Written by Gordon Hoekstra
Citizen staff
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Tuesday, 03 November 2009 |
The shuttered Mackenzie pulp mill has been thrown a life line.
A newly-formed company, which includes B.C. Northern Interior regional investors, announced Tuesday it has reached a six-month agreement with Worthington Mackenzie Ltd. that allows it to take possession of the Mackenzie pulp mill.
The Mackenzie Pulp Mill Development Corp. also has an exclusive option to purchase the mill, but stresses it will not be operating the mill.
The corporation will be spearheading the hunt for a new owner, as well as trying to put in place elements that will make a sale more straight forward, including securing long-term wood fibre for the pulp mill, 175 kilometres north of Prince George.
The Mackenzie Pulp Mill Development Corp. has four investors: Fort St. James-based K&D Logging, the McLeod Lake Indian Band-owned Duz Cho Logging, Vancouver Island-based Interior Fibre Management and Tanner Elton & Associates.
Financial details of the deal were not disclosed.
The development corporation says its key focus is to protect the pulp mill's assets and infrastructure during the winter by keeping critical equipment warm. The company will not be firing up the boiler, but will be using electrical heat to keep certain equipment and areas warm and utilizing anti-freeze in other areas.
The new corporation expects there will still be some winter freezing damage, but that will become part of the estimated $22 million in maintenance costs needed to get the mill running again.
A program to ensure that key machines are lubricated and maintained will also be put in place.
The new company also plans to keep permits in good standing.
There is also a call for support for the Mackenzie pulp mill similar to that received by pulp and paper mills that were able to tap into the federal government's $1-billion subsidization program, meant to offset a U.S. pulp and paper subsidization program.
Mackenzie Pulp Mill Development Corp. spokesman Tanner Elton said while the arrangement is complicated, he believes it will allow the pulp mill to be sold and resume operations. "We wouldn't be doing this, if we didn't think it could be done," said Elton, who had been involved in an earlier failed attempt this fall to sell the mill to Chinese interests.
Elton said that a buyer is most likely still to be found in Asia, where the high-quality pulp that has been produced in Mackenzie could feed directly a company producing paper.
The mill must secure long-term access to reasonably-priced wood fibre, stressed Elton. Discussions are underway with the province.
The corporation has also said that it will need to rebuild the skilled workforce required to operate it. Elton said discussions are underway with the Communication, Energy and Paperworkers local 1092, which represents workers at the defunct pulp mill.
However, CEP 1092 president Carl Bernasky is skeptical the latest effort will result in the pulp mill restarting, in particular, because he believes the boiler must be run in order to prevent the plant from being damaged. Without the boiler running, workers believe that damage would be so extensive there would be no chance of ever re-opening the plant.
Bernasky said he is also displeased that new company is not involving unionized workers to help maintain the plant during the winter, workers with decades of operational experience.
Mackenzie mayor Stephanie Killam reacted cautiously to the latest development, saying she hopes the new players can get a sale quickly, the mill is restarted and employees can get back to work. The pulp mill has been shut for 16 months after parent company Pope and Talbot went bankrupt and the new owners, Worthington Mackenzie, were unable to restart the mill.
B.C. Forests Minister Pat Bell said he doesn't believe that access to wood fibre will be a barrier for the new players who he is meeting later this week. Bell said work has been done to determine what kind of timber is available in the area.
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Last Updated ( Tuesday, 03 November 2009 )
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