Clayton COSGROVE

SOE Spokesperson

8 August 2013 MEDIA STATEMENT

Deal keeps smelter for less than four years

National has cut a short term deal with Rio Tinto that gifts the multinational $30 million of taxpayers’ money so the Government can get the Meridian asset sale monkey off its back, says Labour’s SOEs spokesperson Clayton Cosgrove.

“This is a short term deal that is huge win for Rio Tinto. National is so desperate to get Meridian sold off that it has given Rio Tinto a $30 million bonus to sweeten the deal and all the company has to do is keep the smelter open for three and a half years.

“Rio Tinto has also managed to halve its notice period. It will now be able to walk away with 15 months’ notice, instead of three years currently.

“The Minister of Finance himself has conceded this is not a long term solution. It’s designed to get Meridian off the block.

“By 1 January 2017 we will be back where we started. Rio Tinto will yet again have the right to walk away and will be in a position to hold the Government, taxpayers and the people of Southland to ransom once more.

“The people of Southland will breathe a sigh of relief but that sigh will only last until 1 January 2017. The Government has acted incompetently for months by refusing to intervene, then going over the top of the board for a weekend of negotiation, and then walking away.

“$30 million of taxpayers’ money should get the taxpayer far more security than three and a half years. Yet again this Government has been walked all over by a multinational.

“The Government must be open and transparent about this deal. It cannot leave New Zealanders and any potential investors in the dark,” says Clayton Cosgrove.

ENDS

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