More than 500 workers will lose their jobs when the nickel smelter and refinery in Thompson closes down in 2015.
Brazilian mining company Vale SA announced Wednesday that it is phasing out operation at the plant, closing it down by 2015.
Workers were being briefed about the closure just before 11 a.m.
Vale Inco is the biggest employer in Thompson.
The company's announcement was made at the same time it unveiled plans to spend more than $10 billion US expanding its Canadian operations over the next five years.
Vale operates businesses in Ontario, Manitoba, and Newfoundland and Labrador.
'A closure of this magnuitude should have been reviewed by levels of government and the union.' —Murray Nychyporuk, United Steelworkers
Cory McPhee, Vale's vice-president of corporate affairs, said the company will continue having a strong presence in Thompson.
The company intends to shift its focus in Manitoba to developing new sources of ore to be mined and milled in the province.
"We'll embrace new changes hopefully introduce new diversification ideas new ideas around innovation. We're commited to being part of that process," said McPhee.
He cited a lack of raw materials and tighter enviromental standards as the main reasons for closing the smelting and refining aspect of its business. The 500-plus jobs that will be eliminated account for about 40 per cent of the current Vale Thompson workforce.
Tito Martins, chief executive of Vale Canada, said the company will work with the community over the next five years to minimize the economic impact of the closure.
"What we want to do over the next five years is work together with our employees, with the local authorities and even the federal authorities," he said.
"The mines there are very important for us, so we need to find out ways to keep the city alive."
To that end, Vale said it would pursue development at its Thompson 1-D and Pipe-Kipper deposits in Manitoba. The 1-D Project is in the pre-feasibility stage and could see an investment of more than $1 billion.
Shutdown unacceptable: premier
The union representing the workers said it is frustrated and disappointed because workers were not consulted as the decision was made.
"There's a human element to it we're not giving the human element much respect because a closure of this magnuitude should have been reviewed by levels of government and the union," said Murray Nychyporuk, United Steelworkers Local 6166 president.
He said the company has promised there will be no layoffs but will eliminate the positions through attrition.
Hours after the announcement by Vale, Manitoba Premier Greg Selinger called on the owners of company to work with the province, the City of Thompson and the United Steelworkers union "to immediately seek alternative solutions to closing the smelter and refinery."
"This decision comes without due notice or proper consultation with our government and the City of Thompson," Selinger stated in a news release.
"Vale's intended course of action is unacceptable and our government stands firmly with the people of Thompson in saying this job loss will have a significant impact on the community and the province."
Over the years, the Manitoba government has had a good working relationship with the owners of mining operations in the Thompson area but "this decision, if it stands, would be a blow to the community," said Infrastructure and Transportation Minister Steve Ashton.