Community meeting to be held in Raetihi over mills threat

Karioi Pulpmill in the foreground and Tangiwai Sawmill in the distance, both of which are temporarily closed.

Residents in the small central North Island town of Raetihi are calling for support as the community faces uncertainty over the threat to its mills.

Mayors, councillors, politicians and Government agencies are expected at Tuesday night’s community meeting in Raetihi, called after Winstone Pulp International (WPI) announced plans to shut its Karioi operations with the loss of 230 jobs.

Rangitīkei Mayor Andy Watson said both the Karioi Pulpmill and Tangiwai Sawmill employed a significant number of workers from Taihape.

A number of Rangitīkei companies also provided services for the mills.

“We’re affected, and will be attending the public meeting in Raetihi.”

Watson said he was optimistic the mills could be saved, but a long-term solution relied on putting pressure on the energy market to lower spot prices.

“The spot price has come down because we’ve had some rain, but it needs to be around $100 per megawatt hour to be competitive.”

He said one short-term approach would be for the Government to offer up an electricity subsidy to the company, as it did repeatedly for Tiwai Point aluminium smelter.

Ruapehu Mayor Weston Kirton said he was waiting to hear the outcome of talks on Monday between WPI and ministers to address the pricing of electricity on the spot market.

Local efforts would continue to focus on finding short-term solutions to keep the lights on at Karioi.

“You can’t turn the lights out and expect a company of this size to just fold up and go away,” Kirton said.

“I believe this can be fixed - there needs to be an intervention. It just depends on whether the Government has the appetite to address this, but I believe they have no choice. It would be irresponsible as leaders to allow this to happen. It’s simply not the right thing to do.”

Kirton said it was ludicrous that as part-owners of the energy companies, the Government was reaping dividends from skyrocketing power costs.

The NZ Herald reported on Tuesday in 2023, the Government owned 51% of the major gentailers and was paid $425 million in dividends.

“They are destined to be beneficiaries of the profits,” Kirton said.

“It’s a ludicrous situation, having so many profits go to the Government when the pricing is so unpredictable and untenable. How they arrived at that situation needs to be investigated.

“Share the aroha and make good for these companies that are struggling. Come up with a mechanism that draws on the money going to the Government in dividend.”

Kirton said the long-term behaviour of energy companies should be addressed, including the reliance on hydro-electricity and thermal power, and a lack of investment in renewable energy.

LDR is local body journalism co-funded by RNZ and NZ On Air.