Gunns pulp mill a step closer

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This was published 13 years ago

Gunns pulp mill a step closer

By Andrew Darby

THE last big obstacle to federal environmental approval for Gunns' $2.2 billion Tasmanian pulp mill is near to being cleared - but the timber company remains without a vital investment partner.

A draft $4 million hydrodynamic modelling report was submitted to the federal government this week as Gunns sought a federal signoff on the effect of effluents on Bass Strait.

''We are quite confident these studies have confirmed earlier work that was done,'' Gunns' sustainability manager, Calton Frame, told the annual meeting in Launceston yesterday. ''There won't be an impact on the marine environment.''

But nearly six years after it was controversially announced, company chairman Chris Newman revealed that the project central to Gunns' future was still unable to gain a financial partner.

"We had expected to announce a joint-venture partner by now, but the due diligence has taken much longer than anticipated,'' Mr Newman said. ''However, the most pleasing outcome is that our potential partners have confirmed the soundness of the underlying business case.''

Managing director Greg L'Estrange, newly promoted to the board from chief executive, said several interested parties remained cautious given the project's history.

He said the Swedish company Sodra, the first publicly to show interest, was now not part of the process, and there was no South American involvement either. The Wilderness Society's campaigner on the project, Paul Oosting, said a failure to obtain an investment partner was ongoing.

''They have had speculation on an investment partner in the lead-up to the AGM for the last five years, and there still hasn't been an announcement,'' he said.

Gunns confirmed that its woodchip exports were hard hit by the high Australian dollar, but the currency's strength was a mixed blessing for a project sourcing many key components overseas.

Mr L'Estrange said that with woodchip earnings down by $68.3 million in 2010 and an estimated underlying earnings before interest and tax of $51.4 million, the outlook was for another difficult year.

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