GUNNS has not finalised terms of agreement for a joint venture equity partner for its Bell Bay pulp mill despite its hopes to do so by the end of the financial year. But, Gunns yesterday told the ASX that it had made a decision to proceed with one company, understood to be from Europe, to develop a joint venture agreement for the $2.2 billion project. "Over the past six months Gunns has progressed a detailed process to identify partners for potential participation in the Bell Bay pulp mill," Gunns' ASX statement said. "Gunns has now made a decision to proceed with one company to develop a joint venture agreement for the project and is moving forward positively with the preferred partner on that basis. "The company involved has significant international experience in the pulp and paper sector." Pulp and paper analyst Robert Eastment, of Industry Edge, said Gunns would now have in-depth discussions over management details. "Gunns has said all along that it wants operational control of the project and I believe it still wants operational control of the project," Mr Eastment said. "They would be negotiating details of the management structure at the moment." Gunns said it was also continuing to progress negotiations with project finance banks, given market conditions in the sector had improved. In April, Gunns announced that it hoped to finalise the terms of agreement by June. It is not known how long it will take Gunns to come to agreement with its preferred partner. Tasmanian Chamber of Commerce and Industry chief executive Andrew Scobie welcomed the statement. "Tasmania needs a substantial increase in investment in infrastructure, plant and equipment to increase our productivity and gross state product," Mr Scobie said. The market reacted positively - Gunns' shares closing up 5.67 per cent. Shadforths principal Chris Elliot said the rise would be bigger once Gunns actually announced details of its finance package and its joint venture partner. "I would expect to pick up another 5 to 10 per cent on that," Mr Elliot said.