The future of Southland's Tiwai Point smelter looks uncertain, with its owner, New Zealand Aluminium Smelters, saying further cutbacks are likely as it continues to lose money.
Tiwai Point, the country's only aluminium smelter, shed 100 jobs last month and the company says further cost saving initiatives will be pursued next year in an effort to make it a viable business.
About 700 people are employed at the Bluff smelter and there are a further 700 contract workers.
The company contributes more than $500 million to the Southland economy annually.
In a statement released on Tuesday, New Zealand Aluminium Smelters says it is facing increasingly difficult economic conditions and still losing money.
The Rio Tinto-owned company said it had completed its plan to reduce the size of its organisation by 100 roles by the end of November.
It said it continued to face increasingly difficult economic conditions and is still losing money.
The statement said the company was continuing to work with its key suppliers and stakeholders to reduce costs and grow revenues.
It said further cost-saving initiatives will be pursued in 2013 in an effort to make the firm a viable and cash positive business.
The Engineering, Printing and Manufacturing Union says there is a real danger the smelter will be closed unless the Government intervenes.
The union's Invercargill-based organiser, Trevor Hobbs, says the effects on the region if that happens would be horrendous.
Mr Hobbs says the smelter is facing a 30% increase in the price it pays for its power from January and it is up to the Government, as the 100% shareholder of Meridian Energy, to intervene.
"They have come out now and said that even though they have completed the exercise of shedding 100 full-time equivalent employees, they are still in the position of losing cash, so it points to the two issues - namely the power price and the exchange rate."
