The struggle to re-open the Terrace Bay Pulp Mill is facing another obstacle.
The company has lost its major lender and the expected $40 million in outside investment. But officials with the Buchanan Group are remaining optimistic, and say they've already found another outside investor to fill the void.
Terrace Bay Pulp has been under creditor protection since it closed in February 2009. The province agreed to provide a $25 million loan to help Buchanan restart the mill but only if the company could also secure its own private financing. Buchanan lawyer Yves Fricot said their original lender pulled out of a deal last week, but they quickly secured an alternate source of financing. Fricot said the province is currently reviewing that lender to ensure they meet the requirements of the government's loan to the company.
"It’s obviously frustrating because it’s one of those problems that arises when you least expect it," Fricot said. "But we’re very happy that we were able to find alternate financing that we’re in a position hopefully to move ahead with very little interruption."
Before the closure, the mill employed over 400 people, and many of those who were laid off will start to lose their Employment Insurance benefits this summer. About 350 of them are represented by the Steelworkers Union. USW staff representative Herb Daniher said his membership has been on a rollercoaster ride that may currently be de-railed but they’ve remained opimistic that the mill will re-open.
"It’s in everybody’s bets interest including the community and the region that this thing gets resurrected and get back on track," Daniher said. "We’ve always sort of hoped for the best and prepared for the worst and this is maybe a hiccup or bump in the road hopefully no more than that."
Daniher said at least there is still a viable plan, and pulp prices are currently near record levels. A crucial vote by the mill's creditors is scheduled for Monday here in Thunder Bay. A positive outcome would allow Terrace Bay Pulp to exit creditor protection, and clear the way for a possible restart of the operation later this summer.
