|Kiwikorrels: Throw away|
An aluminium smelter has been in New Zealand since 1971. Aluminium is extracted from bauxite, particularly bauxite from Australia. The main owner of the factory is Rio Tinto, one of the largest multinationals in the world. In 2010, Rio Tinto made a profit of fourteen billion dollars. That includes the profit of ‘our’ aluminium smelter.
The factory is named Tiwai Point and is located in Southland, on the most southern point of South Island. About seven hundred people work there and about three thousand people’s jobs depend on the factory staying open. In the region the factory has dominated the economy. New Zealand has no authority over the company what so ever. On the contrary. Rio Tinto has the New Zealand government in a stranglehold. By threatening to close the factory they extort large benefits that help the company, but not New Zealand.
The process of aluminium extraction uses an enormous amount of electricity. Cheap power and a reliable power supply were the most important reasons to establish the factory in New Zealand, at the time. At the same time an underground hydropower station, the biggest in the country, was custom-built for the smelter. Nowadays, fifteen percent of all New Zealand generated power goes to the smelter. The electricity companies are (still) owned by the government, so the power supply is important for the New Zealand economy. The smelter pays next to nothing. Ordinary people are not allowed to know the exact amount per kilowatt, but it is generally estimated to be below 5 dollar cents, less than a quarter of the price other customers have to pay. The power supplied costs the taxpayers money, a lot of money, although it is not known how much exactly. Presumably the smelter is heavily subsidised by the government through the power supply.
It would be a slap in the face for the local economy if the smelter closed. Nevertheless, that is exactly what Rio Tinto plans to do. The factory supposedly makes a loss. Therefore, in 2011, the smelter was granted exemption from the CO2 levy. That is not to be sneezed at. Two ton Carbon Dioxide is produced to manufacture one ton of aluminium. Before 2010 the emission of the smelter was six hundred thousand ton.
In the meantime, near Tiwai Point, an enormous mountain of slag and other waste products arose. This waste is lightly radioactive and could hide a variety of other waste products. Not much is known about the consequences for the environment. Research is not really encouraged by the government and owners of the factory. Google Earth shows that the factory discharges straight into the sea through two different open canals.
But that is not all. Not one gram of bauxite is mined in New Zealand. The ore has to be imported by ship from Australia. After processing the waste stays here in New Zealand and the aluminium - the most expensive aluminium in the world – is shipped all over the world. The completely unnecessary detour between the bauxite mines and the buyers runs into billions of kilometres per year. Just the transport of the gigantic mountain of waste that remains after the processing is a totally needless waste of money.
The owners have decided to move the aluminium smelter to a third world country with even cheaper energy and workers. Tiwai Point is doomed to disappear. Even large amounts of subsidies and free electricity would probably not stop the move. Even the most optimistic Kiwi starts to recognise that. One hopes to stall this for another five years. Then the smelter-adventure is over.
For the country, the net profit of the entire venture has only been temporary employment that stops abruptly as soon as the multinational decides that. New Zealand stays behind with a few unpredictable disasters.
The Southland region will completely collapse. The residents will probably move to the big cities. The already high unemployment increases strongly in the entire country. A sudden increase of three thousand people entitled to unemployment benefits is hard to absorb in a small country like New Zealand.
The surplus of electrical energy will lower the price drastically and that also decreases the value of the government companies that have to be sold to lower the excessive national debt. It is to be feared that an enormous environmental disaster will be discovered, that will kill the thriving, but vulnerable oyster farms of Southland.
Rio Tinto is just one of the many multinationals that keep on moving to still cheaper countries to make an even higher profit there. The squeezed-out New Zealand is thrown away as a dirty piece of fruit peel.
After that it is the entire earth’s turn.
But we cannot throw that away.
The Dutch version of this article is published in the May-June 2013 edition of Holland Focus.