Ence to Seek Alternate Site for Uruguay Pulp Mill

Sept. 22, 2006 - Ence yesterday announced a rethink of its plan to build a 500,000 tpy pulp mill on the Uruguay River, which forms a border with Argentina, following pressure from Argentina.

The company is now focused on finding an alternative location, company president Juan Luis Arregui said.

"We do not know where the new site will be yet, but we will relocate because it is impossible to build ... in Fray Bentos as planned," he said.

Arregui made the remarks after meeting with Uruguayan Energy and Industry Minister Jorge Lepra and an official from the Uruguayan president's office.

"The conflict has nothing to do with the company," said Arregui. "It is not an environmental problem, it is a problem due to substantial practical difficulty."

Finland's Metsä-Botnia (Botnia), Europe’s second largest pulp producer, has also run into difficulties with its partially built pulp mill, based at a riverside site nearby.

The issue of the two mills is being fought over by Uruguay and Argentina at the International Courts of Justice at the Hague and at the tribunals of the Common Market of the South, a trade bloc which also includes Brazil, Paraguay and Venezuela.

The Ence plant represented an 800-million-U.S. dollar investment and was originally set to be in Fray Bentos, some 310 km northeast of the Uruguayan capital city, Montevideo.

Ence fired 40 workers in Montevideo, some 60 percent of its Uruguayan workforce, after the Thursday announcement.

On [Sept. 19], Botnia also suspended work on its plant, citing a lack of personal security for its workers.

The total investment in the two plants would have been 1.8 billion dollars.

SOURCE: Xinhua

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