The Invercargill City Council has called for a meeting to be held on Friday to discuss the worsening situation at the Tiwai Pt aluminium smelter.
The meeting comes after the Government ruled out stepping in to save the smelter and the smelter's owner walked away from talks with the Government.
More than 700 people are employed by the smelter and if it closes its doors more than 3000 jobs in the South Island could be affected.
Invercargill Mayor Tim Shadbolt said the city council could help look for alternative owners and options for diversifying the economy so the region was not so reliant on the smelter.
"This is a wake up call that the smelter will close," Shadbolt said.
"One day the smelter will close so let's start preparing for it now."
Shadbolt said Chinese government officials had shown interest in the smelter following his visit last year but no potential buyers were lined up.
"'It wasn't such a crisis point at that time."
The smelter could continue for another 20 years under a new buyer, he said.
A smaller meeting will be held today between Mr Shadbolt, Venture Southland chief executive Paul Casson, city council chief executive Richard King and deputy mayor Darren Ludlow to discuss the Friday meeting.
It was hoped that keynote speakers would attend the larger meeting to discuss the situation with smelters internationally, Shadbolt said.
More clarification was also needed on the situation at the smelter and the conflicting stories between Meridian Energy and Tiwai, he said.
The meeting will be held at the Invercargill City Council on Friday at noon and will be open to the public.
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