Kraft mill sale talks collapse


The Town of Fort Frances is alarmed that talks between Resolute Forest Products, Expera, and the Province of Ontario, regarding the acquisition of the local kraft mill, have broken off.
The town said Wisconsin-based Expera has indicated a strong interest in acquiring the facility from Resolute, which would have resulted in 200 jobs at the facility and another 800 related to its operations.
The town also believes the acquisition could go beyond a re-start of kraft mill operations and potentially involve the remaining assets, including the paper machines.
The town said it has learned over the past two years, through extensive research and consultation, that the Fort Frances mill should be operational in a very productive wood basket known as the best forest in Ontario.
It cannot understand why Expera is unable to purchase an abandoned facility and acquire fibre at a reasonable cost from the local Crossroute Forest.
The town said it has been advised, on numerous occasions, that there is a specified allocation of wood for the mill in Fort Frances that still exists.
With that being the case, the town is asking why a willing buyer can’t purchase the facility and acquire wood at a reasonable cost?
It says the answer is that a single entity, Quebec-based Resolute Forest Products, controls the cost of the wood in this area.
Over the past year, the district municipalities and First Nation communities have lobbied the province for a model that would see all communities and stakeholders participate in the decisions related to forest management.
The town said it was advised in August by Natural Resources and Forests minister Bill Mauro that the government would not be implementing this enhanced sustainable forest licence model for the Crossroute Forest.
Mauro indicated this model needed to evolve over time.
This was the same message the town said it received from Resolute regarding the implementation of this model.
The town said it cannot understand why the province won’t establish an enhanced sustainable forest licence for the Crossroute Forest, and continues to allow Resolute to control the supply, flow, and cost of wood out of our district—and not for the benefit of the communities where the forest exists.
The town said it’s of the understanding that ministerial orders can be enacted to re-allocate the fibre for the ultimate benefit of all municipalities and First Nation communities in Rainy River District.
As such, it is urging the Wynne government to give this matter its immediate attention in the interests of stimulating job growth in this area.
Resolute spokesperson Seth Kursman did not comment on the talks with Expera, but told the Times this morning that the company will continue to consider its options.
He also said the company won’t be heating the mill over the winter.
“Resolute has made a significant effort to reposition the mill, exploring opportunities with multiple parties for a possible successor owner,” Kursman told the Times in an e-mail.
“In fact, we heated the mill for two winters to keep it in an asset protection mode,” he noted.
“This represented an expense that well exceeded $10 million for Resolute.
“We do not plan to heat the mill this upcoming winter,” he stated.
Kursman did say Resolute will continue to consider options.
“Sustainability is a guiding principle of our organization, and this is well-reflected in our efforts over the past 24 months to reposition this asset for the future,” he noted.