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Resolute intends to retain woodlands after sale of Thunder Bay pulp and paper mill

THUNDER BAY (From news reports) -- More than six months after it went on the market, the Resolute pulp and paper mill in Thunder Bay has apparently attracted plenty of interest, but remains unsold.

When the federal Competition Bureau approved the acquisition of Resolute Forest Products by Paper Excellence Group last year, it entered into a consent agreement with the company to address concerns that the transaction would likely significantly lessen competition for certain products.

To resolve this issue, Paper Excellence -- which purchased Domtar Corp. in 2021 -- committed to selling both Domtar's Dryden pulp mill and Resolute's Thunder Bay mill.

In February, a deal was struck to sell the Dryden operation to First Quality Enterprises -- a New York-based manufacturer of tissue products.

For the Thunder Bay mill, though, a Resolute spokesperson said that the sale process is continuing

"Speaking to specifics would be inappropriate," the spokesperson added.

If the mill is sold, the company intends to retain ownership of its sawmills at Thunder Bay, Ignace and Sapawe, as well as its existing woodlands operations which supply fibre to the pulp and paper mill.

According to the spokesperson, this means "Resolute will continue close commercial ties" with the pulp and paper mill.

If Resolute were to maintain control of the wood supply, the arrangement would be concerning for Unifor, the union that represents hundreds of Resolute workers in the region.

Stephen Boon, the northern area director for Unifor, said it's not typical for a mill to be sold without the wood supply attached.

"Area pulp and paper mills have been sold, sometimes over half a dozen times each over a number of decades, and the wood basket supplying those mills has almost always been sold as an integral part of each mill. It just raises questions and concerns for our members when the wood supply for the Thunder Bay mill is potentially carved away and under the control of another company."

Boon said that in an ideal situation, the pulp and paper mill, the wood limits and the supporting sawmills would be sold as a package.

"If this doesn't happen, we will have some serious questions that need to be answered about guaranteed access to an affordable wood supply for the Thunder Bay pulp and paper mill," he said.

Intergovernmental Affairs Committee 'excited' about mill's prospects
The sale of the mill has been on the radar of the City of Thunder Bay's Intergovernmental Affairs Committee, but not the wood supply issue specifically.

Coun. Kristen Oliver, who chairs the committee, said it has worked with Resolute to learn about the implications of the sale and is "pretty excited" about what it's been told.

"Recognizing that this mill is the most prosperous one that they have, and that there's a lot of great synergies that I think will align well with some of the research and development they're looking at doing," Oliver said.

"There are some innovative forest practices that could benefit this mill, and I think it should have a pretty bright future. Our biggest concern was that the mill would continue to operate, so any opportunity to identify that to the Ministry of Natural Resources and Forestry on the importance of it to the city is the advocacy that we've been taking on at the committee."

Mayor Ken Boshcoff, who also sits on the committee, told TBnewswatch he's somewhat wary of how things might unfold over the long term because "as a member of Parliament, I saw what happened in Fort Frances."

Resolute sold its long-idled Fort Frances pulp and paper mill in 2019 and retained the rights to the timber, which continues to feed its other operations in the Northwest.

The mill has since been demolished.

Thunder Bay-Rainy River MP Marcus Powlowski said he's heard the concerns about wood supply, but after speaking with numerous people in the forestry sector, most seem to feel "it's going to be OK" in the end.

He believes "any buyer of the mill would also enter into a long-term agreement with Resolute for the provision of the fibre, and it's in the financial interest of the sawmills and the paper mill to have this working relationship."

Powlowski also said he understands that the Fort Frances mill was a money-loser, while the Thunder Bay mill is profitable, so the two situations are very dissimilar.

"There probably isn't anything to worry about. Having said all that, it's incumbent on all of us who possibly could be able to have a say in this, to ensure that we're not starting down a path which eventually is going to end up, years down the road, in the demise of that mill."

Nonetheless, Powlowski believes "anyone in a political leadership position in Thunder Bay ought to have an interest in this question, given the history of [closures of] various enterprises in the forestry sector in Northwestern Ontario over the years."

When the Thunder Bay mill was put up for sale in October, a Resolute official described it as an exceptional asset that would attract a great deal of interest.

"We certainly think the mill is going to attract a lot of investment from interested parties,we hope ones with deep pockets, who will be in a position to invest because the opportunity of that facility is just enormous," said vice-president of corporate communications Seth Kursman.

Boon agreed.

"It's a very good mill, one of the top mills in eastern Canada for sure. We know there was a lot of interest, just from the amount of tours and potential buyers that walked through. We had the same thing happen with the Dryden mill."

Long-time forest industry analyst John Duncanson and mill manager Kent Ramsay have both described the Thunder Bay plant as a strong asset that's likely to continue operating for many years to come.

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