Tiwai Point smelter shutdown: Making solar panels to Tesla battery Gigafactory projects or another smelter are among ideas proposed

The moment Tiwai Point aluminium smelter shutdown news got publicized, ideas cropped up from manufacturing of Solar Panels to attracting Elon Musk to erect a massive Tesla battery Gigafactory.

On 9^th July’20, Rio Tinto announced its planning for the eventual closure of New Zealand Aluminium Smelters following a strategic review.

The expected date for the closure is 2021 and it would direct loss of 1000 jobs and another 1600 jobs indirectly connected to the smelter.

Dr Anna Berka, Lecturer in management, entrepreneurship and innovation at Massey University said: “New Zealand had years to plan for the closure but the Government still seemed to have been caught out, and there did not seem to be a transition plan in place for employees.”

”It’s the dependency, and the leverage, therefore, that Rio Tinto has over us – over the country, over the Government – that’s the part maybe we could have thought a bit more carefully about, given all the time we’ve had,” she said.

“The big question is whether Southland can come up with creative ways to make use of existing assets and skills and re-channel them into new employment opportunities.”

The Tiwai Point smelter has been the largest power consumer. It was supplied by hydropower from Manapōuri station, which was built in 1971 for the aluminium smelter.

Dr Berka said: “Getting the power out from Manapōuri to open it up to competing consumers was quite a complex and daunting task, and made the country very dependent on Rio Tinto.”

“And now we’re caught out, that’s the way I would summarise it.”

It would take three summers to upgrade the national grid to allow power from Manapōuri to be used by other South Island customers, and up to eight years to “rebalance” the national grid so the power could be distributed across the country, Transpower has estimated.

E tū negotiator Joe Gallagher said: “There were opportunities for the Tiwai Point site, including another company buying it to run as a smelter.

“I think it’s possible, all the gear’s there, it’s all running,” Gallagher said.

“It’s probably one of the more energy-efficient and green-friendly sites as it is now, so maybe it is an option for people.

“The thing with those type of industrial sites, once you mothball them that’s when you get into problems.”

The Ministry for Business Innovation and Employment said: “Tiwai was exempt from shutting during the coronavirus lockdown because turning off the aluminium pots at the plant and then restarting them, was a long and complicated process.”

Massey University Emeritus Professor Ralph Sims said: “With the growing efforts to reduce greenhouse gas emissions, any manufacturer that could see it using renewable electricity could be attracted.”

Sims said: “The manufacture of solar panels at Tiwai was certainly possible, but it would not be a huge energy user.”

Perhaps the biggest idea was to attract Elon Musk to build a Tesla battery Gigafactory at Tiwai, hatched by New Zealand electric vehicle charging company ChargeSmart.

Nigel Broomhall, CEO, ChargeSmart said: “We got a deep-water port they can ship in and out of, shipping is pretty low cost – Tesla’s biggest challenge is timing, getting stuff from one side of the world to the other.”

“But Elon himself has said they need 100 of the Gigafactories around the world, so given where we’re at, why don’t we aim for one now? At least put it in front of him.”

The current electricity price paid at Tiwai was significantly lower than the commercial tariffs being charged in Germany, where Musk was building a Gigafactory, and German labour was not cheap.

“Especially having done a few deals with Americans, it comes down to what the deal looks like, so it comes down to price,” said Broomhall.

It would be about a year before Rio Tinto’s contract with Meridian ended, and the site would take some time to clean up.

“So we’ve got a bit of time advantage, and we can get in his ear and squeak as much as we like as Kiwis about how great it would be to come down here. I don’t think we’ve even hosted him down here.”