Rio Tinto, owners of the Tiwai Point aluminium smelter in Southland are carrying out a strategic review of the site, which will consider the possibility of closing it.
"Under current market conditions and with high energy costs, we expect the short to medium outlook for the aluminium industry to be challenging and this asset to continue to be unprofitable," chief executive Alf Barrios said.
"Rio Tinto intends to hold discussions with the Government of New Zealand and energy providers to explore options and identify economically viable solutions to find a pathway to profitability for the asset."
Closure is one option.
Mr Barrios said prices were at a historical low due to over-supply.
Up to 1000 jobs could be affected.
NZAS is a joint venture between Rio Tinto 79.36 per cent and Sumitomo Chemical Company Limited 20.64 per cent.
Energy Minister Megan Woods said electricity company Meridian would continue to talk with Rio Tinto and Sumitomo Chemical Company.
She hoped the smelter would stay open.
"The New Zealand Government has had a clear position since 2013 under the Key/English Government that there will be no more financial assistance from taxpayers for Rio Tinto, which is already supported by Meridian for the power it uses.
"This hasn't changed."
Ms Woods said Rio Tinto predicted a return to higher aluminum prices over the medium term.