PROVINCE AND DOMTAR SIGN MOU FOR REDEVELOPMENT OF PRINCE ALBERT PULP MILL AND OTHER FACILITIES

The Government of Saskatchewan and Domtar have signed a Memorandum of Understanding (M.O.U.) toward the redevelopment of the Prince Albert Pulp Mill and Wapawekka sawmill. These developments, which could be operational by late summer/early fall 2008, will help stabilize and strengthen the forest industry in Saskatchewan.

"This memorandum provides a blueprint for the future of the forest industry in the Prince Albert area," Premier Lorne Calvert said. "It's a plan that will get people back to work in the P.A. pulp mill and the Wapawekka Sawmill, and provide new jobs when the facilities are expanded and a new sorting and chipping plant comes on stream. This partnership will provide a bright future for the people of this part of the province and the future of the forestry industry in Saskatchewan."

In structuring the M.O.U., both Domtar and the Province have sought to ensure the P.A. pulp mill will be a world class facility even with a Canadian dollar close to parity. As such, Domtar and the Province have agreed to the following:

• Domtar will work toward the redevelopment of the P.A. pulp mill into a Northern Bleached Softwood Kraft (NBSK) Pulp Mill producing 100 per cent Forestry Stewardship Council certified pulp for the North American and Overseas markets;
• The pulp mill will be expanded to produce green energy for sale into the provincial power grid;
• Domtar will seek a partnership with a third party to build and operate a chip plant near the mill;
• There will be a major expansion of the Wapawekka Sawmill to double its annual production;
• Domtar will relinquish its rights to the P.A. Forest Management Agreement (FMA); and 
• The Province and Domtar will ensure that First Nations and Métis people in the Prince Albert area are actively involved in the developments.

These actions by the Province and Domtar are subject to a number of critical conditions being met including the conclusion of engineering and feasibility studies, the development of a modern and competitive (operational) design for the pulp mill, consultations with First Nation and Métis people, and the negotiations and approval of final agreements by Domtar's Board of Directors and various regulatory bodies.

"In our discussions with Domtar, we agree that it's very important for First Nations and Métis to be involved in these developments," Minister responsible for the Forestry Secretariat Maynard Sonntag said. "We are committed to their ongoing participation in the opportunities that these developments will provide."

The Provincial Government could provide funding of up to $99.7 million for the developments outlined in the M.O.U.

"The Province could provide up to $32.5 million in grants to assist with the start-up of the P.A. pulp mill and the plant's green energy expansion," Crown Investments Corporation Minister Judy Junor said. "We could also provide up to $67.2 million in equity financing depending on First Nation's participation for an ownership position and capital upgrades to the Wapawekka sawmill, as well as outright ownership of the Big River Sawmill."

The Big River Sawmill will be redeveloped as a potential hardwood operation. Big River has been given a preliminary hardwood allocation from the P.A. FMA of 350,000 m3 for redevelopment. CIC and the Forestry Secretariat have engaged a consultant to work with the community of Big River to assess development opportunities and identify potential investors. CIC will provide an initial investment of $15 million for this project.

"I would like to thank the local people who have served on the Premier's Task Force on Forest Development over the past few years to advise us about the direction we should take for the industry," Calvert said. "I would also like to thank Domtar for working with us to arrive at this M.O.U.  We look forward to concluding final agreements in the near future."

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For more information, contact:

Jay Branch
Executive Council
Regina
Phone: 306-787-6349
Email: jay.branch@gov.sk.ca
Cell: 306-539-3994

Kent Campbell
Forestry Secretariat
Regina
Phone: 306-787-7352
Cell: 306-527-3243