Pellet factory and data centre proposed for old Winstone Pulp site

A $300 million development that would establish a wood pellet factory and a data centre at the old Winstone Pulp mill site in the central North Island has been unveiled.

Te Ara Hiko was proposing to develop a manufacturing facility producing 180,000 tonnes of wood fuel pellets a year for domestic and export customers.

The proposal would repurpose existing wood-processing infrastructure using regional forestry resources and supporting employment in the wood-processing sector.

Meanwhile, Data Igloo was planning a data centre campus on the same site providing secure, energy-efficient storage, compute colocation and sovereign data storage and processing.

Due to soaring wholesale electricity prices, Winstone Pulp International permanently closed its two central North Island mills at Karioi and Tangiwai in 2024 after 45 years of operation.

The closure displaced about 230 jobs.

The mill was previously the main employer in the central North Island region, with most of its workers living in Raetihi, Ohakune and Waiouru.

Ruapehu mayor Weston Kirton said it would generate between 60 to 100 jobs.

"These successive blows have cost jobs, reduced business and visitor spending, displaced people and put pressure on Ruapehu communities and the wider central North Island economy," he said.

"Bringing productive activity back to Karioi is welcome news that could help rebuild confidence, create much-needed jobs and generate work for local suppliers, contractors and other businesses."

Local iwi Ngāti Rangi had opposed Te Ara Hiko's consent application because of proposed wastewater condensate discharges into the Whangaehu River.

Kirton said he remained confident a resolution could be found.

"Restoring employment and economic activity is important, but so is protecting our environment and the health of the awa.

"However, I am confident that Te Ara Hiko and Ngāti Rangi can work together to address these concerns.

"Building confidence in the environmental safeguards will be essential to establishing a successful, enduring operation.

"While I am positive about these opportunities and want to see them explored thoroughly, the outcome we should be working towards is lasting employment and investment that supports our communities while protecting the environment that sustains us."