Friday, April 30, 2010

Cutting off our boughs to spite our trees

Now that we’re stuck with the Grand Falls-Windsor paper mill, the next question is what to do with it?

Actually, the next question is this: Where do paper mills go when they die?

The great scrap heap in the sky?

Well, no.

That’s just silly.

They go to the great scrap heap in Montreal known as American Iron & Metal Company.

Insolvent newsprint giant AbitibiBowater asked bankruptcy court in mid-April for approval to sell four closed paper mills in Ontario, Quebec and New Brunswick to Montreal-based American Iron & Metal for $8.7 million.

According to a Canadian Press story, the scrap metal company would also pay AbitibiBowater 40 per cent of the money raised from the sale of the paper machines.

Even if the machines are sold for scrap, American Iron would pay at least $5 million.

Even better, and this line is directly from the CP story — “The metals company would assume all environmental liabilities associated with the closed mills.”

That’s a big deal, considering when the Danny Williams administration made the “colossal error” of expropriating the Grand Falls-Windsor mill (government only intended to expropriate the water and timber rights, as well as a hydroelectric power station) it may have also taken on the environmental liability.

Which could cost untold millions to clean up.

Taxpayers could be off the hook altogether if the scrap metal company takes over the central Newfoundland mill.

AbitibiBowater has said the prospective owners of the decommissioned mills could do what they want with the sites as long as they aren’t used to produce paper.

But then would we be cutting off our boughs to spite our trees?

We may not be able to make newsprint in Grand Falls-Windsor, but could we make tissue or cardboard or even government expropriation forms?

We have wood, cheap power, a mill and an unemployed workforce.

If only will grew on trees.

1 comment:

George said...

I'm still of the thinking that at least part of the Grand falls mill can be converted for methanol production and the paper end of things would become secondary in nature, used as a by-product of the methanol production process.
Methanol is a wood alchohol that is chiefly used as an additive in bio-diesels and other petroleum products, not to mention being an important alternative for foodstuffs being used for the production of ethanol now. The beauty of it all is that the infrastructure for shipping this stuff out to market is in Botwood and we're also close to the North Atlantic refinery if they decide to buy it as a blending component for the fuels they manufacture.
I'm just wondering how come they haven't looked at this option yet, instead of throwing money at the Kruger problem in Corner Brook...
Good article!