Salient. Victoria University Student Newspaper. Volume 39, Number 14, 5 July 1976.
The People Vs. Comalco — Which Side Has Power? — Stop Power Cuts
The People Vs. Comalco
Which Side Has Power?
Stop Power Cuts
When it comes to electricity policy, New. Zealand governments have some very strange priorities. Electricity workers suffer attacks on their living standards, New Zealand consumers face accelerating power bills and power cuts, while big multinational companies get huge amounts of power at ridiculously low rates. The government goes out of its way to serve the big multinationals, and at the same time penalises New Zealand consumers and workers (like the P.S.A. electricity group). The chief beneficiary of present electricity policy is the Comalco Bluff aluminium smelter. It has a fascinating and revealing history.
Following secret talks in the late 1950s between the then Labour government and Consolidated Zinc Proprietary Ltd (of Australia), an agreement was signed in 1960 whereby the power potentials of Lakes Te Anau and Manapouri would be developed for the sole benefit of an aluminium smelting industry to be established at Bluff. Consolidated Zinc was given a 99 year right to use water from Te Anua and Manapouri for power generation. They were to construct, operate, and maintain the necessary generating facilities, damns, etc. Objections to the scheme were immediately raised by the Forest and Bird Society who presented a petition of 24,000 signatures to parliament in 1960.
In 1962, Consolidated Zinc (now called Comalco), told the government it could not finance the project. So the government offered to build the power scheme itself. A new agreement was signed in 1963 whereby the government would supply power to Comalco at the same cost as if Comalco had built the scheme itself. The cost to Comalco would be almost constant over the 99 year period.
Construction of the power scheme was dogged with problems, and the overall cost of construction, estimated at $66 million in 1964, had rocketted to $112 million in 1967 Opposition grew to raising Lake Manapouri, and in 1969, the Save Manapouri Organisation presented New Zealand s largest ever petition to parliament - with 264,906 signatures. Construction on the smelter began in 1969, and it was producing its first aluminium two years later. In 1975 it was using 235 megawatts of power, but it has a full allotment of 480 megawatts from Manapouri. At present, the electricity Comalco does not use from Nanapouri, is put into the national grid.
The Bluff smelter is run by New Zealand Aluminium Smelters Ltd., a consortium of Sumitomo Chemical of Japan (25%) Showa Denko of Japan (25%), and Comalco of Australia (50%). Comalco of Australia is in turn 45% owned by Kaiser Chemical Corporation of the U.S. 45% by Conzic Riotinto of Australia (itself a subsidiary of the massive Rio Tinto Zinc Corporation of Great Britain), and 10% by Australian and New Zealand shareholding. These 10% shares are largely held by insurance companies and the like, but a scandal was raised in 1970 when cheap shares were offered in New Zealand and Australia to leading businessmen, state servants, journalists and politicians. Offers were made, for instance, to Sir Dennis Blundell, Sir Richard Wild, Sir Clifford Plimmer, Wilson and Horton, Wellington
Raw materials for the smelter came from Comalco Industries of Australia, a parent of the Bluff smelter. Comalco mines aluminium are in Weipa in Northern Queensland, and pruifies it into alumina at its refinery in Gladstone, Queensland. It is then shipped to Bluff and reduced to molten aluminium in massive electrolytic cells called pots. The aluminium is cast into ingots and sold back to Comalco and its Japanese partners. Thus New Zealand Aluminium Smelters can adjust its buying and selling prices so that it does not make a profit on its smelting operations - this is in fact its policy.
The smelter is designed to run 24 hours a day all year, and when power is short for the rest of New Zealand, Comalco is assured of all it needs. Power is the key to why Comalco is here, and it is the key to why so many New Zealanders oppose it. The giant companies owning the smelter are here solely for the cheap power they are guaranteed (for 99 years). It pays them to incur all the shipping costs from Australia to New Zealand, and from New Zealand to Japan, just because the power they get here is so cheap.
- consumers face rising power bills and are told if lake levels drop there will be power cuts.
- large amounts of overseas exchange are spent on oil to fire power stations to supply New Zealand's domestic electricity needs.
- large North American companies are urging us to establish nuclear stations to supply our needs. They will build, supply, and maintain the plants, no doubt, making handsome profits in each sphere.
- the environment is threatened at Lake Manapouri and the Clutha Valley is to be flooded. In Foveaux Strait, cadmium levels have been measured at 7 times the standard set by the World Health Organisation. Cadmium is a natural pollutant from the fiords which was previously washed out to sea by the Waiau River, damned for Comalco.
The whole set-up at Comalco is a burden on the New Zealand people. There is widespread opposition to it. To draw attention to this state of affairs, the Campaign Against Foreign Control in New Zealand (CAFCINZ), is organising a demonstration at the smelter for the weekend July 31 and August 1. Buses will be taken down from at least Christchurch and Dunedin. Costs at this stage should be at most $20 for the weekend (from Christ-church). All enquiries from people interested in going, and from people wishing to support the demonstration should be sent to P.O. Box 2258, Christchurch. A $5 deposit now will ensure a place on one of the buses.
The demonstration will raise three demands at least.
- Whenever there are power shortages, Comalco gets cut off first, nor last as at present.
- Comalco should pay the same for its electricity as ordinary industrial consumers (i.e. about 10 times what it pays now).
- The exact price paid by Comalco each year should be published, (although some good estimates have been made, the actual figures are secret - for obvious reasons).
CAFCINZ has been active in exposing and opposing foreign domination of New Zealand, and hopes to bring to peoples attention just how much the multinationals dictate our lives. CAFCINZ does not believe in the hollow words of politicians, but feels people themsleves must take action to make any change in this state of affairs. Prime Ministers Kirk, Rowling and Muldoon have all promised "renegotiations" with Comalco, but nothing has happened. Now that the elections are over, Muldoon too is backing down on his pre-election promise. Of what is he scared?
We urge you to support the demonstration and help to make sure that a situation where a multinational giant uses 10% of the country's electricity at minimal rates (at the expense of New Zealand people suffering) will be ended, and will not happen again.