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The Newfoundland and Labrador government and Newfoundland and Labrador Hydro have extended a power purchasing agreement with Corner Brook Pulp and Paper as they wait for Kruger’s future plans to be unveiled.
A news release issued by Kruger on Thursday said the deal will last an additional 12 months to provide “stability while the project is further assessed.” The Department of Forestry, Agriculture and Lands said Thursday the deal is now in place until the end of June 2027, according to a letter of intent.
“It gives everybody, especially Corner Brook Pulp and Paper, time to do due diligence, you know, on their diversification plan,” Forestry Minister Pleaman Forsey told CBC News Friday.
The Corner Brook Pulp and Paper Mill has been operating in the community since 1925. The city was essentially built around the mill, which employs around 400 people.
A news release from the Department of Forestry, Agriculture and Lands said the mill will maintain its current workforce — but just one paper machine will be in operation.
That was the case in February when the mill reopened following a significant shutdown that started last fall.
Kruger, which has owned the mill for over four decades, is working to produce a $700-million diversification strategy to modernize operations, move away from the struggling newsprint industry and become a long-term electricity provider to Newfoundland and Labrador’s power grid.
The agreement came into effect in February 2024. The Crown corporation purchases power at a significantly higher cost than alternative sources, as the mill continues to pay on a $110 million government loan from 2014.
Forestry Minister Pleaman Forsey said the deal aims to give Corner Brook Pulp and Paper more time to develop its diversification plans. (Henrike Wilhelm/CBC)
Forsey said the deal will include the purchase of around 280,000 megawatts of power at a price of around 18 cents per kilowatt hour.
In an emailed statement to CBC News , Kruger said it wasn’t providing interviews, saying plans are still being shared internally and could be shared publicly in the coming weeks.
Forsey said the province is eager to see the full plan, as Corner Brook Pulp and Paper remains a key player in the forestry sector.
“They continue to work well with all the forest sector, and there’s a lot of employment. So government is committed to all the workers within the province, and to make sure the forest sector is certainly maintained,” he said.
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