TERRACE BAY, Ontario (From news reports) -- AV Terrace Bay is halting production at its Terrace Bay pulp mill for an unspecified period, but calls the move temporary.

In a brief announcement late on Jan. 2, the company -- part of the Aditya Birla group -- said the shutdown is effective immediately and is the result of prevailing market conditions.

About 400 employees are impacted by the idling of the mill, which produces 320,000 metric tons of northern bleached softwood kraft pulp annually.

Employees were informed about the decision earlier in the day.

According to the statement, "The mill will be put into a state of warm idle to facilitate a possible future restart," but it's not clear whether the company has any date in mind at this point.

A company spokesperson declined a request for an interview, saying there would be no further comment.

Terrace Bay Mayor Paul Malashewski was travelling Tuesday and was not immediately available for comment, while the Steelworkers union, which represents most of the workers, has not yet issued a statement.

Jason Nesbitt, president of the Aguasabon Chamber of Commerce, said if it becomes necessary then "it's definitely in the government's best interest to step in and help, and make sure this mill gets back up and running."

Nesbitt said the mill not only supports hundreds of local jobs but also injects millions of dollars into Ontario's economy.

He said he hopes the people being laid off can find work elsewhere in the region such as at Greenstone Gold Mines or other area mines.

Rumours about the mill's future had been rampant in the community for weeks.

In October 2022, members of United Steelworkers local 665 and the International Brotherhood of Electrical Workers local 1861 ratified a new four-year collective agreement with the company.

At the time, AV Terrace Bay president Dennis Visintin said the deal provided certainty for mill operations and security for workers.

He also stated that he believed the mill was entering a favourable period for the kraft market.

"Coupled with our abundant and sustainably certified wood supply, this investment in our people positions us to be a strongly competitive provider of [northern bleached softwood kraft] pulp for the foreseeable future," he said.

The mill was previously owned by Thunder Bay-based Buchanan Group, and was acquired by Aditya Birla in 2012 after it was shut down and went into receivership.

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