Winstone Pulp International mill closures will be 'catastrophic' for Central North Island communities - local leader

A community leader says the closure of two Central North Island mills will be "catastrophic" for local towns.

Hundreds of people are set to lose their jobs after one of the Central North Island's biggest employers announced it will close down two of its mills - for good.

In recent weeks, Winstone Pulp International had been meeting with energy company Mercury and government ministers to find a way to keep the Karioi and Tangiwai mills open.

But the company made the call on Tuesday afternoon to close its two mills, blaming unsustainable spot energy prices.

Mercury previously denied it was responsible for the closures, saying the prices were similar to those charged to other large corporates, such as Tīwai aluminium smelter.

Community leaders and ministers had been rallying behind the scenes to cut a deal that would keep the mills open.

Liz Booker, who helped to launch the Rescue Ruapehu petition, told Checkpoint the closures would be "catastrophic" for Central North Island communities.

Despite "ministers at the highest level", workers and the mill company "fighting so hard to get to a solution", their efforts had been in vain, she said.

They were "just devastated ... there are other words I could use - but probably not tonight."

The 24-hour delay of a meeting with workers had been a "glimmer of hope that something may be achieved at highest levels, but obviously not", she said.

Checkpoint host Lisa Owen asked what the future held for the affected communities.

They were "effectively being cancelled", Booker said, "230 workers - all have families, we have big families - but even if it was two kids that's nearly 1000 people.

"If we have 1000 people leaving a community between Ohakune and Raetihi's - population 2300 - do the math."

Many workers had already left the region ahead of the announcement, she said.

"I was speaking to a mother yesterday, and her daughter had been texting up the night before [about jobs elsewhere]: 'Oh Mum, do you want this? Mum, do you want that?' because she's packing and going to Aussie. There's no work here."

The closures would "put a new ghost in ghost town", Booker said.

"We will fight tooth and nail to stay here. But we don't wanna go on the dole. We wanna feed our families and we wanna stay in our whare, but obviously, despite the massive intervention at the highest levels of the country - just not good enough."

Owen questioned whether the government had done enough to intervene and prevent the closures.

An Official Information Act request would reveal that, Booker said.

"I offered [Minister for Regional Development and Associate Minister for Energy] Shane Jones a cup of tea if he wanted to turn up, but he didn't turn up."

Booker doubted there were jobs available for those who were being made unemployed from the mills.

"The whole region in the southern Ruapehu is going to be decimated if our people leave - that's the reality."

The closures would mean government agencies would need to support local people, she said, but the bigger issue was the loss of "incredibly skilled" workers who were connected to those who had lost their jobs, such as nurses and teachers.

"If these people all are forced to leave - it's right across the board."

Among the jobs currently available in the region were a prison officer job in Tūrangi and a job running the school lunch programme in Taihape, she said.

"You certainly can't get any work up the mountain [in the ski fields]...

"We're going to have to pivot. In a way, we're staunch, we're tough - there could be some beauty in the pivot but it's gonna be tough for the next six months."

The closures would see many people apply for the Jobseeker benefit, but that would not help people with mortgages, she said.

"You try and sell your house ... a family of seven took out a mortgage three months ago."

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.

Closure 'unfortunate' - Mercury

Winstone Pulp International released a statement saying it "was not a decision taken lightly".

There had been a number of good ideas put forward to help improve its operations, but these were "not enough to offset the dual impacts of internationally uncompetitive energy prices in New Zealand, and the relatively low current and forecast market prices for pulp and timber".

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."

Job losses 'the last thing' region needs - NZCTU

The National Council of Trade Unions Te Kauae Kaimahi criticised the government for failing to bring a plan to the table to save the jobs.

"Our hearts go out to all the workers who have lost their jobs, and we stand in solidarity with them at this terribly difficult time," said NZCTU president Richard Wagstaff.

"The government had the power to keep the mill alive by creating a plan for power price stability, but they failed to deliver.

"This decision will be devastating for the Ruapehu district who were already dealing with high unemployment and a lack of opportunities. This is the last thing they need."

"Government has a responsibility to keep rural communities alive by supporting regional economic development and stepping in to show leadership when critical industries are struggling. Writing off whole communities is simply unacceptable.

"Local manufacturing plays an important role in our regional economies and that needs to be protected into the future. It is the role of government to guarantee this by implementing employment, regional development and Just Transition strategies that prioritise job creation and protection in rural communities.

"Everyone deserves good work that is secure and pays well, regardless of where they live. This decision shows we have a long way to go to make that a reality," said Wagstaff.

Workers feeling 'shock and disbelief' - union

Winstone Pulp electrician and E tū delegate Daniel Abernathy told Checkpoint they had hoped the government would come through at the last minute and give workers a reprieve, but the announcement was met with "shock and disbelief".

The government had come through with an offer of "absolutely nothing" at 4pm, he said, with the union being told no assistance had been given by the government.

When the people in the meeting received the news, they were "gutted", he said.

"The silence was deafening."

"You could hear a pin drop, it was just quiet - you could see people's faces drop."

Winstone had been "fantastic", he said, providing information and updates.

High power prices was affected all power users, he said, and it was a "countrywide thing" that was stifling exports, he said.

"Everyone's going to be hurting... if they don't change the way things are going, there's going to be hurting for all the big users of power in this country."

Abernathy told Lisa Owen he would have to find work locally, but was facing a big pay cut.

The closures would be "absolutely devastating" for the local economy, he said.

Workers spent their earnings all over the region and were "happy to do so".

Local businesses associated with the mills, such as cleaners and lawn mowers, would also be affected, he said.

"People are going to Oz because that's where the work is."

Taking families out of the area would affect local schools and sports clubs, he said. "That's a lot of things that are going to be hugely affected."

The government needed to ensure companies had a pricing structure for their power that allowed them to employ people and make money. "At the moment, you're sending all your best employees out of the country because you've got nothing here for them."