Jacinda Ardern distances herself from Winston Peters' call to save Tiwai Point smelter from closure

Jacinda Ardern has distanced herself from Winston Peters' call to save Tiwai Point Aluminium Smelter from closure, throwing cold water on the prospect of a bailout or subsidies. 

The Prime Minister on Thursday held meetings in Invercargill involving mayors and CEOs to discuss opportunities for Southland after Australian company Rio Tino announced plans to shut New Zealand's only aluminium smelter. 

The multinational corporation has received hundreds of millions of dollars in direct and indirect Government subsidies over the years, including a $30 million bailout under former Prime Minister John Key.

The Government is refusing to give the company any more bailouts, with Finance Minister Grant Robertson last week describing the Tiwai Point closure as having a "sense of inevitability" - but the Deputy Prime Minister has a different view.  

With around 2700 jobs on the line, Winston Peters believes the smelter should be bought-out by the Government - something he says he's been advocating since 2011. 

"A buy-out would give those who have the most stake in the success of the smelter, the people of Southland, the opportunity to directly benefit from owning and managing it," Peters wrote in the New Zealand Herald on Thursday

"And on the issue of national interest, why would we continue to import junk aluminium, with sometimes a two-year guarantee or less, when New Zealand is producing the most pure, lowest emission, aluminium in the world. It makes no sense."

But the Prime Minister distanced herself from talk of a bailout when she was asked about Peters' comments during a press conference on Thursday. 

"I saw the position of the leader of New Zealand First," Ardern said. "Ultimately, that wasn't the nature of the conversation that was had with leaders today. All of us talked about the transition."

The Prime Minister poured cold water on the prospect of a bailout or subsidies.

"That wasn't the nature of the conversation today," she said. 

"For us, it was all about what happens next and on what timeframes. The key for us, though, is we want to give certainty to this region as much as we can. This is a really unsettling time and so that's why we are here.

"This is a firm commitment from us that we will work with this region to make sure that we are growing those opportunities in the future."

Tiwai Point is the largest electricity consumer in New Zealand. In 2007 the smelter struck a deal with Meridian Energy for the continuous supply of power until 2030.

Energy Minister Megan Woods said Rio Tinto's decision not to extend their "generous" power contract with Meridian will flow through to the rest of the market.

"Eventually it will free up around 13 percent of total power generated in New Zealand which will relieve some pressure to build new generation. The increased supply will also have a positive impact on prices." 

Ardern said she understands that Rio Tinto Tiwai is currently in talks with Meridian. 

"Those are commercial negotiations and so those talks are for them. But some of that will determine some of the timeframes we're working to for the ultimate transition here in Southland and the jobs that are obviously reliant on the smelter."

She said the Government will try and transition people into new areas of work, such as agriculture, aquaculture and manufacturing. There is also an opportunity to support other energy-intensive projects like green hydrogen and data centres.

The Government expects Rio Tinto to meet their obligations for clean-up of the site before August 2020 - at an estimated cost of $256 million.

Regional Economic Development Minister and NZ First MP Shane Jones announced funding packages on Thursday for Southland from the $3 billion Provincial Growth Fund (PGF). 

The packages include $25 million to create 180 jobs and improve the safety and resilience of the Homer Tunnel on a state highway tourist route linking Te Anau and Piopiotahi Milford Sound. 

He also announced $5.3 million in loans for two Southland businesses - Alliance Group Limited's meat processing facility and Drysdale Hydroponics' vegetable growing business.