$30m start on pulp mill



TIMBER company Gunns says it plans to make a $30 million start on its Bell Bay pulp mill later this month.

Tenders have already been let for the first of the earthworks to be completed over 16 weeks from late this month or early August.

The company then wants to move straight into the next construction stage of the $2.3 billion pulp mill in November.

The timetable, revealed to a group of business people at a pulp mill site tour yesterday, means that Gunns would meet its August deadline for a substantial start on the mill.

The deadline is a condition of state government pulp mill construction permits.

In other forestry news yesterday:

•Premier Lara Giddings said Gunns' sawlog contracts would be bought out.

•Resources Minister Bryan Green said Forestry Tasmania would share the profits of the Triabunna mill with the company planning to buy it from Gunns.

•Bass Greens MHA Kim Booth reiterated he would move a no- confidence motion in the government if a state loan to the Triabunna mill buyer was approved.

Gunns told the Australian Securities Exchange last month that it had started a major sale of assets to raise cash to meet debt requirements.

Gunns managing director Greg L'Estrange said at the time that the company would finance a start on the mill on its own if a joint venture partner could not be secured.

Mr L'Estrange told those at yesterday's site tour, which was organised by the Launceston Chamber of Commerce, that the timeline allowed 26 months to build the mill and it was expected to be operating by early 2014.

The company also released a final draft of the Bell Bay pulp mill economic development plan and local procurement policy prepared by Melbourne-based Essential Economics.

Mr L'Estrange said that the policy had been prepared to support the company's plan to use local suppliers for the mill whenever possible.

"Higher priority will be given to supplies from within George Town, West Tamar and Launceston local government areas," Mr L'Estrange said.

The economic development plan estimates that the mill would generate $3.7 billion in spending in the next 20 years and provide 3100 extra jobs across the state economy from the time that the mill was fully operational.

Launceston Chamber of Commerce executive officer Michael Bailey said that more than 200 businesses were represented on site yesterday after the chamber had invited both its own members and those from neighbouring areas.

"There was no question from Gunns regarding the finance needed for the mill and there was general excitement from the gathering about the project," Mr Bailey said.

"We believed that the time was right for us to link businesses to the project as best we could and that was the idea of the open day."