Wood pellet manufacturer Rentech received $4 million from the Northern Ontario Heritage Fund to help finish plant rebuilds in Wawa and Atikokan.
Rentech’s plants use Crown fibre to feed the province’s Atikokan Generating Station with other plans to export product to Europe.
A news release from Thunder Bay-Atikokan MPP Bill Mauro said the money is to assist the company with its plant conversation costs.
California-based Rentech needs money to finish off the conversations at both mills. Last month, the company said the costs to acquire and convert the plants in Atikokan and Wawa were higher than anticipated and were citing delays in construction and high labour costs to install equipment.
Rentech announced that its capital partner has increased its credit facility up to $63 million. Most of the funds are earmarked for plant completion, which is estimated to be $125 million to $130 million, up from $105 million.
The pellets made at Wawa are destined for Europe. The company reached a 10-year agreement to supply 400,000 tonnes of pellets annually to Drax Group, a United Kingdom electricity producer.
The Atikokan facility caters exclusively to Ontario Power Generation’s (OPG) former coal-burning power plant near the mill. Rentech landed a 10-year contract to supply the generating station with 45,000 tonnes of pellets a year. The company began producing pellets for OPG last May. Rentech expects Atikokan to be operating at full capacity within six to 12 months.
Stephen Roberts, Rentech Canada’s managing director, was grateful for the support.
“The partnership and support of the Northern Ontario Heritage Fund Corporation played an important role in constructing the Atikokan and Wawa pellet facilities. We look forward to continued success in Northern Ontario, and are proud of our contribution of new jobs and local economic development.”