Locals in Mataura, where around 10,000 tonnes of toxic 'ouvea premix' waste is being kept, believe they came perilously close to an emergency this month when floodwaters nearly inundated the storage facility.

The potential for ecological disaster prompted the local council to agree to a handshake deal with smelter management to fast-track the waste's removal.

However, council chief executive Stephen Parry claimed the deal was kyboshed by executives at the Australian mining giant.

Rio Tinto has failed to answer that allegation, saying only it was committed to removing the waste under the terms of a previously agreed multi-year plan.

That prompted a furious environment minister David Parker to threaten to sue the Australian mining giant for derelict behaviour.

Ms Ardern - visiting Southland in the aftermath of the floods which prompted a major emergency - said Rio Tinto's waste "occurred as a result of a profitable process from a company that I think needs to show some responsibility in helping resolve this situation".

"There has been a willingness from local leadership and central government to work towards a solution and now I'd like to see those who are at the centre of this problem coming to the table as well," she said.

Local New Zealand First MP Mark Patterson attacked Rio Tinto's behaviour and the use of taxpayer funds in the existing long-term deal to remove the waste.

"The aluminium dross in Mataura belongs to Rio Tinto. It's a disgrace that ratepayers and taxpayers are having to pick up the bill for its removal in the first place," he said,

"But this decision by the company, in a week in which record rainfall in Southland threatened to flood the paper mill where the substance is stored, is a real kick in the guts for our community."

Australian Associated Press