Dec. 1, 2007 - Domtar yesterday said that it was informed that the Government of the Province of Saskatchewan is not prepared to participate in the financing of the redevelopment of the Prince Albert pulp mill as set forth in a Memorandum of Understanding (MOU) signed on September 12, 2007.

Montreal-based Domtar said the Saskatchewan government’s decision to withdraw its support narrows the company's options regarding the Prince Albert facilities. "Consequently, Domtar will terminate all work being done on this project," the company added.

According to a report in the Prince Albert Daily Herald the provincial government said it wants to continue discussions with Domtar regarding the mill’s reopening but it will not offer grants, loans or equity investments to the company.

“This is consistent with the position we have held since the MOU was signed (in September),” said Energy and Resources Minister Bill Boyd.

“We do not believe that a taxpayer bailout is the right way to go, but there are other things we can look at to ensure a bright future for the Prince Albert pulp mill and Domtar’s other assets in northern Saskatchewan.”

The Prince Albert facility were closed by Weyerhauser in April 2006. Domtar took ownership of the mill when it acquired Weyerhaueser's the Fine Paper business in March of this year.

The mill had an annual capacity of 280,000 tons of uncoated paper and 130,000 tons of market pulp. It employed nearly 700 hourly and salaried workers.

SOURCE: Domtar Corp., other news reports

See Realted story in the Prince Albert Daily Herald: