New sawmill proposal falling on deaf ears

Blackville Enterprises Ltd. has made a proposal to the government to re-open and modernize the Blackville sawmill without any government funding, and create 140 jobs.

The last couple of years have been rough for Miramichi Lumber.  They had trouble getting enough saw logs to run more than 20 weeks a year.  They had a fire.  And they are emboiled in a lawsuit with the province over accessing sawlog allocation and money owing to the government for business loans.  But the company has a plan - one that requires no further financial assistance from the government, a plan that will pay back what they owe, and will put 140 people to work.  Trouble is, it appears the government has stopped listening.

Recently, Blackville Enterprises Ltd - a new business to be used to acquire the assets of MLPI  - submitted a business plan to Opportunities NB, and made a presentation to the Blackville Municipal Council.

The plan would see $21 million invested in modernizing  the sawmill in Blackville as well as a $5 million investment in operating capital.  For $12 million, equipment from the MLPI location in Newcastle would be moved to Blackville, and new equipment added, to create a moden sawmill capable of producing 60 million board feet of lumber annually.  The new mill would automate the lumber stacking and be able to process stud size material. $3 million would be spent retrofitting the drying kilns and planer, and $6 million would build a pellet plant that would convert biomass, pulp and mill byproducts into 75,000 metric tonnes of white wood pellets.

Chief Financial Officer of MLPI says the company is ready to raise ALL  the money privately and get started on the project, but needs the government to respond to its business plan and agree with two considerations:  wood supply and transfer of MLPI assets to the new company. We are looking for the same type of commitment that was provided to NES so that we can complete the financing.

Raper says Blackville Enterprises would pay MLPI over time for the assets, and subsequently MLPI would have the cash to repay its debt to the Province in full.

Wood Supply

The proposed mill would consume 300,000 m3 of wood per year.  Raper says 100,000 m3 of that would come from First Nations suppliers and private woodlot owners.

MLPI has in the past been allocated 160,000 m3 of saw logs, and needed to trade other companies stud wood and pulp for saw logs in order to get enough material to run their mill.  The proposed operation would be able to use the entire tree, but would require an additional 40,000m3 of allocation from DNR.  Raper says that pulp (top diameter of 7-9 cm) is already being left on the ground in the woods after stud and saw logs are taken, and would not require more trees to be cut.

Raper says since MLPI has sent the new business plan to ONB, he checks in with them weekly to see if they have any questions, but they have yet to repsond to the business plan or any emails from MLPI.

The Province has not indicated what its intentions are with regard to the assets of MLPI, but after they scooped up the insurance cheque that was going to fund repairs at the sawmill, Raper says that move put 140 folks out of work.

Prospects for other pellet plant project

In March of 2014, Raper was also part of a group called Miramichi Fiber that put forth a business plan that included a sawmill, pellet plant, engineered wood product plant, and energy generation.  That plan also required additional allocation, and was not looking for an investment from the Province.

Five months later, the Province announced another group was doing a feasability study into a pellet mill, and said they would give NES (Northern Energy Systems)  an allottment of 378,000 m3 of softwood from license 3 (Nepisiquit - Miramichi).  (See related story HERE)

More than a year later, the feasability study is not complete, and Raper says without a sawmill supplying by-product, he questions whether the plan would be feasible.