Mayor Tim Shadbolt 'absolutely shattered' to hear Southland smelter will close, threatening 1000 jobs

Invercargill Mayor Tim Shadbolt says he was "absolutely shattered" by this morning's news that the Tiwai Point aluminium smelter will close down.

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The Invercargill Mayor has been vocal in his opposition to the closure of the plant. Source: Breakfast

Plant owner Rio Tinto says that a report into the smelter had found it was no longer economically viable because a cheaper power contract was not able to be negotiated, and because of lower aluminium prices globally.

The plant is New Zealand's largest consumer of electricity, accounting for a third of the South Island's usage and about 13 per cent nationally.

Rio Tinto to close Bluff's Tiwai Point smelter within 14 months, 1000 jobs on the line

Mr Shadbolt said he had heard "absolutely nothing" about the closure before today and that he was "absolutely devastated".

"It's not just the jobs - it's the impact it's going to have on the community, on the families, on schools, on retailers - it's just absolutely shattering," Mr Shadbolt said.

"We've been through this road before - but this is different - they've never before set up a group to study the reality.

"The price of aluminium varies so much that it's been very difficult to follow what's been happening.

"We were confident because it produces the purest aluminium in the world - 99.98 per cent purity.

"We thought they'd do a review and it would show that this is a critical industry for the whole country - it's one of our major exports."

In short, Mr Shadbolt said the plant's closure is "the worst thing that could possibly happen" for Southland.