Published date08 July 2021
Date08 July 2021
The offer is revealed in 25 pages of letters released to RNZ under the OIA, between the mining multinational and ministers over a deal to keep the Tiwai Point smelter from closing early.

Rio Tinto was urgently seeking a deal to deliver a big cut in its $60 million-a-year power lines — or transmission — charges.

While campaigning in Southland ahead of the 2020 election Prime Minister Jacinda Ardern said: ‘‘We have said we do not believe we should be giving a direct government subsidy to Rio Tinto, so that’s not what we will be doing.’’

Three months later, the Government wrote to Rio Tinto, which owns 80% of New Zealand’s Aluminium Smelter (NZAS), with an offer of a payment to begin the very next month, in January this year.

‘‘To achieve a managed exit for the smelter and in consideration of our respective interests, the New Zealand government will provide a Transmission Transition payment to NZAS of [blanked out],’’ it said.

‘‘This payment would start from January 2021 until December 2024.’’

Labour and National have repeatedly said they would never repeat a $30 million direct subsidy paid in 2013 by the National government to keep the smelter open.

RNZ asked Finance Minister Grant Robertson how the December 2020 payment offer was different and how it was not also a direct subsidy.

In a statement, he said the Government had not gone back on what Ms Ardern promised in the campaign.

‘‘Negotiations with the smelter’s owners were around exploring ways to lower electricity costs to the smelter in return for a firm commitment to maintain current employment at the site, agreeing to work on remediation plans as well as working with the government to transition the region’s economy.’’

Mr Robertson’s spokesperson said the Government ‘‘was seeking certain commitments from Rio Tinto in return for a proposed payment’’.

‘‘It didn’t go anywhere.’’

The payment offer set a deadline to hear back from Rio Tinto of just three days later, December 18.

The offer reflected how a change in transmission pricing in future would have benefited the smelter, Mr Robertson said. He has previously put that benefit at $10 million a year.

The payment offer ‘‘did not progress into how it would work in detail. No final payment or structure was ever agreed with the smelter’s owner’’.

Government ministers declined RNZ’s request for an interview.

Robertson had laid out five conditions for Rio Tinto to get the payment, mostly around site remediation; the key one was that the company had to commit...

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