good job I wasn’t talking about electricity then. That said, if the smelter is taken offline then we’ll see a collapse in demand for electricity – a drop of ~15% in fact.

                    • One Tāne Huna …
                      3 April 2013 at 12:20 pm

                      Indeed. So according to market theory the price should fall, no?

                      I’m not saying it will but if it didn’t that’d be a pretty strong case for major sector reform, yes?

                    • Draco T Bastard …
                      3 April 2013 at 6:48 pm

                      So according to market theory the price should fall, no?

                      That is correct.

                      I’m not saying it will but if it didn’t that’d be a pretty strong case for major sector reform, yes?

                      No, it would be proof that the economic theory that the politicians used to put in place the present system doesn’t work and that we need to look at the economic theory. This would then probably instigate change within the sector but also change across the whole of society.

                    • One Tāne Huna …
                      3 April 2013 at 8:10 pm

                      “the economic theory that the politicians used to put in place the present system”

                      We’re talking about Max Bradford, right? Are you saying he had a theory other than “my wingnut mates said I should do this”?

                • Colonial Viper …
                  2 April 2013 at 9:30 pm

                  “Demand” depends on so many things these days. I agree that the model looks broken, but it can be argued that the breakage is entirely a consequence of politics

                  No such thing as ‘just politics’ in a corporate driven plutocracy. At the minimum it’s what it always has been – political economic choices.

      • The Pink Postman 5.1.2
        2 April 2013 at 3:28 pm

        Sorry Tane Huna but if you think power price are going to be reduced you are living in coockoo land. Plus is it worth gaining a few cents by putting hundreds of worker out of work. Not for me.

        • One Tāne Huna 5.1.2.1
          2 April 2013 at 4:18 pm

          Increasing supply leads to reduced prices, doesn’t it?

          Is this simply more evidence that we need to drag the Electricity Industry Reform Act behind the barn and kill it with an axe?

        • freedom 5.1.2.2
          2 April 2013 at 5:29 pm

          dear Pink Postman, have you heard of a little place called Hillside? what were your views on those few cents?

          • freedom 5.1.2.2.1
            2 April 2013 at 7:06 pm

            Dear PP, ignore the above, the ol’ grey matter seems to have gotten all turned around, I thought you said ‘it is worth’. you have my sincere apologies.

  6. Enough is Enough 6
    2 April 2013 at 10:49 am

    Have Shearer and Cosgrove climbed off the fence yet and made a stance on this issue?

    Now is the time to show leadership and an alternative.

    It is moments like these when an opposition can show they are a real alternative.

    • prism 6.1
      2 April 2013 at 11:42 am

      Cosgrove spoke on Morning Report radionz this a.m.

    • Richard 6.2
      2 April 2013 at 11:55 am

      The point Shearer and Cosgrove have made, and should continue to make, is that if it weren’t for the asset sales programme, Rio Tinto wouldn’t have the bargaining position that they currently have. Therefore an issue of Key’s own making.

      • The Pink Postman 6.2.1
        2 April 2013 at 3:21 pm

        Both Shearer and Cosgrove have been in top form over this. Cosgrove has really got stuck into the bastards. Keep it up Clayton I for one am enjoying the pasting the Tories are getting this week.

    • alwyn 6.3
      2 April 2013 at 2:34 pm

      The main problem they have is that they can’t work out what to say.
      If the smelter does accept a short term subsidy, as Key appears to be offering, they have to rant and rave that he shouldn’t do it and that the smelter should be closed down.
      If on the other hand the smelter is going to be closed down, because the Government won’t provide a subsidy they want to rant and rave that Key doesn’t care about New Zealander’s jobs.
      They don’t dare come out with any opinion until they can be sure it is the opposite of what National are going to do.
      Thinking about the matter a bit further of course it would be safe to let Shearer speak. By the time he um’s and ha’s in his usual way nobody will know what he is advocating anyway.
      In terms of what Meridian could do with the energy the best thing for them would be to close down the horribly inefficient power generation from the wind turbines at Makara, near Wellington.

  7. ianmac 7
    2 April 2013 at 10:54 am

    Rod Oram (and Tim) discussed the smelter situation in his cool credible way with Katherine this morning. The smelter is in dire straits esp since China is developing huge aluminium resources.
    http://podcast.radionz.co.nz/ntn/ntn-20130402-0909-rio_tinto_rejects_governrnent_offer_of_subsidy_for_tiwai_point-048.mp3

  8. Murray Olsen 8
    2 April 2013 at 11:18 am

    This suits NAct because “circumstances beyond their control” will mean they will be able to sell Meridian to their mates for an even cheaper price. They’d give it away if they could. They don’t give a stuff about paying down debt, or anything else besides shifting the resources of the country into private hands. It wouldn’t surprise me at all if they’d known this would happen with the smelter and chose this as the optimum time to go ahead with the sales.
    I just wish Labour would try to look after the people it claims to represent in the same way that NAct look after their mates, but instead we see a bunch of seat warmers whose vision for the country doesn’t extend past a safe seat or a job in Parliamentary Services for themselves and a few hangers on.

  9. Matthew 9
    2 April 2013 at 11:27 am

    Rio Tinto is contracted to buy power for a while yet. A wise govt would tell them ‘Ok close down if you want, but keep paying for the power, & clean up the site, as stated in your contract’.
    The govt actually holds all the cards here, they just dont know how to play their hand.

    • lprent 9.1
      2 April 2013 at 1:57 pm

      Exactly. There will get opt-outs in the contract. But basically this government are somewhat craven when it comes to dealing with corporates.

    • infused 9.2
      2 April 2013 at 2:49 pm

      Pretty sure they do, and that’s what they are doing.

    • Foreign Waka 9.3
      3 April 2013 at 7:46 pm

      Unless they play us. These strategic plans are years in the making and no amount of negotiation will change this (read second sentence below). I agree with you Matthew- just have them close and pay up.

      “On January 20, 2009 Rio Tinto Alcan announced plans to close the Beauharnois smelter and reduce output from the Vaudreuil refinery; both facilities are in Quebec. It is part of a larger plan to reduce aluminum output by a further 6% (following a cut of 5% in late 2008), while cutting 1,100 jobs worldwide. The company will also sell its half-interest in the Chinese Alcan Ningxia joint venture.[4]

      Rio Tinto sold assets from Alcan, including Alcan Packaging, in 2009, and Alcan Engineered Products in 2011. Alcan Packaging was acquired by Australian packaging giant Amcor.[5]

      After the union’s contract expired on December 31, 2011 the company has locked out nearly 800 employees at its smelter plant in Saguenay-Lac-Saint-Jean, Quebec since midnight of the end of the year. The action was following nearly 3 months of unsuccessful bargaining and the further plant operations will be handled by the staff.[6]
      Alcan owns or has an interest in 22 smelters in 11 countries and regions.”
      http://en.wikipedia.org/wiki/Rio_Tinto_Alcan

  10. millsy 10
    2 April 2013 at 11:31 am

    There is an elegant solution to all of this. Retro and un-PC, but elegant.

    1) Pacific Aluminum (PA) buys the Manapouri Power Station (MPS) (and the tranmission lines between it and the smelter). This has the advantage of bringing its power generation in house, without the need for these shady deals. PA will have complete control over its power supply, and will be able to sell surplus electricity into the grid from time to time.

    2) RT’s share is sold to local interests. Not too sure what the Japanese want to do with their share, but they seem to be happy enough to hang on, and nothing wrong with some Japanese expertise. They seem to have a long term view about things…

    3) Tiwai Point alumiumum is marketed around the world as a product that is produced using environmentally friendly hydro generation, as opposed by Chinese aluminium which is produced by dirty filthy coal.

  11. prism 11
    2 April 2013 at 11:40 am

    Rod Oram said, I thought, that losing the smelter wouldn’t mean a great loss to NZ income which is not so high after the costs of material, inputs etc were taken out. He seemed to think that the cheap electricity would be better used in other businesses. Haven’t had time to listen again on ianmac’s link, thanks. But this is surprising to me as I thought that the smelter and the exports were vital to our earnings.

    Another speaker earlier in Radionz 9tonoon said that the smelter was very effective with the machinery that it has, made such pure aluminium it had a niche market supplying special interests, I think for scientific needs was mentioned.

    • Ennui 11.1
      2 April 2013 at 12:14 pm

      Oram is right, the price of aluminium is set to crash, and longer term it will yoyo. Interestingly aluminium is hugely energy intensive to smelt: fast forward to a post carbon age hydro will be the only way of smelting this. Which should change our negotiating stance with Rio Tinto.

      On the issue today the whole affair definitely has the potential to crash the price of electricity proving that artificially created markets in a small country are ridiculous ideological nonsense. The sale of Mighty River is decidedly compromised as a way of generating cash to pay government debt, but conversely the “rentiers” lining up will be onto a bargain. The whole affair reeks of incompetence and venality.

      • Colonial Weka 11.1.1
        2 April 2013 at 5:21 pm

        “Interestingly aluminium is hugely energy intensive to smelt: fast forward to a post carbon age hydro will be the only way of smelting this. Which should change our negotiating stance with Rio Tinto.”

        In the post-carbon age we will need hydro generation for far more important things that aluminium smelting. Hydro is a limited resource.

    • lprent 11.2
      2 April 2013 at 1:55 pm

      But this is surprising to me as I thought that the smelter and the exports were vital to our earnings.

      Nope, it never has been. The bauxite comes from aussie and as far as I can tell the ingots go back there at a level carefully designed to ensure that very little of the nett revenue – nett costs winds up as taxable profit. Mostly when people talk about NZAS they’re talking about $1 billion revenue – not taxable profits.

      As far as I am aware we don’t use aluminium from the smelter in any local industries except at a token level. Instead we mostly import rolled aluminium from aussie.

      Meanwhile it sucks up considerable amounts of power at a rate that barely covers the cost of producing it, let alone the capital that is tired up in the power generating plant. Which is what the current debate is about. As far as I can tell NZAS wants NZ Inc to sell it at below the cost of production.

      They seldom buy products from NZ locally produced suppliers. Part of that is because we don’t have the industrial infrastructure these days to provide anything much, and partially because they can freight heavy gear directly to their own port.

      About the only contribution that NZAS provides to NZ is the taxes on Invercargill wages bill. The effective level of subsidy on those workers salaries is exorbitant. Since the plant is old and rapidly heading to obsolescence it really is only a matter of time before it gets shut by economic competition from more advanced and efficient plants elsewhere closer to their primary markets.

      Basically they are wasting a valuable resource as far as the NZ economy is concerned. Time to shut it down was when the contract was last negotiated with Meridian. Now will do.

      As it is, even ignoring greenhouse gas issues, we could pay every current worker at the smelter a direct payment for a few decades after shutting the smelter and still make money on the deal.

      • Draco T Bastard 11.2.1
        2 April 2013 at 2:25 pm

        As far as I am aware we don’t use aluminium from the smelter in any local industries except at a token level. Instead we mostly import rolled aluminium from aussie.

        According to the NZAS website 90% of the aluminium they produce is exported and the other 10% is used here. How much we import isn’t listed.

      • Ennui 11.2.2
        2 April 2013 at 2:33 pm

        You are so right: shut the buggers down. They will be back in a few years when they cant get smelting at a cost effective rate due to fossil fuel depletion anyway.

        There is an unspoken concept in your comment that is long out of vogue: balance of payments….for those too young to remember our imports before Roger had to be paid forso the government took a strong hand in ensuring we were unable to go far into the red. It also meant that our currency was pegged to production and sales value of exports…not some nebulous idea on a forex traders floor. These things too are set to return.

        • Colonial Weka 11.2.2.1
          2 April 2013 at 5:19 pm

          “You are so right: shut the buggers down. They will be back in a few years when they cant get smelting at a cost effective rate due to fossil fuel depletion anyway.”

          I was under the impression that once you shut the potlines down, it’s never going to be economical to get them up and running again (not sure what the physics/economics is there, nor if the equation changes in the face of climate change/peak oil).

          • Draco T Bastard 11.2.2.1.1
            2 April 2013 at 8:10 pm

            I keep hearing that and yet it doesn’t make sense. They’d need to shut them down every now and then for maintenance.

          • lprent 11.2.2.1.2
            2 April 2013 at 8:58 pm

            An orderly shutdown is fine. They actually do that at least every few years because otherwise they can’t do maintenance on some of the refractories nor do upgrades.

            The reality is that there are ?what? 3 potlines. The best plan would be to progressively shut down the potlines over time to reduce the impacts for both NZAS (they have forward contracts to supply as well as forward contracts for electricity) and for invercargill. Not to mention that plant would have to be decommissioned, which is going to be a lot easier and cheaper to do progressively over a decade than any kind of abrupt stoppage.

            • Colonial Weka 11.2.2.1.2.1
              2 April 2013 at 9:15 pm

              4 I think. http://en.wikipedia.org/wiki/Tiwai_Point#Aluminium_smelter

              “They actually do that at least every few years because otherwise they can’t do maintenance on some of the refractories nor do upgrades.”

              But presumably that’s not all 4 at once, or even several of them at once.

              • lprent …
                2 April 2013 at 9:24 pm

                Nope – one potline at a time last time I looked. Used to be a pretty major event decades ago when I was working at Kamo Green Refractories.

                • Colonial Weka …
                  2 April 2013 at 9:47 pm

                  That makes sense. It was Ennui’s suggestion that RT could come back later if the smelter was shut down now that didn’t make sense. If all 4 lines were shut down, it would be uneconomic to restart the smelter as a whole. Would be interesting to see the actual explanation of that though, and how much power it would take.

                  • lprent …
                    2 April 2013 at 10:00 pm

                    They could (apart from the mothballing issues – which are significant) progressively shut down the potlines. They can also progressively restart them.

                    The real problem is that once they lay off their skilled workforce, then that is a damn sight harder to get restarted because they move away. That is what could make the case for relatively short-term subsidy to get over a hump in the commodity prices.

                    The real issue about the smelter is on timescale. What gives anyone any idea that there is a brighter future for the smelter commercially? Because I can’t see one. The plant is getting older and progressively less economic and has been doing so for decades.

                    I think that if we start to subsidize it further it simply adds a non-productive anchor on the economy for decades to come. But if we move the current corporate subsidy money and the power to other purposes we’re more likely to find better and more productive uses for them.

                    BTW: I think it is 3 potlines unless they added something when I wasn’t looking.. It is interesting looking at the varying measure of employment around. For instance http://en.wikipedia.org/wiki/New_Zealand_Aluminium_Smelters_Limited has

                    In 2009, approximately 750 full time personnel were employed, and 120 contractors

                    And yet the page that they references was re-picked up in 2011 with a definition of

                    …2,400 full time equivalent jobs…

                    And the current front page for NZAS says

                    …3,200 full time equivalent jobs…

                    Ummm must have been a hell of lot of hiring over the last 3 or 4 years or there is a awful lot of overtime being done or someone has been doing a bit of fanciful jobs inflation

                    Idiots… BTW: I understand that the actual number of people actually employed is closer to a thousand

                    • Colonial Weka …
                      2 April 2013 at 10:05 pm

                      hmm, ok but those are labour issues not physics ones. Are you saying that you think that there is no economic/physics issue with later restarting 4 potlines (even progressively). I thought the issue was the amount of power needed to get them up and running again, but could also believe that is an urban myth.

                    • Colonial Weka …
                      2 April 2013 at 10:07 pm

                      Although thinking about it, it was about sudden shutdowns, which is what you are meaning I think.

                    • lprent …
                      2 April 2013 at 10:19 pm

                      Yeah – if you have a sudden shutdown then you wind up with cold aluminium in the pots..

                      It is really really difficult to get that going again. In fact I suspect is usually easier to dump the pots contents with a jackhammer and put in new refractories and electrodes whilst tossing the pots that got warped. Call it at least 3 months work.

                      That is why aluminium plants are so paranoid about their power supply reliability.

  12. Ad 12
    2 April 2013 at 11:42 am

    Not sure why Eddie has any sympathy for National on this one. The choice was Intervene, or Not Intervene. Both options seriously damage the asset sales process. Boo fucking hoo.

    Since Key is now a fabulous neo-interventionist on behalf of Hollywood, Solid Energy, South Canterbury Finance, Sky City, and Rio Tinto, I am sure his next intervention will be an actual plan for the Southland economy as it braces to see its smelter shut down. If Labour had such a plan right now they could speak with leadership on what a really “hands on” economic manager Labour should be. Although they would need someone who could actually talk like they could put a deal together.

    I also wish everyone would stop thinking retail electricity prices would go down once the Meridian load is not wanted. They won’t. A massive new cable and DC link from Manapouri to over Cook Strait will require shifting the whole AMP of Transpower for a few years. The Electricity Commission will see immediately that the price has to deal with that network build.

    And shutting Huntly Power Station down is in reality shutting Huntly the town down. Pretty glorious the way people want to change to something more sustainable, when Huntly station is glaringly not. But Huntly’s workers deserve an economic recovery and development plan, just like Invercargill and Westport – apparently the only areas that need shots in the arm are Canterbury (SCF and rebuild, Auckland central (Sky City), and Wellington (Wingnut).

    • Lanthanide 12.1
      2 April 2013 at 11:51 am

      I also wish everyone would stop thinking retail electricity prices would go down once the Meridian load is not wanted. They won’t. A massive new cable and DC link from Manapouri to over Cook Strait will require shifting the whole AMP of Transpower for a few years. The Electricity Commission will see immediately that the price has to deal with that network build.

      For those of us in the South Island they likely will. The thing with hydro stations is that the water is in the dam anyway – either you run the water through the turbines and make power, or you send it down a spillway and don’t make power.

      In CHCH I have a 3-way meter (courtesy of Powershop) where I get night rates at about 55% of the normal day rate, and also a cheaper weekend-day rate that is 85% of the normal day rate. With the smelter using 1/6th of all NZ’s power, and that power “having to go somewhere”, it seems likely my electricity prices could drop by quite a bit with the excess capacity. Similarly you can bet that if the smelter does have to close, that southland will be saying “well we should get lower power prices to help build our businesses up”, and obviously if the rest of the network in the SI can’t cope with the new distribution load, then it would need to be used locally.

      • Ad 12.1.1
        2 April 2013 at 11:59 am

        The bet is on.

      • Foreign Waka 12.1.2
        3 April 2013 at 8:07 pm

        And with that the plan to have no wood fired but electrical heating and perhaps even electrical trains can become reality. A win win for the environment and the people. Imagine….

    • lprent 12.2
      2 April 2013 at 12:12 pm

      A massive new cable and DC link from Manapouri to over Cook Strait…

      Bullshit.

      Transpower are already in the throes of finally upgrading the HVDC lines over the Cook Strait on pole 3 and due for completion “early 2013”.

      See https://www.transpower.co.nz/projects/hvdc-inter-island-link-project#zoom=7&lat=-41.1513&lon=174.982&layers=TB

      Assuming that NZAS decided to shut down now, they are responsible and liable for decommissioning of the smelter. That means the pot lines probably won’t even shut down before we finally get the upgraded capacity on line.

      It may push the proposed pole 4 to done on time in 2016. But that would be for security of supply rather than actual current requirements.

      The only work that I’m aware of that would have to be done is to connect Manapouri to the grid. That would largely go to supply the SI while allowing power generated further north to go further north.

      And why would anyone go for gold-plated engineering like running a DC line the length of the SI

      • Ad 12.2.1
        2 April 2013 at 12:38 pm

        Would be good to see if Pole 4 could take the anticipated extra load if Tiwai Point does shut down and redirects it all north where the demand is.

        The “gold plating” is to ensure that the 30-40% of generation is not lost sending this unused power from Manapouri to Auckland/Hamilton/Tauranga. The point isn’t to just attach Manapouri to the grid, and generate electricity for New Zealand and see it wasted in transmission. The point is for a buyer to buy it and pay for it.

        • lprent 12.2.1.1
          2 April 2013 at 2:10 pm

          You wouldn’t send power all the way north from Manapouri. You’d use it to replace power currently used in the SI – especially in ChCh and the southland/Canterbury plains.

          The generation capacity further north in the SI would be what was going over the Cook Strait. You have to remember that at present the flows of power over the Cook strait are bidirectional, and at present we are frequently sending power from the lower NI to the upper SI.

          Ummm can’t dig out figures at present (at work). However you should have a deeper look at the reasons behind the North Canturbury tap http://en.wikipedia.org/wiki/HVDC_Inter-Island#North_Canterbury_tap

          If the increase in irrigation in the SI keep increasing at the rate that they have been, then having a large source of power in the lower SI is going to get pretty useful. If only to reduce the flow of power from the NI to the SI (for some reason many people seem to still think that we are in the power position we were a few decades ago)

          • Ennui 12.2.1.1.1
            2 April 2013 at 2:36 pm

            We might do well to utilise the extra capacity prevent capital investments in power generation elsewhere… this capital could be better spent converting the network grid to carry power less wastefully (i.e lowering the loss in transmission over distance).

          • erentz 12.2.1.1.2
            2 April 2013 at 3:30 pm

            You wouldn’t send power all the way north from Manapouri. You’d use it to replace power currently used in the SI – especially in ChCh and the southland/Canterbury plains. The generation capacity further north in the SI would be what was going over the Cook Strait.

            Grids don’t really work like that though. Power isn’t directed, if Transpower tells a power generator to start generating, that power is fed into the grid it goes everywhere. There are two semi-separate grids in New Zealand. The North Island Grid and the South Island Grid. These are connected by the HVDC link.

            So what would likely happen is that the peak prices will continue to be high, but we might end up having periods, e.g. night time where power is nearly free. If we reverted to a system where we had an “ECNZ” replacement manage the power system planning, and buying from generators to meet demand in line with their plan, we could probably lower that peak price quite a bit too. This would make a good time for Labour/Greens to announce such a plan for removing the “electricity market” and re consolidating remaining assets into a new “ECNZ” which will buy all electricity from generators on contracts.

            • Draco T Bastard 12.2.1.1.2.1
              2 April 2013 at 5:05 pm

              This would make a good time for Labour/Greens to announce such a plan for removing the “electricity market” and re consolidating remaining assets into a new “ECNZ” which will buy all electricity from generators on contracts.

              That’s sounds confusing and thus expensive. Just have the new ECNZ own all the lines and all the generators and then they get to intelligently utilise those assets for our benefit.

              • erentz …
                2 April 2013 at 7:00 pm

                Not sure if it was unclear that I meant the existing govt generators go into new “ECNZ”. I don’t think it’s worth it to buy back the private generators at this time though that could be explored. Buying their power on contract, which will net them a much lower price than they’re currently getting because they won’t have a flawed market to abuse, isn’t at all complicated. Over time the new “ECNZ” will build most if not all of the major new generation in NZ as this will probably be cheaper over the long run than contracting it from private builders. These new generators (wind, tidal, solar, geothermal) will supplant much of the private generation in terms of proportion. Many existing private ones will lose their contracts as they’re no longer needed. In the future buy back any that are interesting at a discounted rate.

                Also, we still want to allow small microgrid style private generation — people who put solar on their roof selling back into the grid. Small scale hydro or wind on the farm. Etc. At the moment this is/can be accomplished by the local lines companies doing the paying. They sit in between the grid and houses and are currently metered by Transpower. But in a smart grid future who knows what kind of control the “ECNZ” might want to have so the “ECNZ” to small generator relationship may get closer. We may see an interest in buying back the local lines at some point too as it becomes apparent that pubic ownership works better for such things. (Hopefully we haven’t gone the other direction and also sold our water by then, few more years of NAct and that wouldn’t surprise me).

                • Draco T Bastard …
                  2 April 2013 at 9:44 pm

                  Ah, so, have ECNZ own all the present government owned ones and to trash the privately owned ones through market dominance.

                  Sounds fair – they’ve been doing the same thing to government for the last 40 odd years.

          • Peter 12.2.1.1.3
            2 April 2013 at 3:55 pm

            Manapouri is on the grid. Two double circuit 220kV lines heading to separate substations in Invercargill, with lines then going from there to Tiwai. There are two 220kV lines heading out of Invercargill to Roxburgh, and another one heading to Dunedin. So, there’s a bit of work in reconfiguring the grid to cope with the change in flow, but it’s not beyond possibility, and Transpower say that they can have it done in a few years (which is about the time that Rio Tinto have left anyway, on their current contract).

            • Ad 12.2.1.1.3.1
              2 April 2013 at 6:14 pm

              I don’t like the idea of simply redistributing unneeded electricity to the first idea New Zealand can come up with.

              I think it is simply cruel to the people of Huntly, Invercargill and Bluff to say “don’t worry there’s a few projects out there – it’ll all fix itself in a few years.” That’s just dumb laissez-faire economics. This is too big for that.

              Labour used to be a party that put workers and employment number 1 on its reason for existing. Cosgrove is certainly right to say that National should have seen this coming and in particular how it will damage the asset sale process. But this situation needs more than schadenfreude.

              I certainly don’t buy that just because one version of government intervention is likely to fail, then we may as well not do anything to soften the impact of major power generation on New Zealand workers.

              Saying that there may/may not be a price benefit is like saying there may/may not be a benefit to you of a tax cut. Hey great, but the economic price of that minor reduction is simply massive economic damage. Why aren’t the interests of workers and regions, rather than consumers, put front and centre in this debate?

              • Lanthanide …
                2 April 2013 at 6:23 pm

                “Why aren’t the interests of workers and regions, rather than consumers, put front and centre in this debate?”

                Where has anyone on this site suggested that we shouldn’t put the workers and the region front and centre?

                • Ad …
                  2 April 2013 at 6:29 pm

                  Checked out the number of people on who say “Just shut it down”. And the number who say “Just shut Huntly down as well”? Did you check out the entire discussion from LPrent yesterday which just couldn’t wait for the shut down and the price rises to come?

                  Where have you been?

                  • Colonial Viper …
                    2 April 2013 at 6:35 pm

                    How many said “shut it down” and “leave the workers and towns with no options and no help”?

                    • Ad …
                      2 April 2013 at 6:53 pm

                      So tell me CV, where are the columns here about defending the rights of workers to a job? The EPMU says 2,000 Southland families have their economic futures at stake.

                      Anyone checked out the state of Huntly recently? Its prospects for employment, community opportunities for a young people, its Deprivation Index? Clearly the people commenting here advocating to shut it down don’t have jobs in Southland or Huntly. And on another debate, same site, we get to complain about Fonterra wanting its own reliable coal-fired boiler generation. Westport and Hokitika got an economic development plan when Labour shut down native milling. What’s so different here?

                      Huntly and Bluff, together the worst real estate value decreases in the country.

                      So no, instead we get happy thoughts about converting us all to electric cars, or bringing the price of electricity down generally. Seriously is that what passes for an economic development plan these days?

                      We’re not changing to electric cars, we’re not inventing any massive electricity-using replacements fast, and the growth industry in Southland isn’t anything except dairy. We need to face the risk squarely as if we were a country not a random bunch of atomised comsumers, and do what any pre-1984 Labour government would have done: get a plan for the short, medium and long term, and be held to delivering it. Jim Anderton or Bill Sutch would.

                    • lprent []
                      2 April 2013 at 8:48 pm

                      Jim Anderton or Bill Sutch would.

                      Bullshit. Both were interested in economic development.

                      Neither were into permanent economic dependence on subsidies from taxpayers from the rest of the country. They wanted to put subsidies in to raise industries. Neither were particularly into propping up dead ones. I suggest you spend more time reading what they wrote rather than indulging in fantasies about what you thought they should have said.

                    • Draco T Bastard …
                      2 April 2013 at 9:33 pm

                      Well, I’d put in place policies that support the workers:

                      1.) Government housing loans at 0% interest and charged as a percentage of household income. This ensures that they won’t lose their house or their ability to feed and cloth their family.

                      2.) Secondly I’d put in place policies that allow them to easily retrain if needed such as: a) removal of student fees b) payment of a universal income c) building more formal tertiary institutes and d) building my suggested Learning Centres.

                      3.) I’d probably buy the smelter but, as I said, I’d close most of it down and only keep enough of it going to produce the aluminium that NZ uses. On top of that I’d develop NZs own bauxite extraction and a strict recycling regime.

                      4.) I’d put in place a lot of R&D and build factories so that we can produce a lot more of what we need from our own resources.

                      I’ve been saying these sorts of things for a long time and they’re not area specific. Just things that need to be done to stop the rot that neo-liberalism has brought with it.

                  • lprent …
                    2 April 2013 at 8:26 pm

                    :-?. I didn’t leave any comments yesterday. In fact I didn’t even leave any notes as moderator yesterday.

                    Yep. Just checked.. http://thestandard.org.nz/?s=lprent&isopen=block&search_comments=true&search_sortby=date

                    You must have had a hard day – your time sense is dead. Perhaps you should look to your own grasp of the spatial 😀

                    Now you were saying….

              • lprent …
                2 April 2013 at 8:45 pm

                That’s just dumb laissez-faire economics. This is too big for that.

                Personally I’d be all in favour of providing a centralised plan for power generation and distribution – the current system sucks in any economic basis. Since the flogging off of parts of the system it has proved to be even worse at efficiency of matching up supply and demand compared to the previous system, and a damn sight more expensive as well. Just look at how long it took for Transpower to do anything effective on the Cook strai

                However if we have a “market” system even with all of the effective natural monopolies in it, then the only effective way that the government has of influencing the market is by not subsidising waste. The best way of doing that is to be very cautious about providing corporate welfare.

                Now the thing is that directly subsidising the workers in those places will be at least an order of magnitude cheaper than maintaining people in jobs purely to subsidise corporates. And in the end the subsidies will eventually be removed for purely economic reasons at some point because those subsidies will always wind up increasing.

                Hey great, but the economic price of that minor reduction is simply massive economic damage. Why aren’t the interests of workers and regions, rather than consumers, put front and centre in this debate?

                Which essentially means that you still haven’t bothered to think it through.

                Here is a question? Tell me how long we as a country stop paying corporate welfare for these two uneconomic enterprises. What is the route out of it. Because I cannot see one. The economic problem for both of them isn’t transient – it is structural. Neither the smelter nor huntly are economic. So should we carry on training people to be dependent on a completely uneconomic behaviour that will always require propping up? According to you we should….

                I don’t think that we should. I think we should use the money to do something more productive with those regions and workers.

                • RedLogix …
                  2 April 2013 at 8:56 pm

                  Lynn,

                  I know this has been brought up before, but why not just nationalise the smelter for $1, turn it into a division of Meridian?

                  The cost of the electricity would effectively be zero making it one of the most competitive smelter’s in the world.

                  • Colonial Viper …
                    2 April 2013 at 9:26 pm

                    Vertical integration is verboten! Verboten I say!

                    • mickysavage …
                      2 April 2013 at 10:24 pm

                      My choice for an alternative use of the power and the smelters?

                      Rail.

                      Reopen the Hillside workshops. Get a modern smelter happening somewhere in the bluff where the steel can be produced and then keep your fingers crossed.

                      As for Huntly, I am not sure what to propose …

                  • lprent …
                    2 April 2013 at 9:48 pm

                    The real question is why would we need it? It is uncompetitive compared to alternative closer suppliers to the Japanese market which takes most of it. Reducing the cost of the power would help. But basically it has been steadily becoming more and more uncompetitive for decades because of the relative transport costs. Effectively we’d be competing with new suppliers that are a lot closer to the markets as long distance transport costs (bauxite from aussie, ingots to Japan) keep slowly rising. And against competitors with much better scales of economy.

                    Looking at it as a basis of a local industry is even worse. The plant is optimized to produce a high purity grade of primary aluminium (ie ingot) that is used for industries that we simply don’t have here. That is why we import most of the aluminium for this country from Austrailia in the forms that we need – ie rolled, extruded, drawn, or whatever along with a alloying plant. We’d have to add all of that plant to the existing complex to be useable. And NZ can only take a 5% at the very best of a single potline (and that’d be a hell of a growth in aluminium usage here).

                    We’d be better off looking at the steelworks and figuring out how to make build industries around that. That at least isn’t built around a failing export market.`

                    • geoff …
                      2 April 2013 at 10:00 pm

                      Yes I agree.

                    • RedLogix …
                      2 April 2013 at 10:03 pm

                      Energy represents about one-third of the total production cost of primary aluminum.

                      I’m certain that if Rio got their power for zero the smelter would stay open.

                      Especially if you consider that at some stage in the future competitive plants run on coal-powered electricity are going to be legislated/taxed out of the market by compelling climate change considerations.

                    • Arfamo …
                      2 April 2013 at 10:11 pm

                      Can Tiwai be converted to steelworks?

                    • lprent []
                      2 April 2013 at 10:47 pm

                      The plant? No. Completely different setups.

                      The port yes. Power – depends on what parts of the steel making process are done. Electric arc furnaces are used for producing secondary process of steel making but are of little use for producing basic steel from pig iron or the pig iron from ore.

                      But there is a reason that steel mills are situated very close to their sources of ore. Iron ores are usually at least double the density of bauxite. I really don’t think that shipping the northern iron sands accumulated from the northern volcanics down the west coast from somewhere like taranaki to a plant at bluff is going to be economic. And I’m unaware of any other concentrated large iron deposits suitable for making steel in NZ. Ummm some smallish deposits of limonite in nelson…

                      And then shipping the products northward or offshore… Transport is always a killer with smelting

                    • lprent …
                      2 April 2013 at 11:06 pm

                      I’m certain that if Rio got their power for zero the smelter would stay open.

                      Yes it would.

                      But reputably the power is already down at ~4.5c/kW which I suspect makes it about the cheapest reliable power source available to any aluminium plant worldwide

                      Energy represents about one-third of the total production cost of primary aluminum.

                      What they don’t mention in there is that is an average across the industry. NZAS is not your average smelter. It’s main constraint isn’t the cheap power, it is the susceptibility to transport costs.

                      The problem is that Tiwai is about 4000km+ to its source of raw materials in WA and 9000km+ from its major market in Japan. The cost and energy in that is significant bearing in mind the rapid rise in fuel costs. Furthermore the emissions aren’t exactly light either. What would you bet on the costs of transport fuel in the future? Or the emission costs of burning fuel oil or coal from transport? And I think you’d be pushing your luck to build large sailing transport with megatonnes of ingots in their holds.

                      And of course the Chinese along with their production of coal and gas powered stations are also busy building sources of hydro, wind and geothermal power both in their own country and in those of their neighbours at a furious rate.

                      It is just that hydrocarbon plants take a lot less time to put in place than the dams, geothermal fields, and above all – the grid that supports them. You can site hydrocarbon plants close to need without a large grid and they take a lot less initial capital.So they go online first. This is a familiar development pattern during a economic bootstrap.

                      I’d expect that the composition of chinese electricity will change markedly over the coming decades

                    • Draco T Bastard …
                      2 April 2013 at 11:22 pm

                      I really don’t think that shipping the northern iron sands accumulated from the northern volcanics down the west coast from somewhere like taranaki to a plant at bluff is going to be economic.

                      New Zealand Steel Ironsand Export Shiploading

                      Almost 80 million tonnes of sand has been mined and 43 million tonnes of titanomagnetite exported to date.

                      According to that article some 2 million tonnes per year is exported.

                    • lprent []
                      3 April 2013 at 12:37 am

                      Yeah but… note what it is being used for.

                      Ironsand concentrate (titanomagnetite) is a low grade iron ore (~57% Fe) and thus it is inherently of low value. Also because of its chemical characteristics the market is small (less than 2M t pa) and currently confined to Japan/China/Taiwan where it is used as an additive to blast furnace sinter feed.

                      Additives for the much larger main iron feed and presumably for producing specialised types of titanium steels. NZ just happens to have some of the best deposits in the world of this type of sand and that one sand dune area at Tahora damn near supplies the world with its annual demand.

                      http://www.nzsteel.co.nz/about-new-zealand-steel/operations/taharoa-mine-site

                      We also ship certain types of coal from the west coast of the SI to Japan for much the same reason. It is used as an expensive part of the mix to produce high grade steels.

                      The actual production of iron at Glenbrook uses a much cheaper transport – the slurry is pumped 18km from North Head to the mill.

                      http://www.nzsteel.co.nz/about-new-zealand-steel/operations-/waikato-north-head-mine-site

                      But also consider this. The 1.2 million tonnes of iron sand ore (ie after separation) sent down that pipe is married up with coal from less than 80kms away to produce ~650k tonnes of rolled and/or galvanised products. The cost structure for that is a hell of a lot easier than shipping all the way down the islands and getting coal from a damn sight further away (the local lignites are pretty useless for steel).

                      http://www.nzsteel.co.nz/about-new-zealand-steel/operations-/glenbrook-steel-site

                      Then consider that Glenbrook currently provides 90% of the local steel market (Pacific Steel with its scrap operations provides most of the rest) – of which most goes to a city that the plant is on the outskirts of. And they still export something like 60% of their production as pretty high value product from a port that is a thousand or more kilometres closer to the markets. The production exported from Glenbrook doesn’t have that much profit margin, it is the local consumption that tends to make the money.

                      There are bugger all imports of steel into NZ apart from finished speciality products. So the market is pretty well catered for.

                      So tell me, what natural advantages would a Bluff site offer. Cheaper power for secondary steel production isn’t that big a part of the process. Labour costs isn’t a major component. And how are they going to grow a local steel market that can’t consume the existing local production to offset transport costs to export markets? Their cost structure would never be able to compete against Glenbrook even if you removed the capital costs from consideration.

                      It really isn’t that feasible.

                    • RedLogix …
                      2 April 2013 at 11:26 pm

                      But reputably the power is already down at ~4.5c/kW

                      But Manapouri produces power for far less than that. The marginal cost of running it is almost zero, and the capital must have been written down to almost nothing as well by now.

                      If Meridian owned Tiwai it would have the opportunity to turn zero cost electricity into very competitively priced aluminium. If nothing else it may well extend the life of the plant several more decades.

                    • lprent []
                      2 April 2013 at 11:51 pm

                      …the capital must have been written down to almost nothing as well…

                      Unlikely. They only put it in 40 years ago and the money on those kinds of developments is amortised/paid back over periods that usually start at about 50 years. Because the plants once constructed are so long-running it makes sense to fund them on very long terms.

                      From memory it was upgraded it in the late 90’s with the second tunnel that opened in 2003 (?). Since then they have done an expensive upgrade on the generators. Those will also have been treated as a capital expense because they won’t have paid the original capital at that point.

                      They will have to do another generator overhaul in another couple of decades. Ideally that would be factored into the current costs of power generation so as not to require such a large capital injection (but I’ll bet that it isn’t). And of course there will always be the lines maintenance away from the plant.

                      The running costs are low, but not nil. There will be fairly extensive engineering staff that work on the site for maintenance and clearance and of course the subsidiary equipment and plant will forever being repaired and upgraded. The cost of capital costs are still there for decades.

                      I’d guesstimate that the effective running and capital costs over next few decades to be on the order of at least 2c/kW at their 4500+GW annual generation depending on how you accounted for things. It should be closer to 3c.

                    • Tim …
                      2 April 2013 at 11:37 pm

                      “As for Huntly, I am not sure what to propose …”

                      … a railway workshop perhaps?

            • lprent 12.2.1.1.3.2
              2 April 2013 at 9:15 pm

              I wasn’t sure if they’d put it in as DC lines. The distance is short enough and that is what is required at the cathodes and anodes. So they must rectify the current near the smelter instead..

              Yeah. It’d take time to shutdown the plant anyway. I probably need to refresh my geography and topography of the area so I can have a think about transmission distances. I was just trying to figure out if there’d be any advantages heading lines north east and cutting the corner.

              • Peter …
                3 April 2013 at 8:51 am

                Lynn, I know the area well, having worked on the upgrade project for Manapouri some years back.

                They do rectify the current at the smelter, using thyristors. Transpower supply the smelter directly – there is no electricity retailer present.

                You can’t cut the corner easily, due to the topography (mountains and a large scenic lake) – the best way out of Fiordland is the current transmission corridor, up the Grebe Valley and down to the Southland plains via the Borland Valley. From there, yeah, you could go straight across and up, but that would only save at best about 100km of line, and would need new substations etc.

                I’ve argued before about converting one of the existing lines to DC, but you would run into trouble further north around Roxburgh. There’s no way but to build new capacity, most likely duplexing or triplexing existing lines.

    • Jenny 12.3
      3 April 2013 at 10:15 pm

      And shutting Huntly Power Station down is in reality shutting Huntly the town down.

      Huntly is a wreck because of the coal mines and the power station.

      Apart from some bribes to sports clubs and Marae these industries give nothing to Huntly.

      Huntly is one of listed WINZ black spots where because of the lack of jobs beneficiaries are not allowed to move there on pain of having their benefit cut off.

      Coal mining, particularly open cast is (relatively) not labour intensive.

      Wind technology however is very labour intensive. That is why it is so much more expensive.

      Huntly would be a good place to set up Wind generation manufacturing.

  13. freedom 13
    2 April 2013 at 12:10 pm

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10874850
    http://www.stuff.co.nz/national/politics/8496789/Smelter-firm-subsidy-talks-stall

    which story is true?
    did Key call their bluff or did Rio Tinto walk away ?

    then right on cue this morning, almost as if it was designed to dampen the growing expectations of fairness in electricity prices, there is this
    http://www.stuff.co.nz/business/industries/8495520/More-power-price-hikes-tipped

    • freedom 13.1
      2 April 2013 at 12:59 pm

      can someone point us to a clear explanantion of what contract Key thinks is being discussed?
      According to the latest piece by Stuff, Key says “They were locked into a three-year contract, with a further two-and-a-half year winding down provision,”

      yet, not so long ago, didn’t they just spend three years negotiating an eighteen year contract?
      from the NBR ” The smelter’s majority owner, Anglo-Australian minerals giant Rio Tinto, is locked into the first three years of an new 18-year contract which took effect from January 1, took three years to negotiate and had been agreed in 2007.

      have i got mixed up or is our MSM (not renowned for its fact checking) simply spinning a high stakes hank suitable only for the emperor’s new robes

      • Lanthanide 13.1.1
        2 April 2013 at 1:56 pm

        I think the 18 year contract applies to Australia.

      • Wisdumb 13.1.2
        2 April 2013 at 11:11 pm

        Key said clearly on Campbell Live tonight (2 April) that the contract was renewed on 1 January this year to run until 2030 i.e. 17-18 years. He also said that there was a take or pay period until 2016. This means that if Rio Rinto pulled out before the take or pay period they had to pay for the unused electricity anyway. He also said that if they pulled out now this take or pay sum would be a huge penalty.

        He also referred to period of 2 ½ years in which the production would be run down if /when Rio decided to pull out. This certainly allows time for Transpower to connect the Manapouri system to the national grid fully including the HVDC link. They have allowed $170 million for this and the work is well in hand, all as LPrent has indicated.

        So there is a grace period until 2016 at minimum when a government could bring in transitional supports for the declining workforce at the smelter and in all the other businesses in Southland dependent on the smelter.

        If Key was prepared to offer a short term subsidy to prolong the life of the smelter I suggest that he could use the same amount of money to support the workers around Southland that are inevitably going to be laid off or lose contracts. For a subsidy to be meaningful even if Rio Tinto rebuffed it, and remembering it was intended to be bridge the next few years until apparently the aluminium market turned around – I can’t see anything less than $50 million ever having been considered, more like $100 million I think.

        $50 – $100 million is not a bad sum to apply to developing alternative jobs, mortgage support, support new industries, as DTB mentioned in his 9.33 pm comment.

        Last time I looked NZ imports of aluminium products were $193 million (sorry can’t find the link but not far away). Not only is the alumina imported, which is an energy and technology intensive product so high value, but so are the synthetic cryolite (NaAlF6) as an essential flux and the petroleum coke or high grade carbon for the consumable anodes – say another $100 – 200 million. So when Rod Oram on Morning Report this morning said that the net export benefit from the so-called billion dollar exports is only around $200 million he is not far from the truth. Not to forget the devious transfer pricing that this criss-crossing of trade under one hat facilitates – Rio can generate a loss at the drop of a hat, wherever it thinks will help it most politically .

        For mine, Labour should devise a programme for job replacement, housing support, industry development, retraining, agricultural research, IT something – extremely difficult to find the jobs and industries I know, but smooth the pillow of a dying smelter in a dying industry.

        • Foreign Waka 13.1.2.1
          3 April 2013 at 8:27 pm

          Absolutely agree. Rio Tinto tries to get some mileage out of this and by 2016 just before “deadline” will drop the ball. By that time all the “Ma’s and Dad’s” have overpaid on shares that will then be worth next to nothing. And so another fleecing of the general populace with another wealth transfer would successfully be finalized. Besides the economic argument of 200 mil of net export benefit there is of cause some bigger fish that gets fried.

  14. aerobubble 14
    2 April 2013 at 1:00 pm

    Its a win-win for National, on the one hand Tinto may get a sweet deal and tax payers subsidizing the now partially govt owned energy company – i.e. sweet for buyers, crap for taxpayers.paying 100% of the subsidy to Tinto, but 49% of shareholders getting the benefit.

    And on the other hand, Tinto bails, Southland goes Labour and energy dividends from government other energy entities suddenly have cheap power pumping across from the south Island.

    Whichever way, the government loses money, locks itself in to losses, either subsidies.

    And it could have been so different, if they had not open the pandora’s box of privatization.

    As we know only Labour has the competence to support films, sell assets, and manage state owned companies, along with keeping govt debt down and an economy with on a path to a brighter future.

  15. Peter 15
    2 April 2013 at 3:50 pm

    Let it fail, and use the power for something that really benefits NZ – electrify our transport, and mothball Huntly.

    And get a decent plan in place to retain most of those skilled jobs.

    • infused 15.1
      2 April 2013 at 6:21 pm

      Keen to see how the left is going to spin this now.

      Donno why this comment went under yours.

      • aerobubble 15.1.1
        3 April 2013 at 2:17 pm

        Key once again jumps before having work through the consequences of his policies.

        Education.

        Solid Energy.

        50% for land in CHCH

        Not managing the deposit guarentee and SCF…

        the list goes on…

        now the head of the spy agency is a under qualified old mate from school days….

  16. SHG (not Colonial Viper) 16
    2 April 2013 at 6:50 pm

    Hey QoT and CV, you’ll love this from the erstwhile Sams and Tobys of the Labour Party:

    The Government is completely mismanaging the Tiwai Point negotiations and putting the jobs of 3000 people at risk, said Labour Leader David Shearer and SOEs spokesperson Clayton Cosgrove.

    David Shearer said: “The Government was warned months ago about the looming problems with Rio Tinto and Tiwai Point. They were told to sort the issue out before putting Mighty River Power on the market. They ignored those warnings and charged ahead to sell the assets.

    “Rio Tinto simply waited and now holds all the cards in its negotiation. The National Government is desperate to sort out the mess and is all over the place.

    “National’s initial plan was to shut their eyes and wish the problem away. Then they jumped into negotiations without telling Meridian’s Board what they were doing. Their final move was to make an offer and give up after a weekend of negotiations.

    “This is shambolic and toys with the economy.

    “The Government can’t just walk away. John Key must be upfront and honest with New Zealanders so we know what’s required to keep Tiwai Point open. Transparency is needed.”

    Clayton Cosgrove said: “John Key is playing his currency trader tricks but it’s putting jobs at risk. This isn’t Merrill Lynch; this is a country’s economy we are dealing with.

    “One day the Government is negotiating, the next it is not. Rio Tinto’s bosses are licking their lips and look forward to laughing all the way to the bank.

    “These are not cunning tactics by the Government. It’s financial mismanagement.

    “With Tiwai Point accounting for 15 per cent of the electricity market there is far too much uncertainty. The Mighty River sale must be stopped or it risks turning into a fire sale,” said Clayton Cosgrove.
    http://www.labour.org.nz/news/tiwai-negotiations-totally-mismanaged

    Poetry.

    • Ad 16.1
      2 April 2013 at 6:56 pm

      Mere schadenfreude that exposes Labour’s own policy vacuum.

      • Colonial Viper 16.1.1
        2 April 2013 at 9:33 pm

        Not so much a vacuum, as a neutron star.

        • xtasy 16.1.1.1
          2 April 2013 at 11:45 pm

          CV: Where now are Labour’s much pre announced “policies”, that I am still awaiting?/?

          We had the repeated comments and statements, and speeches by Shearer and others, last year, that bit by bit, the policies would be announced soon, and we would see how Labour would lead the way to form the next government.

          Now we had the Kiwi Build plan, which was partly taken to pieces re lack of land, lack of sections, wrong calculations and so forth, Len Brown in the end being asked to make the sections available, but what the bloody hell else has been presented?

          What about welfare, we are waiting on clarifications from Ardern and others, what about health, where Annette is now challenging Ryall, but delivering NO policies, what about all other areas of policies?

          Now, we are in April now, we are almost half way through another term and we are WAITING desperately to hear what Labour actually want to do as an alternative.

          What the f*** is going on, please??

          This is no criticism of you CV, it is just to reconnect and remind you, that you must also be waiting, like so damned many of us. Hey, Labour, where are you???

    • Wayne 16.2
      2 April 2013 at 7:54 pm

      Actually Labour sounds pretty confused on this issue. It is not enough to say “Stop the sale of Mighty River Power”. The sale is going to happen.

      Clayton sounds he is totally focused on the short term hit, using slogans (well sometimes thats what you have to do, but is it enough beyond say next week).

      And does it sound good enough against John Key. Whether Standardnistas like or not most New Zealanders will think John Key has more economic nous than Clayton Cosgrove. And Clayton cannot bridge that gap by slogans.

      Frankly I have no idea what Labour would do, except they would not sell 49% of the SOE’s, but that is going to happen. Labour essentially lost that battle by virtue of the election result. Whether you think the Nats have a mandate or not they won the election and this was a key manifesto commitment.

      So would they negotiate or would they let the smelter close in 3 to 5 years. Different spokespeople seem to be saying different things. Do they think the smelter will close in say 10 years anyway, and is it worth stretching the closure from 5 years to 10 years?

      Now I know in Opposition you do not necessarily have to say what you do on all issues that come up, but on this issue Labour will be pressed for their alternative. It is simply too big an issue with too many jobs at stake.

    • infused 16.3
      2 April 2013 at 9:20 pm

      Sounds like more of the same crap to be honest. You could replace those words if National had decided to throw money at it and it would read the same.

      Mumblefuck. Describes Labour, not just Shearer.

  17. SHG (not Colonial Viper) 17
    2 April 2013 at 7:00 pm

    No, simple jealousy that me no good words enough to paint a picture of National charging ahead and jumping in all over the place and toying with its eyes closed as it walks away while Rio Tinto licks its lips on the way to the bank for a fire sale.

  18. RedBaronCV 18
    2 April 2013 at 8:19 pm

    And with respect to the sale of Mighty River, are the brokers now whispering not the “likely to be fully priced ” message of last week but the “highly risky – too many unknown factors”

  19. ianmac 19
    2 April 2013 at 9:08 pm

    An interesting John Campbell – John Key program.
    I am surprised at “no comment” here after Mr Key actually fronted for an interview with John Campbell tonight. Mr Key had a particularly wooden face tonight??? He avoided any questions about the possible effect of the smelter problem having an affect on the Asset sales. Totally lacking his bon hommie.sp?
    Not up on replay yet.

    • karol 19.1
      2 April 2013 at 9:21 pm

      It’s here. Yes, I thought Key looked especially serious and ducked some significant questions.

      • Colonial Viper 19.1.1
        2 April 2013 at 9:25 pm

        It would seem he has worse information than is generally known at the moment.

        • Alanz 19.1.1.1
          2 April 2013 at 9:29 pm

          Yup. My Southland contacts say there is worse news that the Government is sitting on.

          • Arfamo 19.1.1.1.1
            2 April 2013 at 9:48 pm

            Oh well, yet another indication of the dangers of letting the private sector and markets dominate economies.

          • trickldrown 19.1.1.1.2
            3 April 2013 at 8:56 pm

            Blinglishs majority will drop significantly.
            Given solid energies big talk on lignite has gone as badly

        • karol 19.1.1.2
          2 April 2013 at 9:55 pm

          That’s what Key’s face seem to indicate, in spite of the steely eyes throughout. The final grimace by Key at the end of the video was a kind of “well, it’s pretty grim, and we can only give it our best shot, but… not looking good” kind of face.

          A couple of diversionary tacks in the middle of the interview by Key as well.

  20. infused 20
    2 April 2013 at 9:27 pm

    I do love though, with all these topics, how now everyone is an aluminium smelter expert.

    30 seconds of reading Wikipedia and you’re off.

    • felix 20.1
      3 April 2013 at 12:17 pm

      Ha yes. Reminds me of the football world cup when everyone suddenly became lifelong soccer fans and experts.

    • Foreign Waka 20.2
      3 April 2013 at 8:46 pm

      But it gives for the most part factual info that is sometimes lacking – besides the enormous insight by lprent. How many people toy with aluminum day in and day out? Non the less, any economic argument can still be based on sound principles. It is also fact that these plans from Rio Tinto are not new and they need to be discussed as in conjunction with it the value of the asset sale shares are affected. How this will be perceived by the wider market (not NZ) is still in the open. One thing is for sure, NZ is not seen as being under particular clever economic stewardship at the moment. The way this plays out with all the news coming to air – it’s not a complimentary reflection.

      • lprent 20.2.1
        4 April 2013 at 1:07 pm

        I don’t have great expertise working smelting aluminium. Few do except those working at the smelter because we get almost all of our aluminium from aussie in more workable forms than pure ingots.

        But I did have a close look at the smelter when the 3rd pot line was put in because the company I was working for was trying to get into the supply chain. The economics haven’t changed since then except the plant has gotten older (apart from the half-potline that was added ~15 years ago), and the competition closer to the market and the transport costs have increased.

        But most of the stuff is obvious to anyone with access to the net and some basic understanding of business.

        • Foreign Waka 20.2.1.1
          4 April 2013 at 7:43 pm

          Well, I think you do. I have no idea about smelters but I know a thing or two about business. Hence my response. Enjoyed your detailed description though.

  21. Tiger Mountain 21
    2 April 2013 at 9:42 pm

    CAFCA http://canterbury.cyberplace.org.nz/community/CAFCA/OIC.html
    has been caning the smelter issue for decades, their rather clunky site has heaps of info. Get real, it is another corporate do over of the citizens of NZ however ShonKey might squiggle around.

    The smelter nowadays is bizarrely almost like some left over import substitution enterprise like the car assembly industry.

  22. Lloyd 22
    2 April 2013 at 9:42 pm

    If the main trunk line between Hamilton and Auckland was electrified and a decent inter-city train schedule was run between the two cities, the town of Huntly would become an attractive dormitory town for workers in both cities looking for a cheap house.

  23. xtasy 23
    2 April 2013 at 11:23 pm

    Rio Tinto could well lead this government to lay down on its death bed. No matter what will come out if it, Key did on Campbell Live tonight rather reluctantly admit, the only hope for the smelter to keep going is to have the company owning it accept they cannot agree to a punitive early exit, and that they will thus simply keep it running a few more years (until 2016 or so).

    He also had to admit, the smelter will go, most likely, there is little chance of it to stay operational in NZ. It was once up to top standards, but despite of delivering good quality aluminium, it will not be able to compete with newer plants in Mainland China and so.

    Here we go again, NZ is part of the supposed “western” and “developed” world, but it is a country and society that has its days NUMBERED!

    It is the outsourcing, diversification by multinationals like Rio Tinto and others, and their global “free market” dealings, that play off workers in different countries and sell them out to the lowest bidder. This whole agenda to “open markets” may by some have been viewed as creating more of a level playing field and social justice, but instead of improving working and liv ing conditions in poorer countries, the operating businesses will of course settle for the lowest common denominator.

    There is only ONE solution to solve this, and that is to have workers of different countries join together and put an end to the sell-out of cheap labour and poor other (environmental) conditions. Yet can we see this? No, I regret, it is a world very divided. The average Kiwi is ill informed as a conveniently thinking modern consumerist “idiot” (like the ones in other countries), going with the flow, being told, there is no alternative, and that it will be in their best interest.

    Sell yet more milk powder, logs and raw fish, to pay for increasingly more expensive consumer and capital investment goods. The race to the bottom has just started, and Key and NatACT are experts in running this agenda, few will benefit, but most are too damned dumb, ill informed ore plain scared, to take any action.

    The destruction of NZ society and its remaining primitive post colonial economy continues. Pretend you are still 1st world, on borrowed money from Australian banks, financing ever increasing hosing costs.

    Brain or brain dead, you have the choice. Few make it!

    • Draco T Bastard 23.1
      3 April 2013 at 2:28 am

      The race to the bottom has just started,

      No, the race to the bottom started in the 1980s and we’re pretty much there now.

  24. Jenny 24
    3 April 2013 at 7:43 am

    The question Rob, is should the government throw good money after bad?

    That Tiwai will close there can be very little doubt.

    The government has agreed to look into subsidising the future of the plant, but only for a short term. (remember This, is to one of the richest companies in the world)

    What for?

    To delay the inevitable?

    The Prime Minister on Tiwai:

    Rio Tinto was locked into a three-year electricity contract, with a further two-and-a-half-year winding-down provision, and it would cost it a sizeable amount to break the contract, Mr Key said.

    “They could do things faster. That means people would lose their jobs quicker, but it will cost them an awful lot of money.”

    So the government is looking at supplying the costs accruing to Rio Tinto of closing the plant down?

    Are they crazy?

    Is not climate change the most important existential issue humanity has ever faced?

    Isn’t this a God sent opportunity to cut our emissions?

    (Though no mention of the danger of climate change in this post. Following the Green Party lead here Rob?)

    The closure of the Tiwai smelter is not a tragedy, but an opportunity. And should be treated as such by all serious thinkers.

    Climate change is a terrible danger hanging over all our heads. Tiwai is finished.

    We should not be arguing about subsidising Rio Tinto’s profits over the closure period.

    Instead we should be demanding that taxpayers money needs to be spent on building the infrastructure and the jobs needed to connect all that electricity to the grid. To retire our coal fired power generator, massively reducing our CO emissions. To become the world’s first fully renewable electricity supplier. And an example to the world.

    Surely Rob a far more sensible strategy than bailing out the rich owners of a failing plant, don’t you agree?

    The representative of these workers should also be demanding that the money on the table should go to his members instead of Rio Tinto. Either directly as redundancy payouts, or retraining in the generating and construction sector.

    Instead we get this:

    Government needed to give Southlanders an assurance it would continue to fight for the smelter’s future.

    Red – Ged O’Connell National Secretary of the Engineering, Printing and Manufacturing Union,

    With this sort of short term blinkered thinking, Red Ged’s members and their families will be left in the lurch. The country will be left without the infrastructure needed to meet our carbon reduction obligations. And Rio Tinto and Sumitomo will walk away with $millions in tax payers money to cover their losses as a nice little parting gift.

    The union movement as a whole needs to have a reappraisal of danger and the response needed to meet the challenge of climate change and societal collapse.

    Thousands of jobs at stake at Tiwai

    O’Connell should realise that the smelter has no future, and make provision for his members based on that.

    After all the workers know it:

    A Tiwai smelter worker, who did not want to be named, said most workers were unhappy and felt the situation was bleak.

    Many felt more was happening than was being told and they wanted to know the truth.

    Some workers were putting their houses on the market and were looking for new jobs, the source said.

    • Peter 24.1
      3 April 2013 at 8:53 am

      A progressive government would remploy those workers, most of whom have substantial engineering experience, on electrifying our transport.

    • Unionist 24.2
      3 April 2013 at 9:14 am

      Jenny, a trade union has to represent the democratically expressed interests of its members. The Tiwai workers have been very clear that they want to keep the smelter and keep their jobs. So has the whole community in Southland. Unions can’t operate as some debating society removed from the material conditions of the workers they represent. After all, what kind of union would call for its members to be laid off in a provincial area with few employment options? And who in their right mind would put any faith in this right-wing austerity government offering a retraining package and alternative employment for the 3000+ people whose jobs are at risk? Sometimes you have to defend actually existing jobs.

      • Colonial Weka 24.2.1
        3 April 2013 at 12:19 pm

        “So has the whole community in Southland.”

        I think that should be “So has the general community in Southland.” (I assume that is true).

        I take your point about what a union is for and how it should work, but am curious about what this particular union or unions are doing re the impending closure (either now or later). everyone seems to think it’s just a matter of time, what how do the unions operate given that?

        • Unionist 24.2.1.1
          3 April 2013 at 1:50 pm

          There’d be very few people in Southland who want the smelter to close. You could probably count them on one hand.

          Unions respond to their members, but they also play a leadership role. Unions will usually push for redundancy provisions wherever they have collective agreements so that the impact is softened. That works quite well in areas where there’s similar alternative employment and a buoyant economy.

          If you’re in a provincial town with skills that aren’t in demand anywhere else locally you’re pretty much stuffed – redundancy or not, your house is going to lose a lot of value and you’re going to have to move town to find work, and increasingly that means Australia. In these cases unions will push for retraining and a regional economic development package like the West Coast got with the end of native logging. That’s still far from a guarantee that the workers who lose their jobs will end up in similar paying skilled employment. Many will lose out terribly. Many more will simply take the hit, pack up their families and leave. And under this government I doubt a job creation scheme is even a likely option.

          Given Tiwai workers are highly skilled and well paid it’ll be hard to find similar work. And the impacts will affect workplaces beyond Tiwai too. The port will be stuffed, as will local engineering firms and others in the supply chain. You can imagine why the union and the community are choosing to campaign to save these actually existing jobs and have little time for those sitting comfortably in Wellington or Auckland who tell them they’ll just have to diversify and adapt. The consequences of a closure are unthinkable.

          • Draco T Bastard 24.2.1.1.1
            3 April 2013 at 6:56 pm

            The consequences of a closure are unthinkable.

            Bollocks.

            Yes, there will be a time of change, probably stress and possibly even some pain but life goes on.

            • Foreign Waka 24.2.1.1.1.1
              3 April 2013 at 8:55 pm

              bit harsh isn’t it? It is difficult to ask for visualizing the “bigger picture” when your livelihood is at risk. I would suggest to the Union to make a deal that worker get 80% of there wages til 2016 unless finding another job. This would be fair as the Government is willing to put a lot more money into the smelter. And Rio Tinto will be closing it, no doubt.

          • Jenny 24.2.1.1.2
            3 April 2013 at 9:31 pm

            The consequences of a closure are unthinkable.

            Unionist

            Correction: The consequences of climate change are unthinkable.

            The union movement would know this if they had had a reappraisal of danger of climate change that we all face.

            Capitalism is a system of exploitation, of both the human world and the natural world. The drive to maximise profit in competition with other manufacturers means that the human resources and the natural resources are both exploited to their limits and often to beyond them. This is what is happening to the climate. It has been pushed past its limits.

            It is our grandchildren and generations yet unborn that will pay.

            Unionist look at the world around you, record breaking drought, the smallest Northern icecap for millions of years. Superstorms the destroy all before them. Deadly heatwaves like humans have not experienced in their time on this earth.

            If we don’t act our selfishness and cowardice will condemn our grandchildren to a world that is a living hell.
            This is not child abuse, it is worse than child abuse.

            Closing Tiwai will see a huge reduction in our green house gas emissions.

            Possibly allowing New Zealand, in a world first to become completely free of fossil fuels for our power generation.

            Tiwai must close.

            There can be no question about this.

            The changing climate demands it, if nothing else does.

            The only question is, will Tiwai be closed on the bosses terms, or the workers?

            Will the workers go cap in hand on behalf of their obscenely rich employer, to beg the government to give tax payers money to their employer to keep the plant open another ten years or so?

            When what we need instead is a militant union fight back?

            The union should be mounting the biggest redundancy campaign for these workers since the Mangere Bridge dispute.

            The union should be demanding that the $millions on offer to Rio Tinto from the government should be diverted to payout the workforce.

            If these workers and their union decide to fight, they should demand and get the full support of the whole union movement.

            Any redundancies, for any worker from Tiwai from now on, without full and adequate compensation and/or retraining with guaranteed jobs at the end of it. Should be met with a sit down strike and occupation of the worksite.

            No equipment or plant should be allowed to leave site or the country until the workers get full compensation. 18 and 8 js a fair and reasonable redundancy package, with all the millions the government is prepared to waste on Corporate Welfare.

            Nothing in, nothing out.

            The copper, in the plant as scrap metal alone is worth $millions.

            No piece of equipment or plant or product should be allowed to be moved off site, while the workers are on sit down strike and occupation. The sit down strike and occupation only to be lifted when the demands for fair compensation are met.

            If you are not advocating something like this. Then you are not a Unionist.

            • Unionist 24.2.1.1.2.1
              4 April 2013 at 1:15 pm

              Jenny, you can’t get past the fact that you’re advocating a union campaign against its members’ clearly expressed wishes. It’s a deeply undemocratic approach that I thought we’d consigned to the 1970s. You can talk big all you like about sit down strikes and occupations, but you’re looking at a workforce who I understand have only started to re-organise in the last year or so after the union was driven out in the 1990s. It’s possible they’ll be willing to take radical action, but in my experience that’s unlikely in the current circumstances. You strike me as having a very naive and idealistic view of the union movement, both in terms of its capacity and its day-to-day reality.

              • Jenny …
                5 April 2013 at 5:18 am

                You are right the capacity and day to day reality of the union movement has decreased markedly since the heigh day of the ’70s.

                Something you seem to celebrate.

                It’s a deeply undemocratic approach that I thought we’d consigned to the 1970s

                Unionist

                You attack the union movement of the ’70s.

                You have swallowed the propaganda of the bosses who hate powerful democratic trade unions and who at the time mounted a massive propaganda campaign against them.

                (pretty successful by the look of it, if someone who claims to be a unionist is now parroting it).

                And what would you know of the union members clearly expressed interests?

                Tiwai is finished. it is a dirty and polluting industry that is bad for the climate and the country.

                Something that even the workers realise:

                Tiwai smelter worker, who did not want to be named, said most workers were unhappy and felt the situation was bleak.

                Many felt more was happening than was being told and they wanted to know the truth.

                Some workers were putting their houses on the market and were looking for new jobs, the source said.

                But you yourself Unionist are not prepared to face this fact.

                Why is that?

                Is it because you have no will or stomach, to wage an active union campaign to defend these workers interests?

                Is it because you are not prepared to face up to the danger we all face from climate change and argue this case before union members?

                Listen to what this workers says.

                “Many felt more was happening than was being told and they wanted to know the truth.”

                Have any of the wider issues ever been openly discussed anywhere in the union movement?

                Have any of the members (even at Tiwai) been polled on their views of danger of climate change, about what role their plant plays in it, and what we should do about it?

                You give no clear reason why the workers would oppose a campaign for a decent redundancy settlement. A settlement that would let them leave Tiwai with some dignity. Rather than at Rio Tinto’s pleasure at some time in the future.

                No, you would rather kick the can down the road and advocate for government subsidies to keep this failing plant open for a little bit longer.

                What you don’t understand about the unions of the ’70s is that they had real leaders, ones who could argue their case and win workers into supporting it.

                You talk about democracy, but it is just that, talk. Without open discussion of all the issues you are abrogating leadership to just follow the uninformed herd.

                • KJT …
                  5 April 2013 at 6:35 am

                  You are forgetting that the Union movement in the 70’s could take industrial action.

                  Now, the movement is toothless.

                  Union leaders can be arrested for even suggesting industrial action, over anything but a recently expired contract with one firm.

                  In case you havn’t noticed the right to strike no longer exists in NZ, except in one narrowly defined circumstance.

                  • Jenny …
                    7 April 2013 at 6:35 pm

                    Union leaders can be arrested for even suggesting industrial action, over anything but a recently expired contract with one firm.

                    KJT

                    Maybe they should start earning their pay then, by getting arrested.

                    Why not? When it came to principle, fear of getting arrested didn’t stop anti-apartheid protesters.

                    ……it was very fast, the crowd on the bank pulled away from us and a flood of people went through and onto the ground. We ran under the goal posts into the middle. I remember the priests struggling with a bloody big cross.

                    Police formed a cordon around this group, which had linked arms to form a solid block in the middle of the pitch. Police arrested about 50 of them over a period of an hour

                    http://www.nzhistory.net.nz/media/video/game-cancelled-in-hamilton

                    Fear of getting arrested didn’t stop MP Hone Harawira in Glen Innes opposing State House demolitions and removal.

                    Harawira told TV ONE’s Breakfast he had “no intention of getting involved” in the protest last night but was inspired by some of the young people trying to prevent the removal of a state house in Glen Innes.

                    “There were these three young women sat on top of the house in the middle of a cold night and I thought to myself ‘that’s bloody awesome’ – that they would do that to try and protect their community, and I thought the least I could do was just sit in my car and support them,” he said….

                    ….”It’s kind of embarrassing, it’s not a serious charge, I don’t even know if it’s a real charge, it’s called ‘failure to remove a vehicle from a road’ which I’ve never heard of before,” Harawira said.

                    Fear of getting arrested didn’t stop Bastion Point land protesters.

                    On 25 May 1978 the Government sent in a massive force of police and army to evict them. Two hundred and twenty two protesters were arrested for trespass on Bastion Point.

                    The eviction came on 25 May 1978 when some 600 policemen, army person­nel in a fleet of army vehicles, buses, bulldozers and overhead helicopters arrived at Bastion Point. The protestors were surrounded. In the glare of full media coverage 222 people (108 Maori, 104 European and 10 Polynesian) were spectacularly but passively arrested, escorted to vans and buses and charged with wilful trespass under section 3 of the Trespass Act 1968.

                    Twenty one of those convicted appealed to the High Court where their convictions were upheld. Some of those went further again to the Court of Appeal where their convictions were quashed. It was held any finding that the land was Crown land in the civil proceedings (the application for injunction), could not be relied upon to prove title in criminal proceedings, as it had been.

                    So it was, some were convicted and discharged, some were not charged at all and others had their convictions quashed. It may have seemed to the casual observer a confused end to a confused situation but for Ngāti Whātua of Orakei, for whom things could not have been worse, the period marked a new beginning on a pathway to a better future.

                    http://www.waitangidayfestival.co.nz/bastion-point/

                    Fear of getting arrested didn’t stop Elvis Teddy the captain of the San Pietro.

                    When a local Maori fisherman, Elvis Teddy, steered his own vessel, the San Pietro, across the Orient Explorer’s path, dropping buoys and long-lines, the National-led Government authorised the Police and New Zealand Defence Force naval units to move in and arrest him.

                    To the Government’s dismay, the charges against Mr Teddy were later dropped. The Court declined jurisdiction because the protest action took place outside New Zealand’s twelve nautical miles territorial limit.

                    Earlier this year, on 13 January, Petrobras announced it was pulling out of New Zealand.

                    http://bowalleyroad.blogspot.co.nz/2013/04/the-paradox-of-free-market.html

                    And fear didn’t stop trade union leader Bill Anderson from spending a night in jail when the ferry workers went on strike.

                    The whole workforce of the city walked out of their jobs. 20,000 marched up Queen Street and government had to release Anderson. Which they did with some alacrity.

                    Anderson on spent one night in a cell and the government of Robert Muldoon learnt a very sharp lesson.

                    What is wrong with our modern trade Union leaders?

                    Have they gone too soft to risk a couple of nights in a cell for a principle?

                    Maybe they need to re-examine the partnership model that they have been following for the last two decades.

                    Then they might stop losing members faster than they can recruit them.

                    ….the Seamen’s Union was in dispute and held up the ferries from Auckland to Waiheke Island. The seamen had asked the drivers not to deliver oil to the boats and they duly obliged. This action led the late Justice Mahon to issue a court order for the ban to be lifted. The Drivers Union refused to lift the ban so Mahon had Bill arrested by court order and he got locked up in Mount Eden Prison. His arrest caused outrage and many unions around the country were mobilising for a national day of strike action.

                    In fact 20,000 workers marched up Queen Street in Auckland in protest at his arrest. The (Labour) Government eventually got involved and Tom Skinner (FOL President) was sent to see Bill in prison and it was in Mount Eden that the Seamen‘s claims were met. The settlement was presented to a stop work meeting by Tom Skinner and, once endorsed, a court hearing was held and Bill was let out.

                    http://www.converge.org.nz/watchdog/08/09.htm

  25. phillip ure 25
    3 April 2013 at 11:55 am

    does everyone know that the queen/windsors are major shareholders in rio tinto..?

    ..(and that lizzie is part of a consortium that controls some 12% of the worlds’ natural resources/mines etc..

    ..she not only loots the british taxpayer..she also loots/fucks over the planet..)

    ..kinda puts a few things in a slightly different light..eh..?

    ..is this a milestone on the road to a republic..?

    ..phillip ure..

    • felix 25.1
      3 April 2013 at 12:15 pm

      Hope Key’s translucent trust doesn’t own any shares in it, but how would we ever know?

  26. Plan B 26
    5 April 2013 at 3:28 pm

    Has the whole
    “New Zealand has the most expensive electricity in the world (almost)” thing been covered yet?

    Rio Tinto , you could argue is looking to pay a world price for electricity but we regular folk in NZ are stuck paying a rentier – price- way above the cost of production- we are paying the marginal price plus profit plus distribution costs for the most expensive generation rather than paying the costs associated with the acual electricity we use- the rentier profits flow to the companies- when that monet used to go to the government I guess we could all kind of ignore the fact that we are paying way above the odds for our electricity and think of it as a tax. But now it is moving into private hands there is no way we should allow ourselves to be ripped off.