Tasmanian forests on line in bid to revive Gunns pulp mill

Monday, Jul 27, 2015

A bid to resurrect the Gunns pulp mill is close to fruition but may requi­re the Abbott government to approve the use of native forests as feedstock, provoking a monumental environmental stoush.

KordaMentha, liquidator of the collapsed timber company, is in the final stages of choosing a preferred bidder for the site and permit for the controversial $2.5 billion project, proposed for Tasmania’s Tamar Valley.

The liquidators indicated yesterday “all assets are involved”, ­including the permit to build and operate the mill, with two competing bids, although it is thought one may be for the site only.

Industry sources suggest New York-based private investment firm Anchorage Capital Group, which previously purchased most of Gunns’s debt, has been among those interested in the mill permit. Anchorage did not respond to requests for comment, while KordaMentha would not comment on who was behind the two final bids.

A wind farm proponent is known to have bid for the 550ha site, while there is speculation about a wood-burning biomass proposal, which could rely on existi­ng Gunns approval for such a plant.

Any pulp mill proponent would need to secure a large timber resource, with the mill requiring up to 3.2 million green tonnes of pulp wood feedstock each year.

However, KordaMentha has sold off Gunns’s tree plant­ations, previously earmarked as mill feedstock, to assets investment manager New Forests.

Some had hoped New Forests would be interested in striking a wood supply agreement with a new pulp mill proponent.

However, New Forests told The Australian it was not involved in any such talks and had no inten­tio­n of using its 150,000ha Tasmanian plantation estate plantations to feed a pulp mill. “We are focused on the growing export markets for plantation timber products from Australia to North Asia,” said New Forests sustainability manager MaryKate Hanlon.

“We are also exploring other market opportunities, such as export­ plantation products for biomass energy and plantation logs for veneer (but not at the Gunns site).”

The only other timber estate in Tasmania large enough to supply the pulp mill is state-owned native­ forest. As well as current production forests, the state has 400,000ha that was protected from logging under a 2012 forestry “peace deal” but which has since been earmarked by government for future harvesting.

However, the use of native forests would spark an environmental battle not seen since the Franklin Dam dispute of the early 1980s. It would also require a change to the federal permit conditions, which currently restrict the feedstock to plantation only.

The decision would rest with federal Environment Minster Greg Hunt, who said yesterday he was not aware of any such proposal. “Both the Tasmanian and commonwealth governments are clear that this (native timber feedstock) is not policy,” he said.

As well, the state government said while it remained “strongly supportive of the development of a pulp mill” it did “not support” changing the permit conditions to allow native forest feedstock.

However, conservationists are wary, with former Tasmanian Greens leader Peg Putt, the chief executive of environmental research­ group Markets for Change, warning that any use of native forest feedstock would be met with global opposition.

“There are many iconic forest areas that have been the scene of conservation battles over the last decade or two that are in the 400,000ha that would be potential feedstock,” Ms Putt said.

“There would be serious concern in the market and internationally in relation to any such pulp mill and the material that came out of it.”

There would also be anger at any use of Gunns’s existing approv­als to burn native forest wood in a biomass plant.

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