Tiwai Point smelter closure: Government's warning to Rio Tinto over $256 million clean-up of site

With Rio Tinto on Thursday announcing it will close the Tiwai Point smelter in Southland, Government Ministers have made clear what is expected of the multinational mining giant after it shuts up shop.

Rio Tinto says the smelter - Southland's biggest employer - would close next year due to the business being "no longer viable".

It's "a real blow" for Southland's economy, Finance Minister Grant Robertson said, and raises the issue of cleaning up the Tiwai Point site after closure, which would cost about $256 million.

There's also the issue of 10,000 tonnes of hazardous dross being stored in the Southland town of Mataura. The hazardous ouvea premix from inside the smelter is stored in an old paper mill alongside the Mataura River.

Gore Mayor Tracy Hicks said earlier this year Rio Tinto backed out of a "handshake deal" which would have had the waste removed quickly. The $4 million deal signed last year would have seen the dross removed from Southland sites over several years and reprocessed back at Tiwai Point.

Taha Industries took the dross off Rio Tinto's hands in 2014 but that company put it in the paper mill "without a permit [and] went into liquidation", Hicks said.

"[The company] literally got on a plane and went to Bahrain and left the problem for everybody to fix up here," he told Magic Talk in February.

Finance Minister Robertson and Energy Minister Megan Woods both confirmed on Thursday Rio Tinto would have to meet obligations and clean-up the site upon Tiwai Point's closure and also remove the dross.

"It is certainly our expectation that will occur if the plant is to close," Woods told reporters.

"These are our expectations - Tiwai themselves are very very well aware of that," added Robertson, appearing at a press conference alongside Woods.

Asked if he trusted Rio Tinto to clean up the site, Robertson said, "we have to".

Grant Robertson.
Grant Robertson. Photo credit: Getty

"We obviously had issues with the dross - that is being resolved and to an extent we now have a plan but we will be working very closely to ensure they meet all of our expectations."

Woods said half of the material stored in Mataura "should" be removed by August next year - that's when Rio Tinto plans to close the smelter.

"The Government expects Rio Tinto to meet their obligations for clean-up of the site and do the right thing on the dross."

Speaking to Newshub, New Zealand Aluminium Smelter chief executive Stewart Hamilton said there were no other options on the table right now other than closure.

In a statement earlier on Thursday, Rio Tinto said a review considered whether to close or scale down, and concluded the business was no longer viable.

"We recognise the decision to wind-down operations at NZAS will have a significant impact on employees, the community and our customers,"chief executive Alf Barrios said.

"It is not a decision we have made lightly and without significant careful consideration.

"We are committed to working with our partners as we progress through detailed planning towards closure and we will do all we can together with the government to find ways to support the Southland community."