Russia's Baikal Mill Stays Closed, Future Uncertain

Feb. 10, 2009 - The Baikal pulp and paper mill in Eastern Siberia, Russia, which had hoped to resume operations today after closing in 2008 for financial reasons, has not been restarted, according to the Russian News and Information Agency, Novosti.

"Nothing has changed on the pulp market since October, when the plant halted operations. The company's launch, scheduled for February 10, will not take place," a spokesman for Baikal said.

Baikal announced in November 2008 that unless the situation improved by February, it would be forced to cut nearly all its employees.

The mill had 2,300 employees when it shutdown in October.

"The plant needs working capital to resume production, but the company does not currently have any," Baikal's spokesman said,

He added that no proposal had so far been made to cease production altogether.

Russia's Natural Resources Ministry in late-January reiterated its ban on the discharge of any waste into Lake Baikal, where the Baikal mill is situated. Lake Baikal contains 20% of the world's total unfrozen freshwater reserve.

In October 2008, the mill brought a closed-loop water purification system online after being hit with a number of court charges initiated by Russia's environmental watchdog, Rosprirodnadzor, to stop production at the mill and to impose a fine for the lake pollution.

However, Baikal said the cost to operate the closed-loop system has contributed to the mill's operation being unprofitable.

The Baikal Pulp and Paper Mill, which was built in 1962-1966, produces some 200,000 tpy of pulp and 12,000 tpy of sack kraft and kraftliner.

SOURCE: RIA Novosti, and other industry sources

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