Workers at two mills in the central North Island face another sleepless night as the decision on whether operations will be shut down is pushed out by another day.
Forestry company Winstone Pulp International, which runs Tangiwai Sawmill and Karioi Pulpmill, proposed to close the two sites indefinitely at a meeting last month. It would mean the loss of 230 jobs.
The final decision on the closure was expected today but, in a statement, the company said it had extended the time frame for a decision until Tuesday afternoon.
If it chose to shut the sites down, they were expected to do so by early October.
Winston Pulp chief executive Mike Ryan said the company could not keep operating due to skyrocketing power prices.
Energy costs had increased from $100 in September 2021 to $500 per MWh last month, he said.
“For comparison, our overseas competitors are paying between NZD60 to NZD100/MWhr. At the same time, other input costs remain high and market prices for pulp and timber are relatively low and under pressure.”
However, supplier Mercury Energy denied it was to blame and said its contract was “significantly lower than spot prices and comparable to the prices Winstone has noted their international competitors are paying.”
A group of local mayors met with the Prime Minister and Regional Development Minister last month and afterwards said they were “cautiously optimistic” about keeping the mills open.
Ruapehu mayor Weston Kirton, Kawerau mayor Faylene Tunui and Taupō mayor David Trewavas warned that the Winstone Pulp International crisis was only the “tip of the iceberg” unless an urgent solution was found for other export manufacturers facing similar pressures.
“There is no doubt that the Prime Minister and Minister Jones are acutely aware of what is at stake,” Kirton said.
“They share our concerns for the economy and our communities, and want to find a workable solution.”
Kirton said the Government had asked the three mayors to develop a proposal outlining what it would take to keep the mills operating.
“We are now working with urgency on developing a solution to put to them.
“The Government has committed to considering whatever short-term solution we can put forward while they work to establish a long-term fix to prevent such a situation from arising again in the future.”
