Environment
A first-class pulp operation being planned for northern Tasmania …
ROBERT GOTTLIEBSEN, Business Spectator: , 12:06 PM, 29 Jun 2009
Take away all the controversy and emotion and we have a first class pulp operation being planned for northern Tasmania which will yield big profits for Gunns.
Now, of course, there is still a lot to happen. But if Gunns is able to get a European paper operator to enter detailed talks on a 50/50 joint venture, Gunns have clearly been able to satisfy the European group that this is an operation that will be based on plantation timber and will not pose a serious pollution problem for the Tamar River. The European group clearly believes that once the facts are known the controversy will subside.
The more responsible of the environmental groups want Gunns to prove their claims that the pulp mill will not affect native forests. But given the long battle, Gunns is concentrating on proving their claims to governments, their prospective joint venture partner, and, most importantly, the banks.
The Europeans will check every step of the pollution argument before they commit.
But to get to this stage means that the odds are this is a project that will go ahead and make Gunns a lot of money. Two months ago I reported that it was likely that an agreement would be reached by June 30.
Obviously it has taken longer than expected – but it’s now very close.
Gunns has around $100 million invested in the plant preliminaries, and if a joint venture goes ahead the Gunns balance sheet will be much improved.
I reported this around the time of the Timbercorp collapse and said that if the pulp joint venture proceeds Gunns would then be in a position to do a deal over the Timbercorp forests (Timbercorp’s only hope, April 23). Since then, Great Southern has also collapsed, so Gunns will be looking at their trees as well. So there is a lot riding on the establishment of this joint venture.