Port Hawkesbury Paper gears up for restart
Opinions are mixed in Nova Scotia after the roller coaster weekend experienced in Port Hawkesbury when the mill deal fell through and then was back on again a day later.
There are a lot of concerns that the province of Nova Scotia is giving too much money to the mill, and many people are convinced that history will soon repeat itself and the mill will be back looking for more money.
Others are just grateful their loved ones will continue to have a chance for work at the mill, or supplying the mill, and won’t have to move west for employment.
Municipal Tax Rate
The County of Richmond, where the paper mill is located, had earlier won a court challenge to keep their tax rate for the mill at $2.6 million a year, as set in a 10 year arrangement with former mill owner Stora Enso.
However last night at Richmond County’s council meeting, the county decided to lower the municipal taxes for the mill to $1.3 million per year. This rate will be held until 2015, when the 10 year deal was set to expire.
The CBC interviewed a county resident who said, ”You know what I think of it? Every one of them is pretty god-darn stupid. Because what they’re doing here, they’re not looking after the people of Richmond County. They’re looking after the outsider.”
Meanwhile, The Chronicle Herald published an article today indicating the mill’s parent owner, NewPage Corp., will be the biggest competition for the restarted mill, and that a cross border trade war could be triggered.
The Chronicle Herald interviewed Verle Sutton, a publication-grade paper industry watcher who said, “The restart of the Port Hawkesbury mill will increase North American capacity of SCA (supercalendered paper) by roughly 35 per cent.” He went on to say, “This means there will definitely be closures of SCA machines in the U.S.,” Sutton said, noting that the UPM paper mill in Madison, Maine, could be among the first on the chopping block.
Nova Scotia’s Premier, Darrell Dexter, said he isn’t concerned about a free trade challenge. ”Our legal people said that there are always opportunities for competitors to want to make that case but that they believe this will withstand that,” he said.
Pacific West Commercial Corp. is headed back to the Nova Scotia Utility and Review Board seeking approval for the load-retention-rate mechanism.
The mill will no longer have the lower power rate that was agreed upon with Nova Scotia Power back when the power utility was going to be a partner in the mill. Now the paper mill will be paying the power rate that was approved by the review board earlier this year: 6.02 cents per kilowatt hour in the first year, which started New Year’s Day, 6.57 cents in the second and 6.78 cents in the third. This rate was approved for Nova Scotia Power’s two largest industrial customers – NewPage Port Hawkesbury and Bowater Mersey.
Pacific West Commercial Corp. is hoping for an official approval by Friday, because the current creditor protection period for NewPage Port Hawkesbury expires on Friday, and they need to sign a purchase agreement.
With help from the province’s restart fund ($1.5 million) maintenance workers and contractors have been working in the mill since September 10 preparing the machines for a restart.
Trucks of trees have been headed to the mill already, getting ready for the mill’s restart.
But the forest contractors may have been stretched too thin already.
Many of the wood suppliers for the mill were left holding the bag when the mill shut down last September. Peter Van Den Heuvel told The Chronicle Herald that he was partially compensated through the Woodsmen’s Lien Act for wood delivered to NewPage before it closed, but he still had to swallow $70,000 worth of wood he never got paid for.
To keep the forest harvesters from liquidating their businesses over the last year, the province provided some funding to keep harvesters going in northern Nova Scotia, selling wood to Northern Pulp and stockpiling the rest near Port Hawkesbury in hope of the mill reopening.
Another contractor, Claude Bourgeois, said he worked all winter for rates 10 to 20% less than what he was paid by the NewPage Port Hawkesbury. Bourgeois said, “Ron Stern is offering to continue at those same low rates we worked at last winter. We can’t do it. I’m working on a big line of credit right now. We’ll hear more from him this week, and I can only hope that he’s moved. We need him, but he needs us, too.”
Adjacent Biomass Facility
Nova Scotia Power’s biomass facility, that is being constructed adjacent to the mill, put out a request last week for expressions of interest in supplying biomass and related services.
The plant is looking to purchase of approximately 500,000 tonnes of biomass fuel for Nova Scotia Power’s 60 MW biomass plant, expected to be operational in the spring of 2013.
Nova Scotia Power will require suppliers to provide proof of origin of all biomass material, and proof that all material is produced in full accordance with provincial policy and regulations regarding biomass harvesting for electricity production. In the case of biomass produced from forest harvesting operations, priority will be given to biomass fuel, which meets Forest Stewardship Council (FSC) Chain of Custody criteria.
Nova Scotia Power hopes to create over 200 new, full time jobs in biomass fuel procurement, including positions in sustainable forest harvesting, trucking, chipping, fuel handling, forest management and silviculture. These jobs are in addition to the direct jobs related to the operation of the biomass plant.
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