New Zealand PM Ardern seeks to extend Rio Tinto smelter by 3-5 yearsNew Zealand PM Ardern seeks to extend Rio Tinto smelter by 3-5 years
New Zealand Prime Minister Ardern addresses the media after a debate in Auckland

WELLINGTON (Reuters) – New Zealand Prime Minister Jacinda Ardern said on Monday that she will negotiate to extend the operations of Rio Tinto’s aluminium smelter in the country by 3-5 years if she is returned to power in the Oct. 17 election.

Rio Tinto’s plans to shutter New Zealand Aluminium Smelter (NZAS) in Tiwai Point has become a hot topic ahead of the election, as thousands of jobs will be lost and the bottom line of the top power producers would be hurt by the closure.

The world’s biggest iron ore miner has said it would close the plant in August next year due to high costs and a challenging market.

“We are seeking to extend the life of the smelter between 3 to 5 years…,” Ardern said at a news conference in Invercargill in Southland, the country’s southernmost region where she is on a campaigning tour.

“By providing an extended time frame for the closure of the smelter we protect jobs now and give the community time to consider and plan for future opportunities…,” she said.

Ardern said if the ruling Labour Party-led government is returned to power it would work with Rio Tinto and state-owned electricity transmitter Transpower New Zealand to reach a fair price for transmission costs over the closure period, to lessen the impact on power prices for other consumers.

The government could provide support to Transpower to enable reduced transmission charges over the closure period, the ruling Labour party said in a statement announcing details.

Rio has been threatening to shutter the smelter for years as it demanded further subsidies from the government. Ardern said there would be no further direct subsidies from the government.

NZAS consumes about 5,000 gigawatt hours of electricity a year, roughly 12% of the country’s power. The smelter employs around 1,000 people directly and creates another 1,600 indirect jobs in the Southland region.

Ardern, 40, is poised to retain power at next month’s election, a widely watched poll showed on Sunday, although a recent COVID-19 outbreak has dented her support slightly.

(Reporting by Praveen Menon; Editing by Kim Coghill and Michael Perry)