Power company Meridian Energy offered the owners of the Tiwai Point aluminium smelter savings of close to a quarter of a billion dollars to keep operating for another four years.
The company's annual meeting has been told Meridian offered Rio Tinto a package of changes to their supply contract, which would have delivered savings "well in excess" of $60m a year in return for a commitment the smelter owners promised to keep it open for at least four years.
"We believe that this offer was fair and in the interests of Meridian shareholders, the smelter owners and New Zealand more broadly," chief executive Noel Barclay told the meeting.
"Rio Tinto were not willing to make that commitment and instead chose to terminate the contract with Meridian."
Barclay called the decision "hugely disappointing" and the prospect of losing 13 percent of power demand would be disruptive for the energy sector and the Southland region.
The threatened closure of the smelter has led National, New Zealand First, and Labour promise to try to keep the smelter operating for longer.
The key issue remains the high transmission costs the smelter pays to bring the power from the Manapouri station, which it has long complained are too high.
"We have also noted the prime minister's announcement earlier this week that the government are also in discussion with Rio Tinto to provide the smelter with a discounted transmission bill, also in support of a longer exit term," Barclay said.
"To date nothing has been resolved and it appears unlikely that anything will be, until after the general election."
Barclay said Meridian was looking to minimise the impact on the company and the power market when the smelter did eventually shut.