Price up if smelter proceeds—Minister

Press, 27 September 1983, Page 8

Price up if smelter proceeds—Minister

PA Wellington Power planning for an aluminium smelter at Aramoana had “slipped” and electricity charges would now have to be higher if the project went ahead, said the Minister of Energy, Mr Birch, yesterday. The project was delayed indefinitely last year because the Government and the smelter consortium could not agree on a price for the power. Mr Birch told reporters yesterday, “If we managed to get agreement on a smelter we would then have to relook at our energy planning.” He said there would be “some increase in price” for the power needed at Aramoana.

Asked about the delays for the smelter because of the stalled power planning,

Mr Birch would say only that “there would be some slippage” and that he would need to reassess the situation.

The recently released 1983 Energy Plan assumes that the smelter has been postponed indefinitely. Electricity loan forecasts to 1997-98 are close to last year’s “no smelter” forecasts.

Mr Birch’s comments came as a Planning Tribunal decision was announced, ruling that land designated for the smelter should be designated for rural or residential development, not industrial. In a split decision on an appeal lodged by the Otago Harbour Board and environmental groups, the tribunal ruled that all provision for the industrial C zone and all reference to industrial development at Aramoana be

deleted from the proposed Silverpeaks County District Scheme review. The decision is another snag for the smelter project, which has been stalled since just before the 1981 General Election when world aluminium prices nose-dived.

However, Mr Birch noted that the tribunal “quite deliberately says it does not prevent industrial development’s taking place at some future date.”

Any smelter would require planning consent and the decision by the tribunal did not change that. “If Fletcher ChaUengePechiney consortium still wants to use the site it is required in some way to get a planning consent,” he said.

Top officials of Comalco, Ltd, are expected to raise the possibility of expanding

the smelter when they meet Mr Birch and Energy Ministry officials in Wellington tomorrow and on Thursday.

The meeting is a longstanding arrangement but has taken a new dimension after comments by the Minister of Trade and Industry, Mr Templeton, last week that a further potline at Tiwai Point was “now a strong possibility.” The Southland Trades Council has urged Comalco, the major participant in the smelter, to take such a step. However, the Prime Minister, Mr Muldoon, said at the week-end that Mr Birch would talk further with Fletcher Challenge and Pechiney about building the smelter.

Mr Birch said from his Pukekohe home last evening that Comalco had always expressed an interest in a fourth and fifth potline, which was considered at the same time as a second smelter, and he knew they were still interested. “I have no doubt it will be raised with me,” he said. However, the talks could be exploratory only and would depend on power price and electricity availability.

Mr Birch said that if Comalco wanted the Ministry and Government to propose costs and so on, they would do so. It would do the same thing with Fletcher Challenge and Pechiney, and if both agreed to what was proposed, the Government would make a choice. Comalco’s New Zealand spokesman, Mr M. B. Bennett, said from Auckland yesterday that the company was still in the process of reviewing the agreement for lines one and two. There was also a change in tariff structure which was going to cost the smelter-a further $3.5 million a year. As to further expansion, “if that subject comes up, I guess we will discuss it,” he said.