Canfor has cancelled the crucial chip supply with the Mackenzie pulp mill, despite a court ruling that the agreement has to stay in place.

On Wednesday, Canfor and the receiver in charge of selling the mill settled a dispute over the chip agreement. Terms of the settlement were not disclosed.

Canfor will be in court tomorrow to appeal the ruling to keep the deal in place.

The new owner of the Mackenzie mill still plans to restart the mill the northern B.C. forestry town and operate it "in the long term." Dan White, president and CEO of Edmonton-based developer Worthington Properties Inc., said his firm in on track to close the deal as scheduled later this month and hopefully restart the mill by mid-October.

Worthington's offer for Mackenzie was valued at $20 million if it included the valuable Canfor chip supply agreement, and dropped to as low as $6.5 million without it.

Many are very skeptical that this mill will be operating for the long term. Worthington Properties Inc. asset list includes mostly include residential and commercial developments. They had no forestry sector investment before purchasing the Mackenzie pulp mill.

Dan Rogers, a lawyer representing unionized workers at the mill, said while it's comforting to know White plans to operate the mill, there is still uncertainty.

"It's still unknown where the fibre is going to come from," said Rogers. "(The union) hopes this doesn't affect the ability to operate the mill, and are anxious to get back to work."

Source:
Mackenzie's new owner on track to restart mill without Canfor chip deal (New Brunswick Business Journal)