Taiwan smelter interest welcome — Minister

Press, 17 May 1984, Page 8

Taiwan smelter interest welcome — Minister

PA Wellington The Minister of Energy, Mr Birch, yesterday said he would welcome any approach by a Taiwanese company interested in building an aluminium smelter at Aramoana.

But any such proposal would have to be capable of existing without an electricity subsidy, he said. Labour’s energy and de-

velopment committee convener, Mr Michael Cullen, has dismissed the proposal as “Mickey Mouse” and predicts it will fail. Taiwanese and Dunedin companies are reported to be involved in fresh negotiations to build an aluminium smelter at Aramoana.

The Taiwanese Smelter Company already has two smelters but wants to move one to New Zealand. The

proposal is to transport most of the machinery and heavy equipment in the newer factory to the Aramoana site and rebuild there.

The Taiwanese company, which needs a New Zealand partner to set up a smelter here, is being forced overseas by rising electricity costs.

The proposal envisages a small smelter producing about 50,000 tonnes of ingot a year. It could begin production toward the end of this decade. It would probably employ 200 to 250 people.

Mr Birch said he was not aware of any firm approach by Taiwanese and Dunedin companies.

“I can only reiterate that the Government believes an investment of this type, expanding the aluminium industry in Dunedin, is one of the growth opportunities for that region,” he said.

The Government would be anxious to facilitate the investment provided it was able to be put in place without electricity price subsidies.

“That has always been the basis of our negotiations with Fletcher-Pechiney and although those discussions are still continuing between officials, there is no reason why other parties should not make known any proposals that they have for an alternative smelter,” he said.

“So I would welcome any discussion with Dunedin

companies as an alternative to the Fletcher-Pechiney development.” The Government would insist that any alternative proposal strictly comply with environmental restrictions, said Mr Birch. In 1979, when the Government advertised internationally for potential users of the electricity “surplus,” there was some Taiwanese interest but it faded, leaving the field to Fletchers and its Swiss, and later French, partners.

Mr Cullen said that the Alussuise and Pechiney proposals had the advantage of modern technology and the backing of well-established world scale companies in stable countries.

They failed because there was no way New Zealand could supply electricity at a cost which did not imply a large charge on taxpayers or consumers.

“The latest proposal will also fail on that score alone,” said Mr Cullen.

“But it is absurd to suggest there is any future in importing lock, stock and barrel a second-hand smelter from a country New Zealand doesn’t even recognise. The size of the smelter alone shows it to have outdated technology and a very limited lifespan.”

Mr Cullen said he was sure the Taiwanese smelter would have inadequate environmental controls and would not meet the necessary standards.