Ruapehu District Mayor Weston Kirton has confirmed Winstone Pulp International will be closing its two central North Island mills due to unsustainable energy prices.
For the past few weeks Winstone had been meeting with energy company Mercury and government ministers to try and find a way to stay open.
About 230 jobs will be lost.
A petition was launched last week to save the mill, fearing nearby communities would turn into ghost towns, Winstone being the main employer in the area.
Winstone Pulp electrician and union delegate Daniel Abernathy told Morning Report earlier on Tuesday there was a “bit of hope” a deal could be made with the government so the mills could stay open.
Abernathy said the company had responded positively to the 189 submissions staff made to improve the mill and cut down on costs. He said staff had been working hard to make sure the mills were in the best condition, should they remain open.
Resources Minister Shane Jones has threatened to end the Electricity Authority if it did not work harder to regulate power prices, but the government was yet to intervene on the issue.
