Line four at Tiwai Point has been idle since 2020.
Photo: RNZ / Nate McKinnon
Southland mayor Rob Scott is celebrating the potential return to full capacity of Tiwai Point’s aluminium smelter.
Contact Energy has signed a letter of intent with Tiwai’s owner, Rio Tinto, to deliver enough power to restart the smelter’s dormant fourth potline by about 2030 and produce an extra 30,000 tonnes of aluminium a year.
The deal relies on a long-term power purchase arrangement that will help fund and justify the construction of the recently consented Southland Wind Farm, expected to be the largest in the country.
Scott said it was a win for the country’s economy and for local businesses, and it would encourage investment and growth in the south.
“It’s great for Southland and also great for New Zealand … I just can’t see any negatives,” he said.
“It’s extra production coming from quite a heavy exporter so it’s obviously going to put that extra demand, positive demand on servicing it and everything else. We know it’s a very big employer in Southland that has quite a wider aspect than just the plant itself.”
Line four at Tiwai Point has been idle since 2020. Rio Tinto estimated its reopening could generate an extra $100 million in annual export revenue for the country.
Scott was confident the reopening of the line would go ahead despite the agreement between Rio Tinto and Contact Energy being non-binding.
“I know that these guys have been working very hard in the background. When Southlanders just say they’re going to do something, they normally do it,” Scott said.
Great South, Southland’s regional development agency, also welcomed the announcement.
Chief executive Chami Abeysinghe said the wind farm was a major step towards the region’s goal of becoming a renewable energy hub for New Zealand, with aluminium being a core element of renewable energy technology.
“The fact that it’s going from down here in little old Southland out to the rest of the world is pretty phenomenal,” she said.
The announcement follows the negotiation of a long-term fixed-price power contract between Meridian Energy and New Zealand Aluminium Smelters.
“We’re all really very, very pleased because it is on the back of the 2024 announcement where they secured an energy deal and we had the surety that the smelter would remain open until 2040. It’s just growing from strength to strength,” Abeysinghe said.
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