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Resolute to construct new $50M sawmill in northwest Ontario that will supply chips to Thunder Bay pulp and paper mill; seeks to reposition idle pulp mill in Fort Frances

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Resolute to construct new $50M sawmill in northwest Ontario that will supply chips to Thunder Bay pulp and paper mill; seeks to reposition idle pulp mill in Fort Frances

January 31, 2013 - 02:06

MONTREAL, Jan. 31, 2013 (CNW) -Resolute Forest Products today announced the construction of a new sawmill in the area of Atikokan, Ontario. This investment reflects Resolute's ongoing commitment to the solid wood business and will provide significant economic opportunities for First Nations in the region.

The Atikokan project will involve the construction of a single line random length (16 ft) sawmill with an annual capacity of 150 million board feet. Approximately 90 people will be directly employed by the operation, and additional indirect positions will be created for hauling finished lumber and residual chips. Final site selection in the Atikokan area will be completed in the next few weeks, and construction is anticipated to begin in the spring, with completion targeted for early 2014. The capital cost of the project is estimated at C$50 million.

"We believe in our solid wood business and we're taking action to grow and improve it. The new random length sawmill will complement our existing lumber product mix in Ontario and will allow Resolute to improve its product offering to customers in central Canada and key markets in the United States," stated Richard Garneau, President and Chief Executive Officer. "We are particularly excited about the active involvement of First Nations in the project and the opportunity for shared economic benefit that this represents."

When the Atikokan project is complete and the Company's upgraded Ignace facility re-opens, Resolute will have three modern sawmills in Northwestern Ontario, with a combined production capacity approaching approximately 600 million board feet. In addition to producing lumber, the sawmills will also contribute to the long-term competitiveness of the Company's pulp and paper operations in Thunder Bay through the supply of residual chips, as well as support efforts to reposition the currently indefinitely idled pulp mill in Fort Frances.

Today's announcement was welcomed by Ontario Natural Resources Minister Michael Gravelle. "This is extremely good news for the economy in Northwestern Ontario, and specifically the Atikokan area. I am particularly pleased to see Resolute's proactive effort to involve First Nations in a manner that creates opportunities and shared benefit. Our Ministry has worked hard with First Nations and municipalities to increase opportunities for direct involvement in the rebounding forestry sector, and today's announcement is a real indicator of the progress we have made," said Minister Gravelle. "We welcome the additional investment by Resolute in Ontario. Over the past 18 months, the Company has announced over C$175 million of investments in the province, and I am certainly encouraged that a new sawmill in Atikokan could potentially make a positive contribution as Resolute continues to look at viable options for its Fort Frances pulp mill."

In commenting on today's announcement, Gary Allen, Chief of Nigigoonsiminikaaning First Nation, stated: "We are encouraged by Resolute's investment plans in our traditional area and look forward to working with the company to achieve our economic goals and establish business opportunities associated with this project."

Seine River First Nation Chief Earl Klyne agreed, stating: "We are pleased to see this announcement being made today by Resolute. It was most positive that the Company involved First Nation communities in the early stages of this project to identify areas of economic opportunity that we can pursue together."

Bill Mauro, MPP of Thunder Bay-Atikokan, also joined other public officials in welcoming this announcement: "As the MPP for Thunder Bay-Atikokan, I want to thank Resolute for this positive announcement. This capital investment will create a good number of construction jobs and significant long-term employment in the Atikokan area. This investment is also another important signal that the forestry sector continues to improve, and that Resolute will be a major employer in our region for years to come."

Thunder Bay-Rainy River MP John Rafferty expressed his gratitude towards this investment: "This is certainly good news for forestry workers and communities in the Northwest, particularly Atikokan. We should all be pleased with Resolute's commitment to sustainable forestry practices and their belief in strong communities and family-sustaining jobs."

"This is great news for our community and the surrounding area. These jobs will be critically important in providing economic stability for our region," added Atikokan Mayor Dennis Brown.