Tiwai Point closing

Stuff reports:

Rio Tinto has said it will close the Tiwai Point aluminium smelter.

The company said in an announcement on Thursday it would start planning for the eventual closure of New Zealand Aluminium Smelters (NZAS) following a strategic review which “showed the business is no longer viable given high energy costs and a challenging outlook for the aluminium industry”.

The closure would result in the direct loss of 1000 jobs, with 1600 jobs indirectly connected to the smelter also under threat, the company said.

This is devastating news to the families affected. 1,000 jobs lost is huge anywhere, but especially so in Southland where there are not as many alternative employers. The flow on effects will be significant.

I’m glad the Government didn’t do a subsidy. if a business is unprofitable, a subsidy doesn’t make it profitable. It just transfers wealth from profitable businesses to unprofitable ones.

There is a small silver lining for the rest of NZ, as the surplus of electricity should lead to cheaper power prices.

But that is minor compared to the devastation this causes in Southland. It might have been inevitable, but it doesn’t make it any less painful.

What a pity that the Government has spend such a huge proportion of its $3 billion provincial growth fund in Northland and such a tiny proportion in Southland. Of course NZ First are not trying to win a seat in Southland.

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