REPORTING · 15th January 2010
Pat Bell, Minister of Forests and Range and Minister Responsible for the Integrated Land Management Bureau, confirmed this morning his Ministry will be assisting the Community of Kitimat with funding to perform a feasibility study regarding the purchase of the Eurocan Pulp Mill, which is scheduled to close at the end of this month.
Although he would not release details on the total funds required to perform the study, he did confirm the BC Government would be providing $40,000 through two Ministries. The Ministry of Community Development and Bell’s Ministry, Forests and Range, will each contribute $20,000.
We also confirmed yesterday, in a call to the Executive Director of Northern Initiative Development Trust, Janine North, the board will be discussing contributing a further $20,000 to the feasibility study when they meet on Wednesday next week, January 20.
Bell stated he had great trust and respect for the management and board of West Fraser, the company that owns the Mill, and their determination that the operation is no longer financially viable, but stated during a meeting in Terrace on December 2nd, “The 535 employees deserve a “sober second thought. I’m supportive of that.” Today he stated he hoped this would satisfy everyone’s questions.
The Minister described it will be a jointly funded report and independent feasibility study and stated that if it comes back with a finding that it isn’t feasible the government will have to look at other options for the community.
Mary Murphy, President of the Canadian, Energy and Paperworkers Union Local 298, spoke about the need for the study as well but expressed frustration in the delays and the lack of response from Minister Bell. Murphy stated they had sent letters on the 7th and 24th of December along with numerous phone calls but had not received a reply from the Minister, only talking to his secretary.
“I’m not aware that there are any burning issues that I need to be personally involved with.” Stated Minister Bell describing the various office staff personnel who were working on the funding and communicating on his behalf.
Murphy claimed the study will cost in the neighbourhood of $200,000 with traveling costs. The District of Kitimat, the Kitimat Chamber of Commerce and Envision Financial are all adding money to the study, as is the Union. She stated it was unfortunate West Fraser stated the Mill was not viable when they put it up for sale as it created a discouraging environment. West Fraser also announced they would be selling the Saw Mill in Terrace, which Murphy stated they would be looking at as well to add to a complete package.
B.C. Co-operative Association executive director, John Restakis, arrived in Kitimat on December 15, 2009, to share his insight into how the community might consider running the operations as a Co-operative, however the first step to complete is the independent feasibility study.
West Fraser has announced they will begin the shut down on January 31 and will take it to what is called a ‘Cold Shutdown’. In a manner that will allow the plant to be restarted at a future date it is estimated this shutdown alone will cost West Fraser $100 million. Murphy is hoping West Fraser will delay the full shutdown. A “Warm Shutdown” is what is performed when the plant is temporarily closed for maintenance of the operation. If the feasibility study is returned with a positive message and West Fraser does not have to expend the funds to shut down the facility the $100 million saved would be a nice advantage for the cooperative movement if West Fraser would be prepared to devote these already committed funds to the community. The Black Liquor subsidy West Fraser is about to receive from the Federal Government as a “Green Subsidy” is a similar amount therefore this consideration for the community would not have an impact on the production revenue of the Company.