Gippsland Paper Mill expansion

The largest paper mill in Australia is based in Gippsland and is planning to expand – with the government’s full blessing and financial assistance. It will need an additional 200,000 m3 of eucalypt pulpwood. But where will it come from?

PaperlinX, maker of Reflex copy paper, was formally known as APM, Amcor and is now associated with Australian Paper. It is also known as ‘Maryvale’. Whatever name, it has been operating since the 30s, polluting the air with stench, the Latrobe River and Gippsland Lakes with toxic effluent and woodchipping huge areas of the Central Highlands ash forests for paper pulp.

As much as we wish they’d shut down and go away the reality is that the world can’t function without paper and besides, this industry is a huge donor to political parties (so the government owes them).

Less toxic outputs
However, a potentially positive part of the expansion plan is that the new mill will have cleaner processing technology and carry out some recycling of its cocktail of chemicals. It also plans to do away with importing about 80,000 tonnes of Indonesian pulp a year (of unknown origins).

Plantation plans
With this expansion plan also comes the promise that the mill wants to move into 100% plantation grown wood “as soon as practicable”. However, “asap” will be 12-14 years away. So how possible is this? The mill would need an extra 200,000 m3/pa of both pine and eucalypt woodchips in addition to what it currently uses.

PaperlinX would have to rely on the establishment of another 18,000 ha of plantations near the mill, which would take until about 2017-19 to be mature enough to log. Macqaurie Bank will raise the money needed by offering investment shares in the plantations. New tax laws make these investments 100% tax-deductible.

Hancocks own about 28,000 hectares of mature plantations and native forests within an economic distance of the mill. But between 9,000 and 12,000 ha might be needed for enlarging and linking conservation areas of a new park that Steve Bracks promised before the last election. If these areas are protected, it would leave 16-19,000 ha. That would go a long way to meeting the hardwood needs of PaperlinX. No more pine would need to be planted to feed the expansion.

But meanwhile …
There has been a promise that not one extra tree will have to be felled (on top of what is being felled now). It’s expected that export licences (Midways at Geelong maybe?) will not be renewed after they expire in 2008. Then the Central Gippsland forests currently going to paper factories in Asia will instead go to the paper factory in the Latrobe Valley.

DSE believe there is enough woodchip “waste” from logging for sawn timber (we are told all logging is “sawlog-driven”) to keep providing the mill with residual logs. But this is assuming that the demand for sawlogs will remain constant and local sawmills don’t go under. But sawmills are going out of business at a rapid rate.

Clearance sale prices
At present, and thanks to the deals done with governments back in the 1960s and another slippery deal done with Kennett in 1996, PaperlinX gets its native forest logs at the clearance sale price of $11 a tonne up until 2030. It was actually set in law under an Act of Parliament. But logs from Hancocks plantations would have to sell for between $25 and $30 a tonne. If log prices from public forests had been set at a realistic commercial price years ago, the incentive to move into plantations would have come along much sooner than now.

PaperlinX claims that its economic zone is within 150 kms from the mill. This would exclude East Gippsland, but include parts of Tambo (Bairnsdale region) and of course the Central Highlands. How this expansion will affect our native forest landscape in the ever-changing industry landscape, is unknown, but we’ll be keeping our binoculars keenly focused on it.

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