New blow to Gunns

Nick Clark Mercury
GUNNS Limited has suffered another blow to its plans for a $2.2 billion pulp mill. The company has announced it will not seek an extension to a $15 million sovereign risk agreement. The agreement relied on Gunns to have begun construction of the pulpmill by November 30. In July Premier David Bartlett figuratively drew a line in the sand saying there would be no more extensions to the agreement after one was provided in July. The development is the latest in a series of portents for the project: Environment Minister Peter Garrett said that Gunns had approval for four of the 16 modules under the Environmental Impact Management Plan. Gunns has until January 5 unless a further extension is sought. Gunns share prices plunged this week from $1.17 to 76 cents (12.35 today) cutting market capitalisation to just over $500 million. Former Premier Paul Lennon raised serious doubts about whether it would proceed. The Solicitor General has told Gunns that it has to deal with the West Tamar Council to get access to council land for a water pipeline. The West Tamar Council says it has made its decision not to grant access based on its legal advice and will not revisit the issue. … the Wood Supply Agreement. FT has said it will stick with agreement. One of the “conditions precedent” of the agreement is that construction must commence by June 2008 and that it commence operations by December 2010. Read more here