Power shares

[k14]

Great article here - https://www.newsroom.co.nz/oram-how-...ed-tiwai-point

I'm sure most have read it but I found it to be the most intelligible and balanced article so far on the Tiwai situation. Has me really wondering why there hasn't been some proper contingency planning by government over all the years, both Labour and National are equally incompetent in this regard. If the article is right and RT are solely focusing on the big picture, it could really be a flick off the switch next August and see you later. I still don't think the market is fully pricing in this option.

[horus1]

The article is correct.

[Balance]

https://www.reuters.com/article/us-r...82Q0EA20120327

I recall RT using the possibility of Malaysia as a negotiating tactic in its negotiations with Meridian and NZ government way back in the late 2000's.

We laugh at third world or developing nations at how eager they are to secure industries and jobs but in this case, the Malays told RT that they would not do the deal and secure a US$2 billion smelter investment as the power price RT wanted was plain ridiculous.

Time for NZ to wake up and move on with better use of the clean, green and renewable energy from Manapouri.

[bull....]

Great article here - https://www.newsroom.co.nz/oram-how-...ed-tiwai-point

I'm sure most have read it but I found it to be the most intelligible and balanced article so far on the Tiwai situation. Has me really wondering why there hasn't been some proper contingency planning by government over all the years, both Labour and National are equally incompetent in this regard. If the article is right and RT are solely focusing on the big picture, it could really be a flick off the switch next August and see you later. I still don't think the market is fully pricing in this option.

good article , shame the nz govt wasted 8 years of doing nothing for this day

[k14]

https://www.reuters.com/article/us-r...82Q0EA20120327

I recall RT using the possibility of Malaysia as a negotiating tactic in its negotiations with Meridian and NZ government way back in the late 2000's.

We laugh at third world or developing nations at how eager they are to secure industries and jobs but in this case, the Malays told RT that they would not do the deal and secure a US$2 billion smelter investment as the power price RT wanted was plain ridiculous.

Time for NZ to wake up and move on with better use of the clean, green and renewable energy from Manapouri.

Yes I agree. However the leave in August 21 scenario really is a bad outcome of NZ. There needs to be a way to soften the blow with at least a 2 year extension to allow both the grid to be upgraded plus some semblance of a recovery plan for Southland. If this was happening 12 months ago then I think a lot of people would have been less open to this plan but with the current uncertainty over where NZ will be in 12-18 months time it would be reckless to not try and eek out a deal.

It is rare I agree with Winston but I wonder if some deal can be done with NZ taking over the operation of the smelter and remediation liability for a 5-10 year alumina supply agreement from RT. Means that there can be a far more cushioned wind down than the hard exit currently being threatened. Unfortunately in an election year logic and well reasoned thinking are usually pushed to one side.

[850man]

Yes I agree. However the leave in August 21 scenario really is a bad outcome of NZ. There needs to be a way to soften the blow with at least a 2 year extension to allow both the grid to be upgraded plus some semblance of a recovery plan for Southland. If this was happening 12 months ago then I think a lot of people would have been less open to this plan but with the current uncertainty over where NZ will be in 12-18 months time it would be reckless to not try and eek out a deal.

It is rare I agree with Winston but I wonder if some deal can be done with NZ taking over the operation of the smelter and remediation liability for a 5-10 year alumina supply agreement from RT. Means that there can be a far more cushioned wind down than the hard exit currently being threatened. Unfortunately in an election year logic and well reasoned thinking are usually pushed to one side.

Do we want the problem of a 50 year old smelter or are we in fact better to bite the bullet onthis one and let it close down? Tiwai produces 0.5% of the world's Al production and prices are very low for Al right now. Getting into the Al game sounds like it would be a headache we could avoid IMHO

[iceman]

Thanks for posting fish. Very interesting reading

[Zaphod]

+1 Very interesting reading Fish. This is a fresh perspective that I haven't come across before.

Anecdotally, it seems that the average NZer believes that any pricing deal struck with Tiwai is manifestly unfair, and believe that their domestic power prices are artificially high directly due to the smelter.

[k14]

Do we want the problem of a 50 year old smelter or are we in fact better to bite the bullet onthis one and let it close down? Tiwai produces 0.5% of the world's Al production and prices are very low for Al right now. Getting into the Al game sounds like it would be a headache we could avoid IMHO

Yeah that's the $64k question. Is it better to let them go cold turkey or find some in-between scenario that softens the landing for NZ. I may have my rose tinted glasses on as I am a holder of a few NZ generators but surely NZ inc would be better off with a controlled shut down.

[k14]

+1 Very interesting reading Fish. This is a fresh perspective that I haven't come across before.

Anecdotally, it seems that the average NZer believes that any pricing deal struck with Tiwai is manifestly unfair, and believe that their domestic power prices are artificially high directly due to the smelter.

Agree, good article but looking at the resume of the writer I would have to add a few grains of salt to some of his views. I think in the MEL release it stated that their proposal has the option to reduce the costs of running the smelter from around the 80th percentile to within the top 25th world wide. If they have been paying such exorbitant rates why have they kept operating for 45 years past the original deal being tossed out? Understand the point on the credibility from a NZ government perspective though, not a good look. Do RT really want to put the boot in and leave with middle finger in the air or are they really just trying to get the best for their long term bottom line?