THE AUSTRALIAN

TIMBER giant Gunns is on the verge of signing a joint venture deal with Swedish firm Sodra to build its $2 billion Tasmanian pulp mill.
The Australian has learnt that Sodra, one of the world’s biggest producers of pulp for paper, has commissioned a consultant to report on the mill project ahead of an imminent decision on a joint venture.

That report, by Australian-based project consultants, will be presented to Sodra tomorrow in time to allow a potential announcement with Gunns by the end of the month.

It is understood Sodra has hired Sydney-based consultants Evans & Peck to report on the position of stakeholders, including opponents of the mill, before making a final commitment.

Robert Kelman, of Evans & Peck, is understood to have visited Tasmania recently to prepare the report for Sodra, and has been investigating local support and opposition to the project.

This included consultations with the mill’s opponents, including the Wilderness Society and the Australian Conservation Foundation.

The discussions included what changes to the project might be required to address their concerns, such as ending plans for the mill to be fed predominantly by native forests timber in its first five years.

Mr Kelman would not comment last night, but did not deny his firm was preparing a report on the mill for Sodra.

“I’m not a spokesman for Sodra — at this stage that is all I can say,” he said.

Sodra told The Australian last year it might be interested in investing in the Gunns mill, which is proposed to be built on an industrial estate, but within 5km of at least nine Tamar Valley wineries.

Sodra chief executive Leif Broden said last night he was not in a position to comment on its discussions with Gunns, but that he would attempt to clarify Sodra’s position as soon as possible.

Gunns has insisted it wants to remain a majority partner in the project, but a partner is still expected to be required to commit $300 million to $500m.

Gunns would provide a slightly larger amount, and the remainder of the money would be obtained from a European-led banking syndicate thought to involve Macquarie Bank.

Gunns chairman John Gay said in April he expected to strike a deal with a joint venture partner by the end of June, and to begin construction on the mill within nine months.

Mr Gay could not be contacted last night. However, a Gunns spokesman repeated the intention to announce a joint venture deal by the end of the month.

The Wilderness Society confirmed it had been approached by a consultant working for Sodra, and said it had provided the consultants with scientific, environmental and economic information about the mill.

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And: The slumping economy has reduced sawlog prices in Europe and North America to the lowest levels in five years, reports the WRQ:
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PR_Global_Sawlogs_Prices_1Q_09.pdf