(Updates with background on smelter's power consumption,...

(Updates with background on smelter's power consumption, statements from Rio)

July 9 (Reuters) - Global miner Rio Tinto (RIO) said on Thursday it will close its New Zealand Aluminium Smelters (NZAS) venture due to high costs and a challenging outlook for the aluminium market, in a blow to New Zealand's top power producer, Meridian Energy.

NZAS, which is New Zealand's only aluminium smelter and the country's single largest power user, consumes about 5,000 gigawatt hours of electricity a year, roughly 12% of the country's power, to produce 340,000 tonnes of high-grade aluminium annually.

Rio said it has given Meridian Energy (MEL) notice to terminate the existing power contract, which will end in August 2021, when the wind-down of operations is expected to complete.

"The strategic review concluded that the smelter ... is not economically viable due to energy costs that are some of the highest in the industry globally, coupled with a challenging short- to medium-term aluminium outlook," the miner said in a statement.

"Extensive discussions with a wide range of interested parties have failed to secure a power contract that will enable the operation to become both competitive and profitable," Rio Tinto said.

The smelter is a joint venture, with Rio holding a 79.4% stake and Japan's Sumitomo Chemical Co 4005.T holding 20.6%, and employs around 1,000 people directly. It made Rio an underlying loss of NZ$46 million ($30.25 million) in 2019.

($1 = 1.5209 New Zealand dollars)