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South Port urges government to take smelter review seriously
Staff reporter18:43, Nov 08 2019

ROBYN EDIE
South Port Chairman Rex Chapman said it would be wrong not to take Rio Tinto's review of the viability of the Tiwai smelter seriously.
South Port is urging the Government to recognise the risk represented by Rio Tinto's viability review of the New Zealand Aluminum Smelter at Tiwai.
Speaking at the port operator's annual meeting, South Port Chairman Rex Chapman said it would be wrong not to take the review seriously.
In a statement released in the afternoon, Chapman said: "NZAS was well justified in arguing that it is paying too much for transmission costs."

ROBYN EDIE/STUFF
The bridge leading to the Tiwai point Aluminium Smelter, near Invercargill. Power pylons run alongside the bridge, supplying Tiwai with electricity.
The smelter was built in the 1970's in conjunction with the Manapouri Power Scheme with a dedicated transmission line, Chapman said.

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Transpower upgraded its infrastructure in the North Island and has spent several billion dollars doing so, Chapman said.
The smelter is obtaining very little benefit from Transpower's recent transmission infrastructure spend.
Chapman believed the Electricity Authority has been undertaking a review of transmission pricing for the last ten years but it appears to be no closer to imposing a fairer model.
"Quite apart from the serious financial impact on Invercargill and the Southland region the closure of the smelter will still mean that the production loss at Tiwai will need to be met elsewhere in the world, most likely from a smelter that is not powered by renewable energy."
Chapman clarified the position of South Port in the event of a closure of the Smelter, which represents a third of cargo volume at Bluff.
However, South Port receives no wharfage revenue for raw material passing across the Tiwai Wharf [across the harbour from main port operations].
Instead, South Port earns a fee fixed until 2043 for the wharf structure.
While the smelter is an important customer, the overall contribution to South Port net profit (excluding the licence fee) is less than $2M, Chapman said.