New buyer has eyes on mill: Dunderdale

A European company is looking at reopening the idled AbitibiBowater mill in central Newfoundland, a cabinet minister says.

Natural Resources Minister Kathy Dunderdale told the house of assembly Tuesday that an official with an unnamed German company toured the Grand Falls-Windsor mill last week.

However, she cautioned that the company's interest in the century-old mill is very preliminary.

"It's a pulp and paper company that sees some opportunity because Abitibi is withdrawing from its markets in Europe," Dunderdale later told reporters.

"It's a very credible company, but it's very early days."

Dunderdale said the company likes the access to a ready wood supply, a trained workforce and the promise of cheap power.

The Newfoundland and Labrador government owns the timber rights and hydroelectric power that AbitibiBowater had used, as it expropriated them in a 2008 law that triggered a NAFTA complaint.

The government revealed earlier this year that it had also accidentally expropriated the mill itself.

It's not known, though, how much it would take to get the idled mill up and running again, and Dunderdale said the government will only do so much.

"You know, if they're looking for big loan guarantees or big subsidies from the government of Newfoundland and Labrador, then it's not going to happen," she said.

Montreal-based AbitibiBowater shut down the Grand Falls-Windsor mill early in 2009, declaring it too expensive to operate amid a global slump in demand for newsprint. The company is trying to restructure itself while in bankruptcy protection.

NDP Leader Lorraine Michael said Dunderdale's comments raise more questions than they answer.

"One [question] is how soon? Number two, how viable is another pulp and paper company?" Michael said.

Another outstanding issue is environmental liability. Last week, after the Quebec Court of Appeal rejected Newfoundland and Labrador's bid to obtain secured creditor status in AbitibiBowater's bankruptcy hearings, Premier Danny Williams admitted taxpayers are on the hook for cleaning up the company's former sites in the province, including the Grand Falls-Windsor mill.