Corner Brook, NL -
Kruger says it will still have access to enough timber to restart a paper machine at Corner Brook Pulp and Paper (in Corner Brook, Newfoundland & Labrador), even if it relinquishes its right to some of its timber rights.
In Monday's (March 29) provincial budget, Finance Minister Tom Marshall announced some details of the government's plan to help the Corner Brook newsprint mill weather the current economic storm.
Now the only pulp and paper operation in Newfoundland and Labrador, Corner Brook Pulp and Paper will be getting $15.4 million in assistance from the province. That help will come in the form of increasing the province's share of the annual silviculture program, as well as foregoing the company's annual financial contribution to the forest inventory program, forest insect control program and managed land tax.
In exchange for this assistance, government has reached an agreement with the company for certain licensed timber rights to revert to the Crown.
Corner Brook Pulp and Paper has a long-term tenure on about two million hectares of land on the island portion of the province, holding timber rights on those lands until 2037.
Marshall's speech did not identify how much forested land will no longer be the paper company's to harvest, nor did it specify where those stands of timber are located.
No one from the Department of Natural Resources was available to elaborate on the agreement as of press time Monday.
DETAILS UNAVAILABLE
No one at Corner Brook Pulp and Paper was in a position to comment either and a spokesperson for the mill's parent company in Montreal did not have details of the agreement.
Jean Majeau, Kruger's senior vice-president of corporate affairs and communications, said recent curtailments in production did help make the agreement possible.
"It was a factor, but we still consider that we would have enough timber rights so that, if we were ever in a position to restart a machine, it would have no negative impact on that," said Majeau.
The reversion of certain timber rights was a price worth the government investment, said Majeau.
"The commitment that has been made today by government is very good news," he said.
"It allows us to keep the mill running until the market improves and the mill returns eventually to profitability. It makes a difference and it was crucial in these difficult times to have this support."
Meanwhile, the provincial government, through the Forestry and Agrifoods Agency, will invest $7.5 million to continue the Forest Industry Diversification Fund, originally announced in 2008.
This funding will help identify and develop new wood products and market opportunities to further diversify the province's forest industry.
