The jobs of TEMCO workers could be saved with the Bell Bay smelter attracting interest from potential buyers.
Unions say employees are buoyed after briefings from South32 management and optimistic for the future.
Treasurer Peter Gutwein described an announcement by the smelter's owners that a decision had not yet been made on TEMCO's future as "both bitter and sweet".
However, like the unions he was pleased that South32, which has postponed a decision on its future until next year, was considering divesting its Tasmanian operations.
The Australian Workers Union and Australian Manufacturing Workers Union say workers were told at briefings on Thursday that there were a number of potential buyers interested in the smelter
AWU assistant secretary Robert Flanagan was "very positive" about the smelter's future.
"The workers are really encouraged and happy to receive the news of potential buyers," Mr Flanagan said.
"At the very least it means that employees are guaranteed five months' work and that was not what we had expected.
"The tone of the language before had been that no-one had any confidence that Temco had a long term future.
"This is really encouraging and has been well received."
In a statement, South32 confirmed it was still reviewing options for manganese alloys smelters at TEMCO and Gauteng in South Africa.
It said it was still looking at options including "divestment, care and maintenance, or closure".
South32 says it will make a decision on TEMCO's future by March next year.
"We are assessing divestment options for both Metalloys and TEMCO and we have not yet made a decision on the way forward," the company said.
"We continue to engage with our employees, governments and all other stakeholders and we will provide a further update in the first quarter of next calendar year."
Mr Flanagan said he interpreted the announcement as the company working with governments on a sale.
"We don't know who tho interested parties are but we are pleased that there is hope," he said.
AMWU state organiser Jacob Batt also was pleased with South32's announcement.
"Absolutely, and hopefully there will be a positive outcome," Mr Batt said.
"We will have to wait until the first quarter of next year but at least there will be a few more months work."
Mr Gutwein said it was clear all options were being considered.
"The announcement by TEMCO is both bitter and sweet," he said.
"Whilst staff will go through a period of uncertainty, it was very clear from the announcement that TEMCO is looking at all options, divestment and looking for another owner is clearly on the table.
"Whilst it will be a difficult period obviously for both management and staff, it's certainly good news in that they continue to go through the process and the option of TEMCO continuing remains alive."
Labor MHA for Braddon Dr Shane Broad said the TEMCO announcement was a "mixed blessing".
"TEMCO is a massive employer for George Town and the government needs to look at other employment options for the region such as renewable hydrogen," he said.
Greens MHA Dr Rosalie Woodruff said she was concerned for workers who faced an "anxious situation".
Infrastructure Minister Michael Ferguson said the government had "left the company is no doubt that the business is supported".
"The Government's door is always open and we have expressed our strong support for the operation and the jobs and investment it supports," he said. "We appreciate South32's further advice that until any decision is made, the plant will continue operating."