Govt threatening future of smelter — Comalco

Press, 1 November 1977, Page 1

Govt threatening future of smelter — Comalco

NZPA staff correspondent Melbourne

The New Zealand Government appeared to be pursuing a course which threatened the future of the Tiwai Point, Bluff, aluminium smelter, said the chairman of New Zealand Aluminium Smelters, Ltd (Sir Donald Hibberd) in Melbourne last night. The threat by the Prime Minister (Mr Muldoon) to legislate against a basic agreement ratified by Parliament was unfortunate for the Government of a country which recognised the rule of law.

Sir Donald is also chairman of Comalco, Ltd, which holds a 50 per cent interest in New Zealand

Aluminium Smelters. With representatives of the two Japanese partners in the venture, Mr N. Hasegawa, of Sumitomo Chemical Company, Ltd, and Mr H. Suzuki, of Showa Denko K.K., he met Mr Muldoon in Wellington last Friday to discuss the dispute over power charges to the smelter.

The meeting discussed a “comprehensive and generous” offer by the company relating to the price it paid for power and other important aspects of the Manapouri agreement. “It was an earnest endeavour to meet, as far as the smelter can afford, the Government’s wish for an increase in the price of power,” said Sir Donald. “The Prime Minister told

us it was not his intention to negotiate the matter at his level and, in any case, our offer was unacceptable to him.” Sir Donald said that earlier this year, the Government had made proposals to Comalco which would have caused the smelter to suffer continuing losses. It seemed inconceivable that the Government seriously intended to place at risk an important, industry involving an investment of SI7SM, particularly when it contributed about S4SM annually to New Zealand’s foreign-exchange earnings. Tire smelter had already earned the country more than SIOOM. “The operation of the smelter could not be sus-

tained if the Government’s demands were put into effect,” said Sir Donald.. Comalco’s alternative offer had substantial concessions and asked for “next to nothing” in return.

“Our offer was made against a background of poor returns from the smelter to date — in two years, very substantial losses. The current year has shown considerable improvement but world prices are again weakening. “These fluctuating fortunes are characteristic of the aluminium-smelting business. The offer we have made already placed future profitability at risk.”

(Legislative threat — page 2.)