Ruapehu mayor says data centre power fears are 'scaremongering' as mill site plan unveiled

The Ruapehu District has been hit hard by the loss of a pulp mill two years ago, but proposed new developments are bringing hope to locals.

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 - in a community of around 13,000.

"It was actually devastating," said local Airbnb host Andre Bezuidenhout.

He said neighbours had to sell their homes and families had to move out of the region to find work.

Last week, plans for a $300 million development that would establish a wood pellet factory and a data centre at the old mill site were unveiled - potentially creating up to 100 new jobs. Bezuidenhout said it would be "excellent for the region". As to the nature of the developments, he didn't seem to mind.

"It's just another business opening [up in] this area."

He said he didn't know much about data centres, but that he thought the region - where forestry was a strong industry - was a good place for a wood pellet factory.

Mountain Rocks Cafe & Bar owner Carl Christensen said anything that would keep people employed and families in the area where they had grown up would be a positive. He said the mill's closure had been tough on the community, with younger generations moving abroad for work.

"But [the community]'s pretty resilient and I think that's the reason why we've carried on."

He said dairy, forestry and agriculture had kept the region going, but more jobs would bring stability. He said local contractors were already gearing up to refit and redevelop the site.

"So it's going to be a huge win, you know, in the next short-term and then in the long-term."

Ruapehu District Mayor Weston Kirton said the council and other agencies had worked hard with the site's owners to progress new developments.

"We're looking for opportunities in a responsible way, of course."

But he said the community had struggled with unemployment and moving away from seasonal work.

"We are deprived of some of the things that our counterparts in the urban area have.

"So we need to have - when we get the opportunity - businesses because of our isolation. And the way we are at the moment, we rely predominantly on ski seasons... and rely heavily on farming."

Te Ara Hiko put forward the plans for the wood fuel pellet manufacturing facility, where 180,000 tonnes of pellets a year would be made for domestic and export customers. It would repurpose existing wood-processing infrastructure, use regional forestry resources and support employment in the wood-processing sector.

"It's similar to what we had before," said Kirton. He said it would provide "appropriate and sustainable" energy and "avoid potentially the use of coal".

Data Igloo was planning a data centre on the same site providing secure, energy-efficient storage and processing. Globally, the construction of large-scale data centres - especially AI ones - has caused controversy due to their high water and energy use. But Kirton didn't think it would be the case with this proposal.

"I think it's scaremongering to suggest that this business is going to take away power in any shape or form to local homes. It's just nonsense."

Data Igloo said there were sufficient resources available for its planned operations.

A spokesperson said: "Creating local employment and training opportunities is an important part of our plans."

It said further details of the development would be made public after engaging with the community.

Ngāti Rangi's pou ārahi Helen Leahy said the iwi supported quality employment opportunities. According to the iwi's research, half the people who had lost their jobs two years ago had left Ruapehu or worked outside the region, with a third still looking for work or only employed seasonally.

"Our concern is that this shouldn't be at the detriment of the environment, which we all rely on."

In particular, the iwi was concerned for the impact on the Whangaehu River, which flowed from the crater lake of Mount Ruapehu.

"So we have always been opposed at wastewater discharge and water take from that awa," said Leahy. She said the iwi wanted to see more information about the environmental impact of the projects.