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Work on AU$2B SA mill by mid-2011 or just Pulp fiction?

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Issue date: 
July 20th, 2010
Publisher Name: 
International Forestindustries
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The AU$2 billion Penola Pulp Mill project in South Australia, shelved during the global recession, has been revitalized since The Commonwealth Bank recently came on board to help raise capital costs for the 750,000 tonnes/year mill, The Advertiser reported on 5 July.

The bank is also helping Greg Boulton, chairman of the company behind the project, and CEO Don Matthews to raise AU$20 million to finalize the design and lock down contracts, the paper reports.

The company hopes to raise the first funds by September, and the capital cost of the project by March through June 2011. The pulp mill, previously estimated to cost AU$1.5 billion, was effectively put on hold during the financial crisis when ANZ Bank pulled out of a financing deal.

Construction of the 260-employee mill 7 km outside Penola could start as early as mid-2011, said high-profile Adelaide businessman Boulton. There is ample plantation-grown hardwood in Australia and the mill is guaranteed a water allocation, said Boulton. Also it has federal environmental approvals and has been assessed by the state Environment Protection Authority.

Source: http://www.forestweb.com/

Penola Pulp Mill Overview


The Penola Pulp Mill was approved in 2007 by both the Federal and South Australian Governments. The pulp mill matches the abundant Australian resource (plantation eucalypt) with the growing international market for high yield pulp.

The Green Triangle Region contains a wood resource that represents some 17% of Australian plantations. The Penola Pulp Mill is a value adding facility in the Region that complements the existing resources and infrastructure in a world competitive economic setting.

The modern mechanical pulp mill will be located on a green-field site eight kilometres south of Penola township and 14 km north of Kalangadoo in south east South Australiia.

The Penola Pulp Mill is the most environmentally sustainable development in the Pulp and Paper industry worldwide. It will be the world’s largest bleached chemi-thermo mechanical (BCTMP) pulp mill. The mill will establish the most economically efficient use of water in the State of South Australia, with zero waste water leaving the site.

Capacity of the pulp mill

The Penola Pulp Mill is designed to produce 750,000 air dried tonnes per annum of BCTMP pulp to supply predominantly export markets.

  • Key competitive advantages for the Penola Pulp Mill
  • Leading edge design
  • Economies of scale
  • Low manufacturing costs
  • Local woodchip supply
  • Fast growing eucalypt with superior characteristics
  • Proximity to major Asian Markets
  • Integrated logistics


  • The pulp mill location and design ensures:
  • the most efficient industrial water use in the world: every drop of waste water is treated and recycled in a Zero Liquid Discharge water recycling plant
  • local plantation woodchips are used
  • mechanical ‘grinding’ instead of chemicals to break down woodchips
  • no chlorine bleaching


Extpub | by Dr. Radut