16 replies to this topic

[Mystic]

Last Friday, our new environment minister, Peter Garret gave the green light to Gunn's to begin destroying the vegetation on the site for the tamar valley mill. He has refused to release any of the information he used in order to arrive at this decision. This is nothing unusual given the way the Lennon govt detroyed the RPDC process, refused to allow public meetings to be held before making decisions to approve, and generally suppressed any information possible during the decision making process.

The suppression of information raises some interesting questions about the direction of gocernmental control over the people, and demonstrates the urgent need for complete transparency in governmental procedures. Unless the public is fully informed it is unable to support or reject any decisions with clarity. Why were the documents suppressed, esepcially as the government is supposed to represent the people and reflect their needs and desires.

Support for the mill throughout Tasmania is split, and this issue can raise emotions to high levels. I ask those who decide to join in the debate here remember that we should attack the issues, not the people. Every person still has a right to their opinion, even if that opionion is wrong, or disagrees with our own view.

Further High Court action is due to begin today, though the demand by Gunn's that Lawyers For Forests pay a bond as deposit on legal fees in case of a Gunn's win may see the action stalled before it starts.

Personally, I think that this kind of development is going to have more of a long term negative impact on Tasmania that will far outweigh any apparanet benefit. The need for trees to feed the massive mill is going to result in more forests being cleared to make way for plantation timber, the resulting pollution that will be added to the Tamar region is great, and the potential for damage to the marine environment is huge.

Before I rant too much, let's see the thoughts of some of our other members on this issue.

[Shane V]

I have been doing a bit of reading about the pulp mill, when I have had a spare few minutes, since Anna posted this topic. Not just from the greenie point of view, I also went to Gunns site and downloaded some of the documentation they have released. It really does make fascinating reading.

One point that really stuck with me was that Gunns claims that they are not going to harvest any extra timber.

? There will be no extra harvesting from Tasmania?s forests as a result of the Pulp Mill
development. It will simply divert woodchips that are currently exported to local processing,
creating jobs and economic growth for Tasmania.
? The Pulp Mill will use between 3.2 million and four million tonnes of woodchips each year
from plantation and regrowth forests, mostly from the North East. No increase in forest
operations will be required to supply the mill.
From: Gunns Facts Update Sep 07

So if they are going to direct the timber from the woodchip mills to the pulp mill where are they going to get the timber from for the woodchip mills? Are they going to close them down? Are they going to harvest more timber for the woodchip mills? Where is the wood going to come from for them?

Chopping down trees increases the amount of CO2 which goes into the atmosphere. Trees are the lungs of the world and take up a lot of the greenhouse gases which us humans produce. How can having the Worlds Largest Pulp Mill help with reversing climate change? I don't see how it can. I actually see the reverse, I see it making the problem much worse.

With the "effluent" being pumped out of the mill into Bass Strait can they guarantee that fish and birds and other aquatic animals will not be harmed? They will be pumping small amounts of chemicals, dioxins and furans, which are harmful to the environment. These things will build up over time in the environment and start to kill off the aquatic animals and damage our clean,green name overseas.

What happens if there is an accident? Have they got plans to fix their mistakes or do they just pay the fine and move on till it happens again? Or will they actually do something to stop it happening again.

I can't understand why there has been so much secrecy on behalf of the governments over this. We, as the people of Tasmania, have the right to know what is going on. Isn't that why we elect governments? Aren't the ones elected suppose to listen to the ones who elected them? I have seen on other websites as much as 70% of people do not want this pulp mill.

I understand that building the pulp mill will create jobs but I also think those jobs can be created elsewhere in the forestry industry. Why can't we think of other ways which is more beneficial to the social environment as well as the native environment?

I am not for a pulp mill under any circumstances. There are other ways of making money without destroying the environment.

[Son of a Beach]

Sure is a lot of fierce emotional debate on this issue. Personally I'm now against it completely, largely due to the complete lack of due process, and also due to the possible (and probable) environmental damage.

The political games around all this are astounding, both in government and out of it. This article on "A Christian Response to the Pulp Mill" is interesting (if you're not interested in the religious side, skip the first couple of pages). It is very well researched and brings to light a lot of frightening facts that I was not previously aware of. Gunns tried VERY hard to have this article suppressed (intimidation, etc) and failed. Eventually they asked writer to meet with somebody high up at Gunns so that he could be "corrected". So they did meet and discussed the article. Turns out Gunns couldn't deny anything of significance in the article, and completely validated it all! The article's conclusion is that a christian response (NB: one possible response, not THE response) would be to reject the mill on moral grounds due to the lack of transparency, and the APPARENT (although not necessarily proven) dishonesty (of Gunns and of the Government).

If you've not spent much time in the Tamar Valley, or even if you have, and you've never noticed the horrendous pollution already there, then check out this photo I took of the pollution over the valley last winter. Note, this is NOT clould or fog... no cloud in the sky anywhere else, and besides, it's the wrong colour.

[Mystic]

With the recent revelations that the public look like footing the bill for the mills effluent pipeline, at a cost of around 60 million, and the fact that of those promised jobs (one of the major reasons anyone even considered supporting this) half the construction phase jobs are now to be slashed, I wonder if there are any supporters for this project remaining?

[CoastalCanuck]

Interesting. In the last few days I've been looking up and learning about the forest industry in Tasmania, much of the latest technology has been developed and comes from here. Modern pulp mills can be made to operate quite clean. We have two nearby, and the effluent is quite minimal and discharged into a large (salmon bearing) river after being treated through settling ponds and filters. The air pollution is far lees than the past with the use of scrubbers and burn offs.

Pulp isn't my specific area of expertise, but I do know that your eucalypt is a nice white fiber with little need for bleaching. Radiata pine is so fast growing the wood isn't very dense and easy to break down. One or both are what would be grown on plantations. The technology to build a pulp mill with nearly 0 toxic wastes does exist. There is a mill built in the early 90s (actually I lived nearby while it was being built) just north of me.
It appears that your gov't and I'm certain Gunns are aware of this:
http://www.tfic.com.au/domino/tfic/tficweb...%20Pulp%20Mills

http://www.tembec.com/public/Environnement...que-Canada.html

It took nearly 10 years and three different owners to make that mill work as designed, but I was there two years ago and spoke with a few friends 'in the know' and apparently its clean. The 'smoke you see from the stacks, is steam and scrubbed wood smoke, (low particulate).

I guess its up to the citizens and residents to demand that the mill set a new standard for the world. It can be done.

[Mystic]

Not surprising that after Gunns forced the hand of the govt by stating they needed approvals to be in place for a sept 1 2007 construction start date, we find that 12 months further down the track nothing has happened . Also not surprising to see that the delays are due to Gunns own problems and lack of capacity.

Whilst there are still problems they must overcome in regard to federal approvals, their biggest issue right now is capital funding. The company shares have been in a trading halt for almost 2 weeks, after plunging to a level that makes them very ripe for a takeover.

One potential method of raising the required capital has been to propose going into partnership with the Sweedish company Skoda to see if they can build the mill with extra resources. So much for this project value adding for Tasmania. If the partnership goes ahead we instantly lose a substantial amount of the potential profits and one of the major reasons suggested as to why this project should be allowed.

It will be interesting to see what happens over the next few months, but it is becoming more and more likely this project will never get off the ground. We may even see the end of Gunns itself and it will be curious to watch their share prices over the coming weeks.

[Mystic]

it almost seems certain now that this pulp mill will never be built. Or, if it is, the ownership of it will reside outside of Australia, defeating any of the benefits that were supposed to flow on for Tasmania. Under the current global financial situation, credit is almost impossible to come by, especially at the scale required by Gunns for a project of this size.

Recently Paperlinx announced that they were selling off both their Wesley vale pulp mill, and their Burnie paper mill. Again, given the financial crises facing the world, both properties are anticipated to be sold at around half their nett value, if they can be sold at all. Surely it would make better business sense for Gunns to purchase, at the very least, the pulp operations, and then expand the existing structure to suit their requirements. It would certainly work out far less expensive than building from scratch, and there would be virtually no public opposition to the plan.

At the prices expected to be realised for both operations, however, Gunns would be able to purchase the pair at less than the cost of developing the Bell Bay site. They talk about value adding to the woodchips that would have been exported for pulping, thus increasi9ng profits for Tasmania. With both a pulp and paper mill, the value adding would increase dramatically as they would then have the capacity to not only produce the pulp, but the final paper products as well, developing export markets for finished products further than already exist.

To continue with the plan for development of Bell Bay would be nothing more than an act of arrogance on the part of Gunns directors, most especially now that a definite real alternative is being presented to them in the form of existing plant and structures.

Like I said at the beginning though, it is highly unlikely they will generate the finance required to go ahead with the Bell bay site. Even if, by some miracle they did succeed, I doubt they would be able to generate enough profit in time to meet the interest payments that would be demanded and the whole project would fail anyway.

[Mystic]

Our politicians are still suggesting the pulp mill will be the only way to save the ailing forestry industry. However, is there really any chance of this going ahead now?

Today Gunns shares have dropped as low as 36.5c per share, closing at 37c per share. In late October, last year, they were trading at $1.30 per share. The current price is less than 30% of the previous company value. Gunns require around 2 billion $$$$ to develop this mill, and one must ask who in their right mind would invest that kind of money in a company that appears to be going totally down the tubes?

Recently they announced they were selling off 28,000 hectares of forest holdings, restructured the company, changed directors, and none of this has resulted in any confidence through investors for their shares.

If this company can now find the required finance to develop this pulp mill I would be amazed. Right now, one would think that they are ripe for a takeover and that any new buyer would be likely to asset strip for a profit, dissolving the company in the process.

[Seachange]

Is anyone able to give an update on proposed pulping situation?

We've been trying to get uptodate info on the net, but there doesn't seem to be anything recent.

Thanks!

[Shane V]

I can't recall hearing much abut it of late, so can't really update you on anything Seachange, sorry

[Mystic]

They are still trying to find finance, though it will not be easy with the company share price still very low. When the previous chairman was forced to resign most pundits suggested the project would die. I think Gunns are holding onto a slim hope it will still go ahead. Though with the kind of cash they need an investor could probably buy the entire company for less outlay.

[Seachange]

Sounds like the project is doomed for now then...which is probably a good thing too. Thanks!

[Mystic]

Gunns release a report to the ASX today stating they have sold off their wine and winery interests and revised their full year profit forecasts. After reporting in June they expected a profit for this year of between 50-60 million the real figure is now expected to be around 28 million, around 50% of expectations. The report contained no mention of pulp proposals, though with profits in steep decline over the past couple of years and major asset selloffs for the company during this past year, it is very difficult to image them having the capacity to raise the kind of cash they need in the current global economic situation.

[Seachange]

Wow that's a huge decrease in profits. You'd have to think the project is well and truly doomed for now, unless some company comes along and buys them out and continues with the plan.

Thanks Mystic!

[Mystic]

I can't believe that this issue is still dragging on after all this time. This thread was started over 3 years ago, and is still haunting us all.Is there an end in sight though?

Recent events in this saga...

• Late last month Gunns announced a nett loss for the year of $355 million
• The Gunns share price dropped to an all time low of 20.5 cents, and this was before the release of the financial statement
• On August 5 Gunns shares went into a trading halt at the request of Gunns. They claimed it was pending outcomes of a compensation deal on their exit from native forest logging, among other reasons that seem to have changed as time drags on. Their shareholders are still in limbo with what must be the longest trading halt on record.
• Gunns were offered $23 million compensation, but were hoping for over $100 million compo. They have today announced the offer has been rejected.
• The mill construction permits lapsed on August 31. The courts will now have to decide whether "substantial commencement" of the project has been completed. If not, they will not be allowed to continue construction work, though they have done very little anyway.

Based on the share price, Gunns has a market capitalisation of only $175 million and debts of around $600 million+, much of which has large interest payments that fall due later this year. They claim they are close to arranging finance for the $2.5 BILLION mill, but with figures like those one really has to wonder who in their right mind would lend that kind of cash to a company that appears to be flailing and going down for the third time.

Not surprised at all that Gunns rejected the compensation offer, especially given that they owe Forestry Tasmania around $25 million, so the compo would not have even covered that single debt. They have two options left with this now... to sell the contracts on the open market... unlikely given that these contracts are for logging in old growth forests and the market for non FSC timber is becoming smaller and smaller each day. Or they can try to wrangle a higher offer from the State Govt., which is also highly unlikely given that Tasmania is in a financial mess and the Federal Govt has stipulated that no money is to be paid to Gunns out of the recent package of financial aid handed out by them.

The suspension of share trading over a month ago shows how desperate this company is. There has been no report to the ASX in over a week to exlain why the shares are still in trading limbo, even though the supposed reason for the halt has now been finalised. I think Gunns know that continued trading will simply see the share value drop even further, and a number of large holders are queuing up to get out. When shares resume trading, the market will be flooded with large volumes of shares on sale at whatever the market decides them to be worth.

As it currently stands Gunns could not cover their debts even when you add up the value of assets alongside market capitalisation. In short, they are broke, and losing money hand over fist with each day.Perhaps it is time to call the administrators in and wind the company up

Gunns claim they have met the "substantial commencement" clause of their permits, yet nobody is really sure exactly how to define that term, and earthworks contracts were only finalised hours before the permits expired. A court ruling is going to be required to determine an exact definition of the term, and whether or not Gunns have actually satisfied the requirement. Technically speaking, they should not be allowed to perform any further work on the site until this matter is resolved, with some arguing, (perhaps rightly so) that any work carried out until a ruling has been made is illegal.

Gunns refuse to lay down and die, despite ever indicator pointing to the fact that they are dead in the water.

The saga continues....

[dave]

i'm praying the mob simply grows a brain and knicks off

[Mystic]

Gunns shares were re-listed on the ASX as of last Monday. they closed at 15.5 cents at the end of the week, wiping another 25% off the market capitalisation of the company, which is now only $131 million. Over 115 million shares were traded during the week, and for those not familiar with the stock market, that is HUGE. Gunns shares are getting dumped, I just hope the entire business is dumped as quickly. If they cannot bounce back next week their future is very bleak indeed.