The provincial government has agreed to buy hydro power “when needed” from Corner Brook Pulp and Paper to help the struggling mill through more tough times.
In exchange, Montreal-based parent company Kruger “will work to identify new revenue sources from wood-based bioproducts” to diversify the operation and keep it afloat amid a dying global newsprint market.
In addition, the company has agreed to sell saw logs to Newfoundland’s three large sawmills, in line with its operating plans, which government says is “essential for the stability of the forest sector.”
The six-month agreement was announced in separate news releases from the company and government on Friday afternoon, with the province insisting any power purchased from Corner Brook Pulp and Paper, generated by its Deer Lake facility, won’t affect ratepayers.
(Deer Lake Power Station.)
It’s not clear how or why NL Hydro would need to buy extra power, given recent statements that there was plenty of capacity heading into the winter months. Nor has a dollar amount been attached to the agreement.
In November, Kruger was forced to “pause” operations for a week, citing “the difficult business environment in the newsprint sector.”
That once again created waves of concern and uncertainty in the west coast city and the province, with Mayor Jim Parsons calling the situation a “gut check.”
“This is the reason for our existence here,” Parsons said. “Every time we see an interruption in that stream of steam going up in the air, everyone worries.”
The government, meanwhile, says it’s continuing discussions with Kruger, adding they remain optimistic about the province’s forest industry.
Corner Brook Pulp and Paper employs more than 300 workers, with annual sales in the range of $130 million.
