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Terrace Bay mayor to discuss pulp mill's idling with natural resources minister

Paul Malashewski is disappointed, saying AV Terrace Bay came to Terrace Bay in 2012 bringing hope to residents
AV Terrace Bay will keep its pulp mill in a 'warm idle' state but no date has been set for resuming production (Leigh Nunan/TBT News photo)

TERRACE BAY — Anxiety is building in Terrace Bay and Schreiber in the wake of the announcement of the idling of Aditya Birla's pulp mill.

Some community leaders are already wondering if the Ontario government might be able to intervene, or whether a new operator might be found.

The company disclosed Jan. 2 that pulp production is being halted indefinitely because of prevailing market conditions.

It said about 400 employees are affected by the shutdown, which Terrace Bay Mayor Paul Malashewski described Wednesday as "sad news, for sure."

He said his community has been through a lot over the years "with ups and downs of the mill" that included multiple shutdowns under previous owners.

In 2012, India-based multinational Aditya Birla acquired the bankrupt Terrace Bay Pulp for a reported $300 million and renamed it AV Terrace Bay after the Ontario government forgave $24 million in outstanding loans to expedite the mill's sale and get it reopened.

"AV came to Terrace Bay, you know, bringing some hope to the residents. I'm disappointed with the outcome. The indefinite idling of the mill is a concern," Malashewski said.

The mayor of neighbouring Schreiber, Kevin Mullins, said, "We don't need this right now. We don't need it at any time. We don't want anybody out of a job. We just hope that it's going to be idled for a short time and a new buyer, or whatever the case may be, we hope it happens quickly."

Aditya Birla's announcement was brief, referred to the shutdown as temporary, and said "the mill will be put into a state of warm idle to facilitate a possible future restart."

Mullins said it's troubling that there is no date for resuming production.

Malashewski said he had spoken with AV Terrace Bay president Dennis Visintin about that, but "he wouldn't speculate when that would happen. It would be based, probably, on the price of pulp for one thing, and market conditions obviously, and the cost to manufacture."

He added that the company has indicated "they would probably entertain offers for the mill."

A spokesperson for Aditya Birla told Dougall Media in an email Tuesday that, "We will not be commenting further at this time."

Mullins said the idling of the mill impacts not just Terrace Bay and Schreiber, where "it's our bread and butter," but the entire region.

When asked if there's any way the provincial government might be able to step in, he suggested "It's definitely got to be looked at. I mean, pulp mills are getting few and far between now in Ontario."

Malashewski said Natural Resources and Forestry Minister Graydon Smith has reached out to him to say the government will do everything it can to get the mill running again.

A spokesperson for Smith did not immediately respond to an inquiry Wednesday from Dougall Media, but the mayor said he expects to meet the minister in Toronto later this month.

Mullins said Schreiber will work hand in hand with Terrace Bay in any effort to keep the mill viable.

When Aditya Birla purchased the mill 13 years ago, it initially planned to convert it to produce dissolving-grade pulp for manufacturing rayon.

But in 2019 it revealed that due to market conditions, it had put that plan on hold, and would continue to make northern bleached softwood kraft pulp.

At that time, the company said it had already spent $114 million on upgrades, and was undertaking further investments in the mill, which is now 76 years old.

— SNnewswatch