After months of negotiations, a $4million deal has been signed allowing the Ouvea premix stored in sites throughout Southland, including the former Mataura paper mill, to be shipped to an overseas buyer.
The $4million would be used to transport the premix, a waste byproduct of the aluminium-making process, to Bluff and then shipped to its new owner.
The Gore District Council’s share is $54,800 and last week the council signed off its share of the funding.
The sum will be paid for through rates.
Gore District Council chief executive Steve Parry said it would work out to be $4.50 per rating unit for two years.
The premix at the Mataura paper mill is to be the first batch transported to a prospective new buyer.
The deal was headed by Mr Parry who negotiated the money from funders including the Ministry for the Environment, New Zealand Aluminium Smelters, Invercargill city, Southland district and Gore district councils, Environment Southland and landlords.
“I think its a great outcome for the Gore district,” he said.
“It’s been the toughest negotiation I’ve been involved in.”
The owner of the premix, Taha Asia Pacific Ltd, went into liquidation in 2016, and this year the liquidator formally disclaimed the substance as onerous property.
The chain of events left the Gore District Council holding the expensive toxic baby.
There are about 22,000 tonnes of premix in Southland, at the mill and at Awarua and Invercargill sites.
Mr Parry could not reveal the name of the buyer of the premix as the final deal had not yet been signed.
“We’ve exchanged drafts. We’re in the advanced negotiation phase,” Mr Parry said.
“We’ve got a funding package locked and loaded.”
Taha initially stored the premix in the former mill without the council’s knowledge or a resource consent.
A resource consent was subsequently issued which included a condition a bond of $2.3million be paid, but Taha disputed the bond through the Environment Court and no money changed hands.
While Southland District Council did not have any premix stored within its boundaries it did contribute to the package to the tune of $131,200, Mr Parry said.
That council recognised there could be a flow-on effect if the premix stored in the papermill made its way into the Mataura River during a flood, he said.
The funding formula was founded on “old-fashioned horse-trading” methods and the formula for the local bodies was calculated on a population basis.
New Zealand Aluminium Smelters contributed the largest portion of $1.75million and the Ministry for the Environment $1.25million.
Mr Parry said the smelter had greater responsibility as the product originated from that company, but the smelter had paid Taha to make sure that company employed a zero-waste solution when dealing with the premix – that had not happened.
“We’ve been let down badly.”
While the landlords of the properties where the product was stored felt let down, they still had a role to play, he said.
The contribution from the landlords was calculated on how much of the product was stored in individual locations.
The amount those landlords had contributed was redacted in the document supplied to The Ensign to protect privacy.
Gore Mayor Tracy Hicks was pleased a funding deal had been signed and all parties could move on to the next phase of selling the product.
“It [the store of premix in Mataura] was a disaster waiting to happen on a whole lot of fronts,” Mr Hicks said.
He paid tribute to Mr Parry’s negotiating skills and said he had gone above and beyond to make sure a deal was struck.
Mr Hicks stressed the sending of the premix to an overseas buyer was not a dumping exercise – the intended end use for the product was known by the Ministry of the Environment.
Earlier, Environment Southland chairman Nicol Horrell said while Environment Southland had no statutory obligations in regard to the storage of the materials, councillors recognised they had an important role in the solution.
“This is an issue the community feels strongly about. There is a lot of concern and we are prepared to play our part in the resolution.”
The $250,000 will be funded from reserves.
The contribution each party has made to the removal of the Ouvea premix from sites in Southland:
New Zealand Aluminium Smelters$1.75 million
Ministry for the Environment$1.25 million
Invercargill City Council in its capacity as a landlord$31,061
Invercargill City Council in the capacity of a local authority share$214,000
Southland District Council$131,200
Gore District Council$54,800
*Details of the contributions from landlords have been redacted to protect privacy.