Tiwai Point
April 24th, 2012 at 7:00 am by David FarrarDavid Shearer in his big speech last week said:
Tiwai point could have been an obsolete aluminium smelter decades ago, but it didn’t work out that way.
That’s because management and workers at NZ Aluminium came together and looked at what they had to do to keep the operation running.
Through their ingenuity they began producing the highest quality aluminium in the world. They identified their niche, they got the business, they scored the contracts
and today everyone shares in the success.They are well paid for working well and it’s an important business in a regional area.
It is good to see a Labour leader championing Tiwai Point.
But there is a problem. Labour’s ETS policy would close Tiwai Point down. Labour opposed the changes National made to the ETS to protect trade-exposed industries, and their policy is still to undo those changes.
So the poster boy employer heralded by David Shearer would close down under their policies. Whoops.
Tags: David Shearer, ETS, Labour, Tiwai Point
April 24th, 2012 at 7:22 am
Bill English and Eric Roy are excellent MPs.
But neither could match Ralph Hanan. He would have long since had Clarks guts for garters over the ETS/Tiwai imbroglio.
Even as a National MP/Minister, Hanan would have ensured that Shearer’s comments and the adverse Labour ETS impact on Tiwai/Bluff/Invercargill/New Zealand made front page news. Hanan would never have let up.
Well spotted DPF!
Vote:April 24th, 2012 at 7:41 am
maybe Labour would change the law to accommodate this corporate?
Vote:April 24th, 2012 at 7:50 am
Not quite sure what is new about that. Rio Tinto (and Comalco before them) have threatened to close the smelter numerous tomes over the years – every time any government has proposed energy pricing or carbon emissions charges that would impact unfavourably on them they come up with this threat. Most recently, they cam up with it in 2008 when the first ETS legislation was going through Parliament.
Reality is that they are still here, because they have already got a sweet deal on electricity pricing that no other industry in New Zealand has.
Vote:April 24th, 2012 at 7:59 am
Toad
So the Gweens would close Tiwai point? What about the jobs Toad?, what about the community?
You would close the place based on nothing more than the climate change con?
Vote:April 24th, 2012 at 8:01 am
The ETS doesn’t ‘protect’ industries. If damages them, and the National flavoured ETS simply limits the damage while continuting to pay homage to alarmist junk science.
Vote:April 24th, 2012 at 8:05 am
Yeah right, only if you believe what the owners said 4 years ago
Something that companies always say when something doesn’t go their way.
And even they have a caveat
So “most likely” somewhere between “now and 2030.”
Well if they cant find any efficiencies in the next 18 years it surely isn’t the ETS that is going to drive them out of business.
Vote:April 24th, 2012 at 8:07 am
@Toad
Vote:Aluminium production uses a huge amount of electricity, indeed aluminium is described as solid electricity.
They get a good price, cheaper than other industries in NZ (Manapouri power station basically runs Tiwai) BUT…………. they can get subsidized cheaper electricity overseas where they burn coal.
So your shallow arguments mean that you are encouraging yet more coal burning overseas. That’s kinda stupid
April 24th, 2012 at 8:10 am
toad and his green party mates made it clear a few years ago that they wanted the plant closed down .. no ifs, no buts, no maybes
Vote:April 24th, 2012 at 8:23 am
Right, I think confirmation of their position on the smelting of aluminium fills in number 148 on the updated list of things to be banned when the Greens come to power.
Vote:April 24th, 2012 at 8:26 am
Lance
I think you have missed a key point. If the smelter shuts down and moves offshore it can buy NZ coal to produce aluminum which we can import back into NZ. So we can lose the jobs, sell more coal and import more…. this would be called success in terms of Labour policy because closing the smelter would ensure a confidence and supply deal with the greens.
Vote:April 24th, 2012 at 8:27 am
must be getting up there nasska
Vote:April 24th, 2012 at 8:37 am
I’m not sure if was the case at the time of building Manapouri but it is common in infrastrure business to have a “key” customer with a good deal to give good long term support for the initial investment ( ask any shopping mall developer). Also we have to remember the state of NZs economic development at the time of the investment.
Re the ETS –Barry Brill gives a good background/current position in this article
http://www.nzcpr.com/guest284.htm
Vote:April 24th, 2012 at 8:42 am
Just a point of information with regards to CO2 and aluminium production – there are two major sources of CO2 in the production of aluminium. The first is CO2 from the electricity generation required to supply the electrons needed to reduce the Al203 (alumina) into Al metal. Tiwai, like a lot of other smelters, use hydro power. Other smelters use thermal generation e.g. Gladstone Power Station in Queensland is a ~1700 MW coal fired station, and was built to supply the Boyne Island smelter, or a large smelter in Baharain uses ~2500 MW of gas turbine fired generation for electricity supply.
The second source of CO2 is in the reduction process itself. The alumina undergoes a reaction at ~900 °C (heat supplied via the current flow through the reaction cell). In the reaction, large carbon anodes are converted from C to CO2 when the Al2O3 is converted into Al metal. Each anode weighs around 4 tons, there are 18 to a reaction cell, and, from memory ~600 cells in total on the potlines at Tiwai. Each anode is consumed in around a fortnight or so ( might be a bit more) – there is a dedicated production facility making them on site, around the clock.
So, even with 100% CO2 free electricity, any Al smelter is going to be releasing CO2. The ratio is around 2 tonnes CO2 per tonne Al, depending on how efficiently it is run.
Price per tonne Al: Varies between ~US$2000 to $US2500 over a year
Cost per tonne CO2: NZ$25 fixed per two tonnes until the end of 2012, no idea on what it will be after.
Approximate price of CO2 production for Tiwai at the moment: around 1% of the price of the final product. When trading comes into full swing, it may be half that, it may be double that.
FM
Vote:April 24th, 2012 at 8:56 am
BAHAHAHAHAHAHA outstanding.
Toad – funny how quick you people are to just shut things down, destroy jobs/ lives. ya dont miss many ways of making money when it comes to yourselves though. no loop hole left unused
Vote:April 24th, 2012 at 9:12 am
thanks fooman, that’s quite interesting.
If a CEO announces that the company cannot deal with 1% increase in production cost other than to shut the plant down, then truly the ETS isn’t what people should be worried about.
Vote:April 24th, 2012 at 10:02 am
fooman – what is the origin of the carbon?
Vote:It could either be made from coal or timber – and if it’s timber there’s no net greenhouse emissions over the life of the product.
April 24th, 2012 at 10:08 am
An earthquake devastated Christchurch. Labour and the Greens would do the same to Invercargill.
Vote:April 24th, 2012 at 10:18 am
NZ needs every scrap of foreign exchange earnings it can get to reduce the rate at which we become tenants in our own country (due to the horrible balance of trade hole we live at the bottom of).
Exporting or owning foreign production is what ultimately makes a country rich (are there any exceptions to this rule?). So being a small country lacking economies of scale we need to focus all our political will and enthusiasm on supporting those indigenous industries (mostly primary production) that can deliver the income we need to support the standard of living we desire.
Dairy provides the lions share, other Agriculture most of the rest with Tourism a laughably small contribution given all of the noise made about it. Tiwai is probably worth keeping, and it would be great if we could start some other large scale mineral extraction – like a large Coal to Liquid plant that could replace Billions per year of petrochem imports at costs below current oil prices while also providing a large indigenous engineering industrial base from which other export business opportunities would flow.
Vote:April 24th, 2012 at 10:21 am
gazzmaniac: The anodes are generally manufactured from coke and pitch – residuals from oil refinery processes. I’m not too sure about NZAS in particular. I doubt they will do anything too different. Biomass based carbon is generally a bit tricky to handle in industrial processes. The amount of contaminent elements such as chlorine and sulfur can be very variable and can cause issues with corrosion of equipment or contamination of product if not strictly controlled.
FM
Vote:April 24th, 2012 at 11:19 am
Currently Rio Tinto is trying to sell NZAS and it’s other smelters in the region. Depending on who the new owners are this would seem to have a much greater effect on the long term future of NZAS than any changes to the ETS that Labour might make.
Vote:April 24th, 2012 at 11:57 am
Thanks fooman – it’s always interesting to see how processes work in industries other than your own.
Vote:April 24th, 2012 at 12:46 pm
big bruv
The Greenpeace party do not care about jobs or people – they are beyond that – they live in their middle class, university educated world, where the conclusion (theirs) only matters.
Like say Iran and Saudia Arabia – the so called elected governments run the country, but the theocrisy control everything.
Vote:Greenpeace are similar – they do not care about say, the economic health of the country – that is for the politicians – they just want control.
Think about it.