A little over a year ago, Rio Tinto was pleading povery, claiming its Tiwai Point aluminium smelter was unprofitable, and threatening to close it unless it got a government handout to keep it running. Their bluff worked, and we ended up paying the BluffGeld by giving them lower electricity prices - less than a fifth of what us plebs pay on average. And now they're laughing about what suckers we are in their annual report:
The owner of the Bluff Aluminium smelter noted in its results statement released late yesterday how successful its bluff to shut down the smelter late last year had been. The threat led 51% state-owned Meridian Energy to give a $60m per year electricity price cut to Rio Tinto in January which means the smelter now pays just $35 per megawatt/hr. That compares with the average wholesale electricity price since January of $239 per megawatt/hr and the price this week in the lower South Island of $103/mw/hr.[Unemtnioned: their 1.7 million tons of carbon in 2019 - and likely a similar amount last year - worth an estimated $82 million a year at today's prices, or $250 million a year on the government's books][...]
Rio Tinto reported this lower price deal had contributed to its record US$12.1b profit in the first six months of 2021 and its record high dividend payout of US$9.1b. It illustrated its “outstanding financial results” slide (8) for investors with a picture of a Bluff Smelter worker. Most of the profits and dividends came from surging iron ore prices as China fired up its economy last year with more steel and concrete, but tens of millions would have come from the profits from Tiwai Point.
As Bernard Hickey points out, this is just obscene when we have kiwis huddling in energy poverty. This company is taking us for a ride, driving up electricity prices for the rest of us and directly causing at least a million tons a year (two or three million this year) of extra carbon emissions from the coal it forces us to burn to make up for the electricity it uses. And they're openly laughing at us while doing so.
Its time to end this scam. We need to end all subsidies to Tiwai immediately: electricity prices, carbon, regulatory, pollution. Clearly they don't need them. We should use some of that money to develop alternative employment in Invercargill, as a hedge against future threats. And if this causes them to leave, good. Because the carbon subsidy alone makes it clear that we're better off just shutting this polluter down and paying everyone it employs to do something better with their lives rather than allowing this foreign extortion to continue.
