Just one day after international mining giant Rio Tinto rejected a government subsidy offer to keep its Southland aluminium factory in operation, Prime Minister John Key is promising he’ll return to the negotiating table with a tasty chocolate fish.
The factory, located just south of Invercargill at Tiwai Point, is one of the largest aluminium smelters in the world and employs more than 700 full time workers. The plant has been operating since 1971, but Rio Tinto is now threatening to close it, a move that would impact thousands of jobs in the region.
The company cites massive financial losses, caused by a collapse of international aluminium prices and high electricity costs from its supplier Meridian Energy, as the reason for its possible closure. Rio Tinto has been working to negotiate a more affordable deal with Meridian in recent days, but has so far been unsuccessful. Yesterday the government stepped in with a deal of its own, but that too was rejected by the company.
This caused some to fear that the plant’s closure was inevitable, but the government is sounding an optimistic note today as it returns to the table with a new offer, promising Rio Tinto the same amount in subsidies that it offered two days ago, as well as a delicious chocolate fish that it hopes will change the company’s mind.
John Key explained the situation to Rachel Smalley on TV3’s Firstline this morning.
“Yeah, well, basically what we’re saying to Rio is we can’t give you a long term subsidy, but we can give you, you know, say this much in subsidies, and if you don’t walk away in the short term – which I think for them would be very expensive, by the way – then we’ll give you this chocolate fish. And I don’t think that’s unreasonable.”
Key added that, if Rio Tinto keeps the plant open even longer than its current three to five year obligation, there might even be an additional chocolate fish in it for them.
“But that’s something we’d have to assess down the road” he said. “Because obviously that’s a big treat.”
Asked what kind of chocolate fish Rio Tinto would be offered, Key said the government was still deciding between Cadbury or “some other knock-off brand.”
While news of the continued negotiations gave some much needed hope to the Southland region, some were sceptical about whether or not the deal was actually in the country’s best interests.
“Let’s say they take the deal” said Green co-leader Russell Norman. “What’s to stop them taking the chocolate fish and then packing up and leaving anyway? If we’re going to give them a chocolate fish, we should at least give it to them after they’ve fulfilled their end of the bargain; not beforehand.”
Rachel Smalley had some tough questions of her own for the Prime Minister this morning.
“How confident are you this will work?” she asked him. “Do we even know if we can still buy chocolate fish?”
“No well that’s a good question” replied Key. “I haven’t had one in a while myself, to be honest, but we’re pretty sure they’re still at, you know, the dairy.”
Rio Tinto has so far given no indication of how they’ll respond to the new offer, but the government is confident they can strike some sort of a deal, saying that if this latest effort fails, they’ll try offering the company an actual carrot.