Soaring aluminium prices look likely to encourage Rio Tinto to press for extending its Tiwai Point sweetheart deal

As  the  price  of   aluminium breaks  new  records,  closing in   on  $US3000  a  tonne,  global  giant  Rio Tinto  must  be  having  a  quiet  chuckle  to  itself.

Only  a   year  ago it  was  threatening   to  close  the  Tiwai Point  aluminium  smelter,  consigning  it  to  the  scrap  heap  with  the  loss  of  700  jobs,  directly,  and  another 1600  indirectly.  For Southland’s  economy   it  would have  been  a  mortal   blow.

At  that  time, aluminium  was  fetching  only $1800  a  tonne.

Rio  Tinto   said   the  smelter  was  uneconomic  because the  price of  electricity  was  too  high.  In July   last  year it said  it would close    the  operation  because  of  high  costs and a challenging market.

The decision to close the smelter had disappointed politicians and local power firms as it came when the COVID-19 pandemic began to cripple the economy.

Some  economists  argued  NZ  should  let  it  go  and  divert  the  Manapouri  electricity, the  cheapest  in  the  country,   to  other  uses. Continue reading “Soaring aluminium prices look likely to encourage Rio Tinto to press for extending its Tiwai Point sweetheart deal”

Two inquiries aim to throw light on power blackout – but a switched-on govt should see it’s more than market failure

The  blame-game over  the  Monday  night   power  blackout   has  deepened.

Ministers initially  talked  of  “market  failure” – National accused the government of  being  asleep  at the  wheel

Then ACT said the  government’s energy  policy  was  “flawed”  because  it  puts  carbon emissions  ahead  of  affordable and  secure electricity,  through the ban  on  natural  gas  exploration.

The   Green Party,  for its  part,  contends the  “gentailers” are  more focused on chasing  profits than providing   more affordable,  more  renewable, and  more  secure  electricity  generation.   

Meanwhile  two small players in the electricity market have made a formal complaint to the Electricity Authority following Monday’s rolling blackouts. Continue reading “Two inquiries aim to throw light on power blackout – but a switched-on govt should see it’s more than market failure”

How the govt’s ban on oil and gas exploration has tightened supplies – and resulted in NZ importing 2m tonnes of coal

New Zealand  has   been   facing some of the most challenging energy market conditions in over a decade, with simultaneous shortages in natural gas and hydro-electric generation. The  consequence  has  been  sustained  high  wholesale electricity  prices,   creating issues for  electricity retailers without their  own  generating  capacity, to the point  where Electric  Kiwi – for  example – says it  is turning to  focus on  the Australian market.

Some  market-watchers  contend the  problems  trace  back  to  the  decision  of  the  Ardern  government to  ban  any  further  offshore exploration for oil  and gas.  That  drove  away   not  only  oil exploration companies   but also  the offshore  rigs   needed   to  complete  planned drilling  programmes.

Whether  that  is the  case  or  not, some  of  the  big generators  like  Contact  Energy  and  Genesis  are  said by  critics to  be  creaming  it – but  from  their  point of  view,  they  are   doing  their  utmost  to meet  the  high  demand  for  electricity.  Their  shareholders certainly  should be  happy   with the  healthy  margins  they are  reporting  while  wholesale  prices remain very  high. Continue reading “How the govt’s ban on oil and gas exploration has tightened supplies – and resulted in NZ importing 2m tonnes of coal”

Ministers pour $35m into community projects while $30m goes into hydro electricity (but in that case it’s to see if there is a case to invest more)

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Ministers visited Hawke’s Bay and Northland at the weekend to announce distributions totalling $35 million (or “up to $35m”, to be more precise).

A great chunk of that total was a sum “up to $32 million” approved in principle for the Hawke’s Bay Aquatic Centre to be built (although the press statement didn’t say where) in Hastings.  It will house a deep-water Olympic pool and a smaller ‘learn to swim’ and water safety education pool.

Finance Minister Grant Robertson made much of the provincial importance of the project, saying improved recreational water facilities were much-needed by residents of Hawke’s Bay.

“The health and wellbeing of the wider region, from Wairoa to Waipukurau, is … important. The new Aquatic Centre will be used by swimming clubs, a water polo club and the Royston Hospital Health & Fitness Gym at the EIT Institute. The Hawke’s Bay DHB will also use it for exercise and therapy such as aquarobics courses.”

Wearing his “Infrastructure” ministerial hat, Shane Jones announced the government’s investment of $3m into community infrastructure in Mangawhai and Kaiwaka. Continue reading “Ministers pour $35m into community projects while $30m goes into hydro electricity (but in that case it’s to see if there is a case to invest more)”