After months of uncertainty, PaperlinX confirmed to the Australian Securities Exchange yesterday morning that it was unable to sell the Burnie business.

One hundred and sixty-five TasPaper employees and 57 Silcar maintenance contractors will lose their jobs, taking to 531 the total number of job losses from the closure of the Wesley Vale and Burnie operations this year.

Workers will be made redundant from July 1, and will receive four weeks' pay for each year of service.

PaperlinX general manager of Tasmanian operations Jon Ryder said paper making would cease before the end of June, with the conversion department to be wound-up by the end of July.

Dr Ryder said that most employees were relieved that a decision had been made so they could prepare for their future but they were sad to lose an industry that had been so important to the region.

"The Burnie mill had been there for 70 years and the Wesley Vale mill had been there for about 35 years so a lot of people have done very well working for the company over the years and it is now an end of an era," Dr Ryder said.

The mills had been running at losses in the "substantial millions" for many years and Dr Ryder said that the increased cost of raw materials such as coal, oil and pulp, as well as the higher Australian dollar, made the business unsustainable.

He denied that there had been an under-investment in plant and equipment to ensure the business was competitive.

"We spent between $6 million and $7 million a year across both sites to upgrade and maintain the equipment we had," Dr Ryder said.

PaperlinX will become solely a merchanting company, with businesses distributing paper, sign and display, graphics solutions, and industrial packaging to a wide range of customers in Australia, New Zealand, Asia, Europe and North America.

The company said the overall total net cash cost of its exit from Tasmania would be up to $20 million.