Bosses at a company that recycles dross from the Tiwai Pt aluminium smelter say they are investing hundreds of thousands of dollars on their plant because they are confident a deal between the smelter and Meridian Energy will be "sorted within a month".
However, Stewart Hamilton, acting general manager of New Zealand Aluminium Smelters, said a time frame for resolution of the electricity contract negotiations had not been discussed but he remained hopeful of a positive outcome.
He could not say how much longer talks would take and it was not until he understood the complexity of the talks that he realised why they were taking so long, he said.
Taha Asia Pacific general manager Mark Egginton said directors of the Bahrain-based company were so confident of the survival of the smelter they had invested more than $500,000 in machinery and its sister company, Taha Fertiliser Ltd, could open an Invercargill fertiliser plant in about six months.
The Taha Asia Pacific plant recycles aluminium dross - the waste byproduct of the smelting process - which comes from the cast house at the smelter and landfills at Tiwai.
The metal recovered through the recycling process is returned to the smelter and the rest is used in the manufacture of phosphate fertiliser.
When the smelter reduced its production level, the plant got less dross but it was still producing enough, Mr Egginton said.
The plant had been operating at Tiwai Pt for about two years but after eight months had to replace all the equipment with machinery from Germany because dross from the smelter was more abrasive than the Middle Eastern variety, he said. "[It] got to a point where the equipment was down more than it was operating and was not producing the quantities required."
The company had also recently invested in a rotary dryer, Mr Egginton said.
An underfloor heating system to dry out the landfill dross had been installed at the plant but because of rain and excessive moisture in the landfill, the dross was not turned over quickly enough to process in the plant, he said.
The dryer, which was in the commissioning phase, processed 250 tonnes in one batch but was expensive to operate and only used once a week.
Major investments in the dross recycling venture showed Taha Pacific directors were sure the smelter would continue, he said.
"We are quite confident the [power negotiations] situation will be sorted within a month . . . that is why we continue to invest in the project here," he said.
Taha directors were negotiating to expand the business into the United States and Brazil.