By RNZ

Hundreds are set to lose their jobs after one of the central North Island’s biggest employers made the call to shut two of its mills.

Ruapehu District Mayor Weston Kirton has confirmed Winstone Pulp International will be closing its two central North Island mills due to unsustainable energy prices, RNZ reports.

It follows attempts to broker a deal with Mercury and government minister in order for the mills to remain open.

Around 230 jobs will be lost.

RNZ reports that a petition was launched last week to save the mill, fearing nearby communities would turn into ghost towns, Winstone being the main employer in the area.

Winstone Pulp electrician and union delegate Daniel Abernathy told Morning Report earlier on Tuesday there was a “bit of hope” a deal could be made with the Government so the mills could stay open.

Workers heading into the Winstone Pulp International meeting after the closure of two of its mills. Photo / Alexa Cook, RNZ

Resources Minister Shane Jones has threatened to end the Electricity Authority if it does not work harder to regulate power prices, but the government has yet to intervene on the issue.

Kirton expressed deep concern and disappointment at today’s news.

“The closure is a massive blow to Ruapehu and our communities. Our immediate concerns are now with the people and communities affected by this decision, and we are committed to doing everything we can to support them through this incredibly difficult time.”

The council had already initiated preliminary discussions with Work and Income and iwi partners to coordinate support for affected workers.

Kirton said the council would work with other agencies to help the community navigate the challenging period ahead.

“We are committed to ensuring that there is support and assistance available to help them rebuild and recover. As challenging as this time is for many whānau, support services are available.”

Octopus Energy chief operating officer Margaret Cooney said it was hard to imagine the stress and upheaval for affected families and communities.

“Even though spot prices have come down in the past two weeks, contract prices used by industry are double what they were pre-2018.

“We have been experiencing sustained high prices in New Zealand for almost six years. The way forward is not to simply hope for more rain in our lakes, or to import LNG. This is simply not enough to address the underlying challenge of continuing high prices.”

Cooney said the Electricity Authority had been warned for years by industry and exporters that market arrangements had made electricity uncompetitive and prices too high for our productive sector.

“It is absolutely essential that the current review into the electricity market provides real action rather than deferring change.”

New Zealand urgently needed more competition and regulatory change to support better competition and investment in generation, Cooney said.