185 workers, 572 megawatts
Around 185 E tū union members at the Tiwai Point aluminium smelter will walk off the job on 4, 6, 8, and 10 May, launching rolling strikes against New Zealand Aluminium Smelters (NZAS), the Rio Tinto subsidiary that runs the plant. Bargaining has dragged on since 2024 without a collective agreement.
The dispute matters far beyond Southland. Tiwai Point consumes 572MW of electricity, roughly 13% of New Zealand’s total supply. It generates approximately $1 billion in annual export revenue, drives a third of South Port’s cargo, and directly and indirectly employs around 3,200 people. When this site hiccups, the national grid notices.
E tū Director Mat Danaher is not mincing words. He says the failure to reach agreement is “a deliberate anti-union tactic” and points to Rio Tinto’s 2025 financials to make the affordability case: underlying EBITDA of NZ$43 billion and profit after tax of NZ$17 billion. Rio Tinto says it offers competitive terms and will return to mediation on 20 May, leaving a two-week gap in which strikes will proceed.
The grid cannot afford unpredictable disruption
Tiwai is not just a factory. Since 2024, it has functioned as a critical piece of national electricity infrastructure.
In May 2024, NZAS signed 20-year electricity arrangements with Meridian Energy, Contact Energy and Mercury NZ that included demand response provisions allowing generators to request the smelter cut consumption by up to 185MW. Then-CEO Chris Blenkiron described it as “one of the largest single site, long duration demand response agreements, in terms of percentage of national grid, anywhere in the world.”
That mechanism was tested immediately. The Electricity Authority reported that from June to September 2024, the smelter’s demand response saved an estimated 330GWh of electricity, equivalent to 7% of New Zealand’s total hydro storage capacity. The consequences rippled nationally. New Zealand’s industrial electricity demand fell 9% year-on-year in October-December 2024, and MBIE’s 2025 energy report showed industrial electricity consumption fell to its lowest level since 1992.
The demand response system works because smelter curtailment is controlled and predictable. A strike is neither. And the timing is pointed: the Electricity Authority’s data shows larger 100MW and 185MW demand response options were in stand-down until before winter 2026. Just as those options come back online, industrial action introduces exactly the kind of unplanned variability generators cannot schedule around.
In February 2025, the smelter again wound back production due to potential energy shortage concerns, confirming that Tiwai’s production adjustments are now a recurring feature of how New Zealand manages its electricity supply.
A very expensive dependency
The uncomfortable backdrop to the workers’ demands is the scale of public support Tiwai has absorbed over decades. In 2024, Newsroom reported that the Electricity Authority had previously estimated every New Zealand household paid an extra $200 a year to subsidise the smelter’s below-market power deal. Environmental group Don’t Subsidise Pollution estimated the restored electricity allocation under the new contracts could be worth nearly $2 billion to NZAS over 20 years.
More recently, a March 2025 Cabinet paper recommended adjusting NZAS’s industrial allocation under the Emissions Trading Scheme at a cost to the Crown of approximately $74.7 million. The new power deals exposed NZAS to emissions costs for the first time, and the government moved quickly to soften the blow.
This is the context in which production worker Dee told RNZ: “We’re not being unreasonable. What we want is decent work. We want an agreement that recognises the job we do, the conditions we work under, and the contribution we make.” It is hard to argue with the logic. A company posting NZ$17 billion in profit, operating a site that receives tens of millions in Crown support and functions as nationally critical infrastructure, should be able to settle a collective agreement with 185 workers.
What business should be watching
The immediate risk is not a full shutdown. Aluminium smelting is continuous, and short rolling strikes are managed differently from a permanent walkout. But the ripple effects matter. South Port derives 20% of its profits from smelter-related cargo. Southland’s broader supply chain depends on the $406 million the smelter contributes to the regional economy.
The bigger concern is structural. New Zealand has built an electricity system that relies on a single privately owned industrial site for grid stability heading into winter. That site is now experiencing labour disruption its operators cannot control and generators cannot plan for. Mediation is not until 20 May. Winter is coming. And the country’s most important demand response tool is sitting in a picket line.
Sources
- Tiwai Point aluminium smelter workers announce strike (2026-05-02)
- Long-term future for New Zealand’s Tiwai Point aluminium smelter secured with new power deals (2024-05-30)
- The Tiwai Point smelter demand response in winter 2024 (2024-11-28)
- Lower Rio Tinto Al output cuts New Zealand power demand (2025-03-13)
- New Zealand Aluminium Smelter Industrial Allocation Adjustment – Cabinet Paper (2025-03-20)
- Tiwai certainty welcome, but concerns about $2 billion subsidy (2024-06-04)
- Tiwai: The importance of stability (2024-06-06)
- Tiwai smelter to wind back production again due to winter fears (2025-02-25)