I don’t think we can absolutely rule out the possibility that Rio Tinto is still playing games with this latest threat to shut Tiwai Point.
Obviously, today’s announcement that the smelter will close in 14 months sounds final, until you listen to the bosses.
The NZ-based boss Stew Hamilton was asked today if a deal to keep it open was still possible and said “the window is open” but it’s “closing fast”.
It’s hard to shake the feeling that this could be just another bullying tactic given Rio Tinto history of making threats.
How many times have we heard Rio Tinto threaten to shut this place down unless NZ stumps up more cash to subside their business?
2013, they threatened to close until Stephen Joyce handed over $30 million and said that was the last time.
2017, they threatened to sell the smelter, then got better power prices
Last month year they threatened to pull unless they got even better power prices, they were offered the chance to save $10 million on that bill.
They already get cut-price power and they get discounts off the emissions trading scheme. Last year, they saved nearly $50 million dollars off their bill.
All of that is not enough to keep these guys profitable in NZ. Losing this business is going to be hard.
It’s going to cost the NZ economy, and for Southland it’s going to be particularly hard. That province has 2600 workers that depend either directly or indirectly on this smelter.
It’s hard not to have sympathy for those communities. But on the flip side, it’s very hard to have any sympathy for Rio Tinto. These guys are not good corporate citizens.
Just take a look at how they’ve behaved towards Mataura, a town now dealing with the smelter’s rubbish, sitting in its paper mill, that locals now have to clean up at the cost of millions of dollars to ratepayers and taxpayers because Tiwai’s owners won’t clean it up themselves.
It’s very hard to want to subsidise a business like that staying in NZ, especially when they threaten to leave so frequently.
As I say, this threat to leave just be another power play to get more cash, who knows with these guys. But whether they leave now or later, the decision has a feel of inevitability around it.