Gunns commits to plantation wood for Bell Bay pulp mill

GUNNS' proposed $2.5 billion Bell Bay pulp mill would begin operation with 100 per cent plantation timber, the company said today.

In a statement to the Australian Securities Exchange, Gunns chairman John Gay said the successful acquisition of access to the pulpwood resource of failed managed investment scheme company Great Southern had secured necessary plantation timber for the mill.

Mr Gay said discussions with equity partners and bankers for the controversial project were "continuing positively"

Gunns yesterday became the responsible entity for nine former Great Southern managed investment schemes, representing more than 40,000 hectares of plantaion pulpwood in the Green Triangle area of Victoria and South Australia.

"The Bell Bay mill has always been planned and designed as a plantation based mill," Mr Gay said.

"However, with Gunns' existing resources, it was not possible for Gunns to guarantee supply to the mill of 100 per cent plantation timber until five years after commencement of mill operations.

"Securing the Great Southern resource is an exciting new development for Gunns that allows us to accelerate our plantation strategy to supply the Bell Bay mill with 100 per cent plantation from mill start-up," Mr Gay said.

"Operation of the mill on 100 per cent plantation from commencement will ensure that this project is fully consistent with other modern bleached kraft pulp mills in South America that operate on 100 per cent plantation supply, and this decision should mitigate any concerns of stakeholders regarding fibre supply to the Bell Bay mill."

Mr Gay said the decision would also further enhance managed investment schemes and other private growers by providing certainty for their resource into the future.

He said Gunns looked forward to working with non-government organisations, the State Government and other stakeholders in relation to this new development for the Bell Bay project.

The Wilderness Society has decribed the Gunns’ announcement as a step in the right direction but warned that the destruction of Tasmania’s native forests was set to continue unless further steps were taken.

"For this announcement to be genuine Gunns needs to commit to the protection of native forests in Tasmania and renegotiate the pulp mill wood supply deal with Forestry Tasmania to exclude any native forest woodchips," a spokesman said.