Four New Zealand towns were built on cheap Māui gas. Twenty-five years after it peaked, the industry hasn’t come back.
The Māui gas field, discovered in 1969 offshore from Taranaki, began commercial production in 1979 and reached the peak of its share of New Zealand’s electricity generation — 24.6% — in 2001. By 2008 it was in visible decline. By 2024 natural gas accounted for 8% of generation, roughly a third of its 2001 share.
Māui built more than its megawatt-hours. Between the mid-1980s and the early 2000s, real industrial electricity in New Zealand was among the cheapest in the developed world. Four towns put large industrial facilities on that foundation: Tokoroa in the central North Island, Kawerau on the Bay of Plenty, Whangārei in Northland, and Bluff in the deep south. Each of those facilities depended, directly or indirectly, on cheap domestic energy. Each carried the rateable base and wage bill of its town.
The four facilities — the Kinleith pulp and paper mill at Tokoroa, the Norske Skog Tasman newsprint mill and adjacent Essity mills at Kawerau, the Marsden Point refinery at Whangārei, and the Tiwai Point aluminium smelter at Bluff — have spent the past quarter century facing the post-Māui energy regime. Two have closed their headline operations. One has been downsized twice. One has signed repeated last-minute power deals to stay open.
This article uses Stats NZ Business Demography, MBIE Energy Statistics and Energy Prices, and public closure records to describe what happened in the towns. The data is town-level by industry, back to 2000.
The price of industrial electricity doubled in real terms
Real industrial electricity prices for the two most electricity-intensive manufacturing sub-sectors moved as follows, in 2025 New Zealand cents per kWh, deflated by CPI.
| Year | Basic metals (Tiwai) | Wood, pulp, paper (Tokoroa and Kawerau) |
|---|---|---|
| 1998 | 10.0 | 12.4 |
| 2001 | 9.6 | 12.0 |
| 2008 | 11.3 | 14.1 |
| 2015 | 12.6 | 13.8 |
| 2020 | 13.0 | 15.7 |
| 2022 | 18.6 | 22.4 |
| 2025 | 22.7 | 23.7 |
Between 1998 and 2025, the real price of electricity for basic metals manufacturing rose 127%. For wood, pulp and paper it rose 91%. These are the two industries whose facilities sit in Bluff, Tokoroa and Kawerau.
Natural gas prices for industrial users follow a similar arc. MBIE’s industrial gas series, available back to 1999, shows real gas prices doubling over the 2000s and then moving sharply higher through 2021–2023. Cheap gas was the original foundation for cheap industrial electricity. Gas-fired generation set the marginal price on the national grid through the Māui era. When the field depleted, the marginal price moved.
Kawerau
Kawerau was built for forestry. At the 2000 business survey, the town of roughly 7,000 people had 1,350 people employed in pulp, paper and paperboard manufacturing and a further 490 in wood product manufacturing — combined, 1,840 workers in wood-and-paper processing alone, supporting more manufacturing jobs than the town would ever see again.
The Norske Skog Tasman newsprint mill, operating on the Kawerau site since 1955, had been the biggest of them. In June 2021, after 66 years, it closed. Norske Skog cited declining global newsprint demand. Roughly 160 workers were made redundant.
The Business Demography data shows the longer arc.
| Year | Kawerau wood + paper employees |
|---|---|
| 2000 | 1,840 |
| 2008 | 1,220 |
| 2013 | 830 |
| 2014 | 730 (trough) |
| 2020 | 990 |
| 2025 | 840 |
Kawerau’s wood-and-paper workforce bottomed in 2014 at 730, recovered slightly on the strength of Essity’s tissue operation and some specialty processing through the 2010s, and took a further step down after the 2021 Norske Skog closure. Total manufacturing in the district fell from 2,050 jobs in 2000 to 1,100 in 2025 — a 46% reduction.
Tokoroa
Tokoroa was built for Kinleith. Commissioned in 1954 by New Zealand Forest Products, the Kinleith pulp and paper mill was the largest of its kind in the country. Through the 1990s and early 2000s, Kinleith and its supply chain supported around 1,300 wood-and-paper manufacturing jobs in the South Waikato district.
Ownership has changed twice. Carter Holt Harvey bought it in 2002, then Oji Holdings of Japan took over in 2014 via Oji Fibre Solutions. Each transition came with head-count reductions.
| Year | Tokoroa (South Waikato) wood + paper employees |
|---|---|
| 2000 | 1,360 |
| 2008 | 820 |
| 2013 | 510 (trough) |
| 2019 | 1,080 |
| 2025 | 900 |
In 2024, Oji Fibre Solutions announced further restructuring at Kinleith, affecting around 230 jobs and ending paperboard production at the site. The 2025 Business Demography reading already captures some of that reduction. Total manufacturing employment in South Waikato is 1,950 today, down from 2,900 in 2000 — a 33% reduction.
Bluff
Bluff is effectively a single-facility town at scale. The Tiwai Point aluminium smelter, commissioned 1971, consumes roughly 12–13% of all New Zealand electricity. Unlike Kawerau and Tokoroa, Tiwai has not closed. It has come close, repeatedly — formal closure notice in 2013 (withdrawn after a power deal renegotiation), strategic review in 2020 (resulting in a further power deal), and the 20-year contracts signed in May 2024 with Meridian, Contact Energy and Mercury NZ, running to the end of 2044, that reduced the probability of near-term closure.
| Year | Invercargill aluminium smelting employees |
|---|---|
| 2000 | 1,050 |
| 2008 | 980 |
| 2013 | 840 (first near-closure year) |
| 2018 | 760 (trough) |
| 2025 | 910 |
Tiwai’s workforce is smaller than it was, but still substantial. Total manufacturing employment in Invercargill is higher in 2025 (4,050 jobs) than in 2000 (3,550), because the composition has shifted away from the smelter’s supply chain towards food processing, metal fabrication and machinery. This is the most resilient of the four towns’ headline facilities — partly because a smelter is harder to replace than a newsprint mill, and partly because its operators had the leverage to negotiate for a power price that newsprint operators did not.
The smelter’s real electricity cost per kWh has risen 127% since 1998 regardless of those deals, which is why every near-closure episode has been a renegotiation of a power contract, not a discussion about end markets.
Whangārei
The Marsden Point refinery was the only oil refinery in New Zealand. Commissioned 1964 by The New Zealand Refining Company, it ran for 58 years until April 2022, when its shareholders voted to convert it into an import-only terminal under the new corporate name Channel Infrastructure.
The closure of refining itself happened cleanly and publicly. The Business Demography data shows exactly when.
| Year | Whangārei petroleum refining employees |
|---|---|
| 2000 | 340 |
| 2010 | 380 |
| 2018 | 390 |
| 2020 | 410 |
| 2021 | 380 |
| 2022 | 290 |
Refining workforce dropped by 120 jobs in a single year as operations ceased on 1 April 2022. The earlier peak-staffing at 410 reflected the final years of refining before the shareholder decision. Total manufacturing in Whangārei held up over the period (3,250 in 2000 to 3,600 in 2022), because Northland had other light manufacturing growing at the same time. But the district lost its only facility of national significance.
Unlike Kawerau’s Norske Skog or Tokoroa’s Kinleith, Marsden Point was not primarily electricity-intensive. Its closure had a separate proximate cause — the refining margin on a small local market had become too thin relative to importing refined product from Asian refineries operating at scale. The wider mechanism — the end of the domestic-energy-price advantage that had made local heavy processing viable in a distant small market — applied to it, too.
What the data settles
- Four New Zealand towns had substantial industrial employment in 2000 that they do not have in 2025. Kawerau lost 46% of its manufacturing jobs; South Waikato lost 33%; Whangārei held overall but lost its refinery; Invercargill’s headline smelter workforce is 13% below its 2000 level despite a larger total manufacturing base.
- Real industrial electricity prices for the most electricity-intensive sectors roughly doubled between 1998 and 2025. Basic metals +127%, wood/pulp/paper +91%.
- These industries were built on cheap domestic energy. Between 1979 and 2001, natural gas share of New Zealand generation rose from near zero to 25%. Gas-fired generation set the marginal price on the grid during that era. Industrial electricity prices in real terms reached their trough in 2001, matching Māui’s peak share.
- The renewable electricity build has not replaced the price advantage. Renewable share of New Zealand generation moved from 63% in 2001 to 84% in 2024 — the grid is substantially cleaner. But wholesale and retail industrial prices are higher in real terms than at any point since the early 1980s.
What the data does not settle
- Causation at each facility is mixed. Marsden Point’s closure is primarily a refining-margin story set by Asian competition, not a domestic-electricity story. Norske Skog Tasman’s closure is primarily a collapse in global newsprint demand. What the cheap-Māui-era made viable, those global forces later made marginal. The local question is why the post-Māui regime left no space for any of them to remain competitive at scale.
- Tiwai is not in the past tense. The May 2024 contracts run to the end of 2044. A future closure remains possible; a graceful rundown equally so. The Business Demography reading for 2025 is a going-concern reading.
- The counterfactual is unavailable. Whether alternative electricity market structures, different transmission investment, or an explicit domestic industrial policy would have kept these facilities viable is not settleable from aggregate data. Other small economies made different choices and saw different outcomes; those comparisons are a separate article.
- Town-level wage data is not in the warehouse. The workforce counts here are headcount. What happened to those workers after each closure — whether they moved, retrained, or left the labour force — requires household survey data not yet ingested.
Methods
Employment figures from Stats NZ Business Demography (dataflow BDS_BDS_001 via the Aotearoa Data Explorer), employee count (EC_COUNT) measure, ANZSIC06 industry codes C14 (Wood Product Manufacturing), C15 (Pulp, Paper and Converted Paper Product Manufacturing), C213200 (Aluminium Smelting), C170100 (Petroleum Refining), and aggregate C (Manufacturing total). Territorial Authority codes: T019 South Waikato District, T026 Kawerau District, T075 Invercargill City, T002 Whangārei District.
Real electricity prices from MBIE Energy Prices, Table 6 (Annual c per unit, real, March year), series for basic metals and wood/pulp/paper industrial sub-sectors, deflated by Stats NZ CPI to 2025 prices.
Electricity generation mix from MBIE Electricity Statistics, electricity XLSX, sheet 6 Fuel type (GWh). Natural gas share of total generation calculated as Gas / Total.
Closure dates and job-loss counts from public reporting at the time of each closure announcement. Tiwai contract terms from Meridian Energy, Contact Energy and Mercury NZ’s 31 May 2024 announcement. Marsden Point conversion from Channel Infrastructure’s April 2022 media release.
All figures retrieved on 20 April 2026.
What does this mean for the towns now — and for the next generation of heavy industry, if there is one? Leave your thoughts in the comments.