Government suspends talks with Rio Tinto over Tiwai Point clean-up

The owners of the Tiwai Point aluminium smelter in Southland said they would close the site in August but reached a deal to keep it open until at least 2024. Photo / supplied.

The Government has suspended negotiations about the future clean-up of the Tiwai Point aluminium smelter.

After increasing complaints from ministers about a lack of clarity about the state of the ground beneath the smelter, Finance Minister Grant Robertson wrote to Rio Tinto's global head of aluminium, Alf Barrios informing him the talks were on hold.

"I have instructed my officials to defer negotiations until you are able to make firm environmental commitments" on waste material and unlined landfill at the site, Robertson wrote on March 5.

The Deputy Prime Minister expressed disappointment that Rio Tinto had put a proposal to the Government in late January that "did not address the remediation activities and outcomes which we have repeatedly outlined as a non-negotiable bottom line for the Crown".

Exactly how long the move could see talks on hold is unclear. Rio Tinto is undertaking a wide-ranging study of Tiwai Point which it has said could take up to three years to complete, although more thorough data about how contaminated the site is could be available sooner.

Rio Tinto has so far declined interview requests, but in a statement, Stew Hamilton, chief executive of New Zealand Aluminium Smelters, said as part of its closure study, Rio Tinto was undertaking detailed studies and gathering data about the site.

"We are in the first phase of that process and have employed a range of external independent experts to assist us. For example in the past two months 238 bores have been drilled and samples taken which are now being analysed."

Further information would be shared "as soon as possible", Hamilton said.

"We recognise our impact and responsibilities don't end when our operations cease and are committed to a safe and responsible closure."

Prior to the election, the Government promised to negotiate a deal to extend the operations of Southland's largest single employer, which at the time had indicated it would close in August, in return for a firm commitment on the clean up of the site, which has been operating since 1971.

But the Government's leverage of possible relief from transmission charges effectively evaporated when Rio Tinto struck a deal with electricity supplier Meridian Energy, which was good enough for the smelter to commit to operating until at least the end of 2024.

When the electricity deal was announced, Robertson said talks over cleaning up the site were continuing and he expected a deal to be completed "in a small number of months".

Since then Environment Minister David Parker has given repeated interviews complaining that the Government had been 'left blind' about the condition of Tiwai Point.

He revealed that Cabinet had agreed to give Environment Southland $300,000 to carry out its own environmental assessment of the site.

Energy Minister Megan Woods confirmed the talks were suspended because the Crown did not have the information it needed.

"Throughout negotiations which started in September last year, the Crown has requested information about the environmental state of Tiwai Point as well as commitments from Rio Tinto on remediation activities and outcomes," Woods said in a statement.

"Because Rio Tinto does not have or is not able to share this critical site information or make environmental remediation commitments at this time, we have deferred negotiations until this information is known."

Woods said the Government was "working closely with regional leaders and Ngāi Tahu to secure an appropriate environmental outcome and to support a regionally-led just transition" without giving details.