Hundreds of jobs lost as Winstone shuts mills

Hundreds are set to lose their jobs after one of the central North Island’s biggest employers made the call to shut two of its mills.

Ruapehu District Mayor Weston Kirton has confirmed Winstone Pulp International will be closing its two central North Island mills due to unsustainable energy prices.

For the past few weeks Winstone had been meeting with energy company Mercury and government ministers to try and find a way to keep the Karioi and Tangiwai mills open.

Around 230 jobs will be lost.

Staff made 189 submissions to improve the mill and cut down on costs.
Photo: RNZ / Alexa Cook

A petition was launched last week to save the mill, fearing nearby communities would turn into ghost towns, Winstone being the main employer in the area.

Winstone Pulp electrician and union delegate Daniel Abernathy told Morning Report earlier on Tuesday there was a “bit of hope” a deal could be made with the government so the mills could stay open.

Abernathy said the company had responded positively to the 189 submissions staff made to improve the mill and cut down on costs. He said staff had been working hard to make sure the mills were in the best condition, should they remain open.

Resources minister Shane Jones has threatened to end the Electricity Authority if it did not work harder to regulate power prices, but the government was yet to intervene on the issue.

Electricity supplier Mercury Energy said it was “unfortunate” the mills could not be saved.

“We completely sympathise with individuals who are impacted by this,” a spokesperson told RNZ. “We don’t have visibility of discussions Winstone Pulp International may have had with government, other electricity suppliers or other factors that will have been part of this decision.”

‘Options to keep the mills open’

Energy Minister Simeon Brown said it was a bad day for the Ruapehu District. The government opted not to intervene in the closure, as it was a commercial decision.

Brown said the government was working quickly to ensure New Zealand had reliable and globally competitive energy prices and taking urgent action to lower the cost of energy by reversing offshore oil and gas exploration bans and fast-tracking consents.

The government had also set up an energy competition task force to tackle volatile wholesale market prices, he said.

Labour said the government would have received dividends from its majority share in Mercury.

“There were options to keep the mills open,” small business and manufacturing spokesperson Helen White said. “There are energy companies that have published significant profits over the last 12 months.”

She said there was “little other work” in the area.

“These jobs support the town, local community and small businesses, which will also face closure as people are forced to leave and wages dry up.”

Union response

In a joint statement, FIRST Union and E tū said they were “devastated”.

“We were hoping that the Government and wood sector would find a positive outcome and look for a way forward that’s profitable,” said FIRST’s Jude Sinai. “But they didn’t come to the party and couldn’t put together a long-term strategy to lock in power prices. Whatever was offered wasn’t enough.”

He said some staff had been there for decades, but only had two weeks to “prepare physically, financially and emotionally for this outcome”.

“This will have a huge ripple effect across the Ruapehu district – these jobs are a financial backbone for the region.”

FIRST Union general secretary Dennis Maga.
Photo: Jordan Dunn / RNZ

Abernathy said he considered his job at the mill would last until retirement.

“There’s disappointment we couldn’t make a go of it, and we want to thank the community for fighting and supporting us through this anxious time.”

FIRST Union general secretary Dennis Maga thanked the local mayors and Energy Minister Shane Jones “for joining the fight to keep the mills open”, but said the government was otherwise “asleep at the wheel with no care for the destruction that its previous electricity reforms have caused for workers, communities and businesses across the country”.

“We will be calling on [the Ministry for Social Development] and other government agencies to lift their game and provide the support needed for workers, their families and communities within the district.”