By paNOW Staff

Domtar in agreement to sell P.A. mill

Mar 7, 2011 | 7:30 AM

Domtar announced this morning it will sell its Prince Albert assets – the closed Prince Albert pulp and paper mill.

The company entered into an agreement with Paper Excellence Canada.

Paper Excellence plans to turn the facility into a mill used for the production of dissolving pulp. It is a product used in the textile market.

In a press release, they said there are still some conditions for the sale to go through.

“The buyer and the Government of Saskatchewan reach an agreement concerning fibre allocation, the purchase of excess power and the division of responsibilities between the Government and the buyer for past environmental liabilities. A new collective agreement (must) be reached between the buyer and local labour union. The transaction is expected to close in the second quarter of 2011.”

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The provincial government said it will add about $200 million of investment to the province. It will add about another 200 permenant jobs on top of hundreds of temporary construction jobs to get the mill up and running.

Conditions met

• Direct allocation of 660,000 cubic metres of softwood pulp fibre from the Prince Albert Forest Management Area;
• Support for obtaining an additional 660,000 cubic metres of residual pulp fibre from existing sawlog allocation holders;
• The provision of a 2.5 million cubic metre softwood allocation in the form of a five year timber supply license;
• An agreement that will see SaskPower purchasing surplus electricity from a biomass power facility to be incorporated into the mill. That agreement calls for the purchase of biomass power at a price consistent with rates charged for this kind of project.

The province will maintain the existing environmental liability for a period of time when the mill operated as a Crown corporation prior to 1986 and $1-million will be allocated over two years, to train new mill operators.

About 700 people lost their jobs when the Prince Albert mill closed in 2006. It was sold to Domtar in 2007.

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