Duane Hicks
With the future of its Fort Frances mill and wood rights making headlines of late, Resolute Forest Products is speaking out about its role in ongoing efforts to sell the mill here and related matters.
In an e-mail to the Times, Seth Kursman, vice-president of Corporate Communications, Sustainability & Government Affairs for Resolute, said “the efforts undertaken by Resolute to find a new owner were significant.”
The company spoke to parties from China, Asia, Europe, Canada, and the U.S., and four companies visited the site, he noted.
Kursman added the efforts made by Resolute to keep the mill in “asset protection mode,” and available for repositioning over the last two years, also have been “significant.”
“The mill was taken down in a very orderly manner to ensure assets were available for redeployment should a new owner be found,” he said.
The costs incurred by Resolute to keep the mill site “heated and lit” were $17.5 million.
The operating loss since 2009 until closure this past January totalled $88.3 million.
Kursman also noted it has been falsely alleged that Resolute is against the notion of an enhanced Sustainable Forestry License (eSFL).
“Indeed, Resolute has been clear from the beginning—including with officials from the province and the Town of Fort Frances and their advisor—that it does not object to an eSFL,” he stressed.
He added this fact also has been relayed to officials from the Ministry of Natural Resources and Forestry, Ministry of Northern Development and Mines, the town, all companies Resolute spoke to regarding the local mill, and various ministers.
“However, we also have said this should be a discussion that takes place in an orderly manner,” said Kursman.
Comments that Resolute has not been a good partner to First Nation interests also are untrue, Kursman noted.
“Try to find another company operating in the northwest that has done more,” he remarked, adding there will be $100 million plus of contracts awarded to First Nations as a result of the company’s sawmill projects in Atikokan and Ignace.
The first set are contracts for the hauling of hog fuel,
sawdust, and sawmill residual chips between the sawmills and Resolute’s Thunder Bay complex, as well as the hauling of lumber from Ignace to Atikokan for planing there.
Over the six-year term of these contracts, the total value is in the $70-million range.
The second set of contracts relates to yard service contracts (such as woodyard operations) that will be handled by First Nation-related entities.
Over the six-year term of these contracts, the total value will be in the $30-million range.
These contracts are in addition to work already contracted to First Nation interests for site preparation and civil work related to the construction of the Atikokan sawmill.
Kursman said Resolute offered to put in place a joint-venture (co-generation assets), with 40 percent owned by First Nations, 40 percent owned by Resolute, and 20 percent owned by the Town of Fort Frances.
Any eSFL discussions should allow all of the towns in the region, including Atikokan and Ignace, as well as the First Nation communities, to be “constructive participants.”
Kursman said there also had been a reference in the media to the fact that high delivered fibre costs have been a deterrent to any deal coming together.
“The reality is that Eastern Canada generally, including Northwestern Ontario, is a high wood-cost region, and this is a problem/challenge endemic to the region,” he noted.
“To be clear, Resolute offered the same arrangement to each of the parties it spoke to,” Kursman said.
“If Resolute did the harvesting, fibre would be delivered on an open book, fully transparent, true cost basis,” he remarked.
“Parties looking at the mill also were given the option of harvesting their own fibre, with sawlog quality logs going to the sawmills and pulp quality logs going to the pulp mill,” Kursman added.
“This is, by the way, wholly consistent with the long-standing resource utilization aims of the province of Ontario.”
Resolute has been transparent with all potential buyers on the approach it was prepared to take in any transaction, stressed Kursman.
“Resolute behaved in absolute good faith in its discussions with all parties and made every effort to keep officials of the province aware of who was being talked to, the status of discussions, and the possible role that other interested parties could play in getting to a successful outcome,” he said.
“That included turning the mill over at no cost to a potential buyer and the retaining of all legacy costs,” he added.
“The town was also briefed on an as appropriate basis.”
Resolute’s investment record in Ontario, including in the riding of Kenora-Rainy River, is significant, noted Kursman.
“Resolute has been, and remains, the only forest products company that has made a major and strategic investment commitment to Ontario,” he argued.
This capital investment program is in the $200-million range, with about $180 million of that amount being spent in Northwestern Ontario.
Major projects include:
•steam turbine/boiler upgrades in Thunder Bay ($65 million);
•sawmill expansion in Thunder Bay ($10 million);
•pellet plant in Thunder Bay ($10 million);
•new random length sawmill in Atikokan ($70 million); and
•the restart and refurbishment of sawmill in Ignace ($20 million).
Fire orders
In related news, Resolute is looking into—and analyzing—orders from Fort Frances Fire Chief Frank Sheppard, who has fire safety issues with the shuttered mill here.
With all indications from Resolute being that the mill may not be heated in a manner that protects the fire protection system, the Fort Frances Fire Rescue Service has formalized the process by serving a number of orders on the mill manager.
The orders requires Resolute to follow the prescriptive portion of the Ontario Fire Code.
Resolute then will have the option of appealing the process as allowed by the Fire Protection and Prevention Act, or applying for relief under Division ‘A’ of the code.
This relief allows for the proposal of an alternative solution that can be developed by an engineer or architect licensed in the province of Ontario.
The fire chief, under Division ‘C’ of the Ontario Fire Code, can approve the alternative solution if supported by documentation and sound fire protection engineering principles.
