Tumut residents are hoping the mooted Snowy Hydro 2.0 project will bring new opportunities to the town, where 88 factory workers will next week be out of work.
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Carter Holt Harvey's particle board mill will stop production on Monday, with employees remaining on site until the end of the week to clean up.
The final days for the factory come at the same time as the $6.5 billion Snowy 2.0 hydro project moved a step closer to beginning, after the NSW government gave approval for a start to preliminary works, including a 3.1-kilometre tunnel in Kosciuszko National Park.
In a letter to suppliers, Carter Holt Harvey wrote a “significant scarcity of fibre supply in the Tumut region made it difficult for the company to operate the Tumut plant economically”.
An earlier attempt to sell the mill, which manufactures particle board for uses like kitchen and laundry construction, had been unsuccessful.
Carter Holt bought the plant from CSR almost 20 years ago.
Staff have been aware since November that the mill was likely to close and their union, the CFMEU, says the workers will be paid their full redundancy entitlements.
Some of the Carter Holt Harvey employees have already found new jobs, while the company will also pay for employment assistance through a private provide, with the offer of help in retraining for a new job.
It is believed AKD, the company which has previously bought two other Cart Holt Harvey facilties at Tumut, could be interested in the site of the mill once it is closed.
Julia Ham, a councillor on the Snowy Valleys Council, said this issue had been discussed at a monthly meeting last week.
She said while the factory workers were saddened by the closure of the mill, they were relieved that they were expected to receive their full redundancy entitlements.
Ms Ham said residents of the region were hoping new opportunities would come to the region as Snowy Hydro 2.0 began.
If it went ahead, there would potentially be massive benefits to the region, she said.
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Cr Geoff Pritchard, who is a medical doctor and long-time resident of Tumut, said he believed many in the community had not been surprised by the closure.
"I think the writing was on the wall," he said.
Cr Pritchard believes the Tumut region would benefit from forming closer links with other councils near Canberra, with tourism being one of the big winners.
Snowy Valleys mayor James Hayes said plans for Snowy Hydro 2.0 had put a "spring in the step" of people in the region.
