About 265 jobs will go at Komatsu Mining's Moss Vale plant as the company phases out operations by 2030.
Southern Highlands business leaders put the potential hit to the local economy at about $20 million a year.
Federal Labor MP for Whitlam, Carol Berry, will meet Komatsu on Thursday to ask why it is closing the plant and how it plans to support workers.
The decision to close a mining plant in the NSW Southern Highlands is being described as an "absolute gut blow" for workers.
About 265 jobs will go as Komatsu winds down operations at the Moss Vale plant before the scheduled closure in 2030.
A senior organiser with the Australian Manufacturing Workers' Union (AMWU), Nathan Everson, said workers at Moss Vale had been "blindsided".
"But there were also some workers there that were keeping it together for others who are a bit distressed by the news that seemingly came out of nowhere."
In a media release, Komatsu said it planned to close Moss Vale by 2030, shifting work to Rutherford (in the NSW Hunter Valley) and Rockhampton (in Central QLD) and outsourcing some fabrication and machining to Australian suppliers.
Komatsu executive Helen Gibson said the restructure was needed to "simplify operations" and respond to changes in the Australian market and customer requirements.
