The mill produces 105,000 tonnes of recycled containerboard annually and has two paper machines.
In a statement, the company said: "The likely closure of Holcombe reflects its high cost position – in particular rising energy costs against a backdrop of declining demand as the economy continues to slow.
"All of which has seen the mill move into an operating loss position."
The company said the book value of the fixed assets, including land and buildings, was €1.5m (£1.1m) on 30 June 2008.
Total closure and other costs, including a write-down of fixed assets, is likely to be €5m pre-tax.
Holcombe's mill manager was not available for comment.
Mondi manufactures and supplies corrugated board, craft paper and flexible packaging.
90 jobs at risk as Mondi proposes 'likely' closure of Bury mill
The jobs of 90 staff are under threat after paper manufacturer and supplier Mondi announced it had entered into a consultation process over the "likely" closure of its Holcombe mill in Bury, Lancashire.
