Rio Tinto's announcement three weeks ago that the future of the Tiwai Point aluminium smelter is in doubt has elicited two responses from the public — one cynical, the other downright cheerful, but both simplistic.
The cheerful view is to be found among environmentalists who see all that clean, green, cheap power flowing from Meridian's Manapouri power station to Tiwai as a wicked waste.
• Power surge: What happens if Rio Tinto pulls the plug on Tiwai Point?
• Tiwai Point smelter says it needs 'tens of millions' in annual relief
• Gavin Evans: Smelter review a wake-up call on energy policy
• S&P says possible Tiwai Pt closure exposes risks in electricity sector
They think the 13 per cent of national electricity production pre-empted by the smelter should instead displace most of the 17 per cent which is generated from non-renewable sources, or be freed up to facilitate the electrification of transport and industrial heat.
Okay, a few thousand jobs would be lost but, hey, we have a climate crisis.
The cynical view is: here they go again, this multinational threatening social and economic harm in order to secure better pricing for electricity. It smacks of "Nice smelter you've got there, New Zealand. Shame if something happened to it, eh?"
Rio Tinto's statement last month said that "Under current market conditions and with high energy costs we expect the short to medium-term outlook for the aluminium industry to be challenging and this asset to continue to be unprofitable."
Talk of continued unprofitability is a bit hard to square with company's announcement last June that in 2018 its 79 per cent holding in the smelter delivered an after-tax profit of $22 million, albeit that was down on the $43m profit it had averaged over the previous five years.
The metal price might be low compared with, say, 2017 levels but London Metals Exchange futures see it rising around 10 per cent over the next three years in US dollar terms, and the exchange rate has fallen.
And as for the sore point of transmission costs — a hefty $66m last year — the latest round of the apparently endless review of pricing for the national grid embodies a move towards the principle of beneficiary pays, albeit less and later than the company would like.
Finally, there is an exit cost for the smelter's owners in the form of remediation work the site would require if it closed; financial provisioning for that is sitting at around a quarter of a billion dollars, an expense the company would no doubt prefer not to realise.
So is Rio Tinto bluffing? Is the corporate review team which has just visited the smelter merely putting on a show?
It would be dangerous to assume so.
For one thing, it put Pacific Aluminium — the business unit which includes Tiwai and three Australian smelters — up for sale in 2011 and only took it off the market last year.
It is a reluctant owner, unable to divest, so what does that leave?
The reluctance reflects a global environment of serious excess capacity and depressed prices. China, in particular, has invested heavily in smelting capacity in recent years, to the point where it now produces — and, to be fair, consumes — more primary aluminium than the all of the rest of the world combined.
It is heavily subsidised. An OECD report earlier this year tried to penetrate the opacity of China's state capitalism, company by company, and concluded that billions of dollars of state support of one form or another is in place. That is unlikely to change.
Nor is the environmental subsidy. Nearly 90 per cent of China's smelter capacity relies on electricity from coal-fired generation. It is the main reason that the International Aluminium Institute reckons 61 per cent of global aluminium production relies on coal-fired power stations and only 26 per cent on hydro (the rest is mainly gas).
In New Zealand, most non-renewable generation is gas-fired; Huntly's remaining coal-fired units provided only 3 per cent of the country's power in the year ended June.
If the smelter were to close and thereby accelerate the closure of all of the thermal power stations — by no means a given — the impact on global greenhouse gas emissions would still be to increase them. So any satisfaction at the prospect of the smelter's closure on environmental grounds smacks of parochial Nimbyism.
The essential commercial question is whether there is a power price that is not too low for Meridian and not too high for Rio Tinto.
Modelling the price below which Meridian would be better off releasing the power it commits to the smelter into the national market instead is a task of fiendish complexity.
It requires taking a view of what thermal generation plants would be crowded out and how soon, and how often those plants are the marginal generators which set the wholesale price in any given half-hour period, and so what the impact on average wholesale prices would be.
It would also involve estimating the extent and duration of any price separation between the South and North Islands as a result of at least some of Manapouri's output being stranded for however long it took Transpower to relieve bottlenecks in the national grid.
In its briefing to the incoming Minister of State-Owned enterprises two years ago, Transpower said it would cost around $600m to enable Manapouri's output to reach the upper North Island and would take years to complete.
Figuring out the opportunity cost of continuing to supply Tiwai would also involve estimating the likely demand-side response. Would Fonterra, for example, be interested in switching to electric heat in its South Island plants?
Clearly there are a lot of moving parts in this calculation and therefore a lot of scope for miscalculation.
And it's not just a problem for Meridian. Contact Energy in particular, with hydro dams on the Clutha and an ageing gas combined cycle plant at Stratford in Taranaki, also has a lot of value at risk should Tiwai close. It might be persuaded to join Meridian in a deal underwriting power pricing for the smelter.
Another possible outcome is implied by Rio Tinto's statement last month that the strategic review would consider "all options, including curtailment and closure". The reference to curtailment suggests the possibility of scaling back production and agreeing a lower price for a lower volume. A substantial minority of the smelter's output commands a premium because of its exceptionally high purity.
The bottom line is that the moral of the story of the boy who cried wolf is that eventually the wolf appeared and the scoffing villagers were scoffed themselves.
But there is at least some prospect of a deal to be done.
Let's hope so, because this is a substantial export business. Closure would widen the country's external deficit, already running at over $10 billion a year, which has to be balanced by borrowing even more from, or selling assets to, the rest of the world.