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A Southland business leader has called for long-term certainty for workers at the Tiwai Point aluminium smelter as the plant’s owner confirms it has started talking with electricity generators about an extended presence.

New Zealand Aluminium Smelters (NZAS) yesterday announced it was exploring potential pathways with electricity generators beyond 2024.

"We understand the importance of providing certainty to our staff and the people of Southland. There is lots of work to do, but we believe there is a positive pathway to securing a long-term presence for the smelter," chief executive and general manager Chris Blenkiron said.

"Irrespective of any agreement, we will remediate the site. Work is already under way to remove waste, improve our environmental performance and continue building enduring relationships with our community."

Meridian Energy said it would engage with NZAS as part of its process and expected that would include contract negotiations.

Minister for Energy and Resources Megan Woods said the Government’s position had not changed.

"There will be no subsidy for Rio Tinto and we still expect environmental remediation of the site to occur," she said.

"We note NZAS’ assurances around its commitment to site remediation. Our overriding concern is that there is certainty for the people of Southland and New Zealand."

Southland Chamber of Commerce chief executive Sheree Carey said it was positive news that negotiations had started and she looked forward to an outcome that could give workers, businesses and the wider region some future security.

But the way negotiations had played out over the past two years had not been fair to workers and she hoped there would be decisions that would stop workers having to go through the same process every couple of years.

Forsyth Barr analysts said the statement was not a surprise and had been expected for some time.

The discussion would likely be a long process, they said.

"With Meridian Energy still smarting from the 2020 closure announcement and subsequent rock bottom electricity price, it will be wanting to get a much better deal. NZAS shouldn’t be expecting any helping hand from the Government either.

"Our view has always been that NZAS was likely to stay open. Aluminium is currently the highest-value use of that electricity, especially against hydrogen."

Southland Mayor Gary Tong said the news was welcome given the number of jobs linked to the smelter, although certainty about the future was needed.

Invercargill deputy mayor Nobby Clark said the announcement was good news.

"From a community perspective 2024 is looming and certainly with the number of jobs that are at the smelter, you’d want to have some certainty around that."

Invercargill MP Penny Simmonds said it was fantastic news, and the community had seen quite a different attitude from the smelter and its owner Rio Tinto.

"I think there’s a real willingness to work with the community and be part of the community. I’m very pleased that they’re working hard to be able to stay."

ben.tomsett@odt.co.nz