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St. Marys secures $8.8 million loan for restart plus biomass co-gen deal

SAULT STE. MARIE, ONT. — With the assistance of a loan from the provincial government and promises of an appropriate wood supply, St. Marys Paper Corp. in Sault Ste. Marie, Ont., is gearing up to res…

SAULT STE. MARIE, ONT. — With the assistance of a loan from the provincial government and promises of an appropriate wood supply, St. Marys Paper Corp. in Sault Ste. Marie, Ont., is gearing up to restart by early December. The groundwood mill has been closed since March.

“This is important news for St. Marys, and for the local economy,” said Dennis Bunnell, chairman and CEO of St. Marys.

“Our market studies confirmed that St. Marys Paper should continue producing supercalendered paper as its base product,” Bunnell noted. “As a result of the provincial support we can now implement our plans to transform the business by joining the expanding forest bio-economy business sector.”

The transformation in underway. St. Marys Paper has signed a 10-year, 30-megawatt power-purchase agreement with the Ontario Power Authority for the electricity produced by a biomass- fueled co-generation plant to be built adjacent to the St. Marys Paper mill in Sault Ste. Marie. The plant will be operated by St. Marys Renewable Energy Corporation.

The company still needs to finalize funding for the $175-million project. The co-generation plant will replace St. Marys’ aging boilers and allow wood waste, in this case, forest industry residuals, to be used as fuel in the new a bubbling fluidized bed boiler.

The construction phase is expected to begin in 2011 and generate 400 jobs. About 30 people will work at the co-gen plant once it is operational, and another 125 will be employed providing biomass fuel and logistics.

St. Marys has negotiated a commitment of up to 400,000 tonnes of biomass annually from the Algoma and Northshore Crown Forests for the life of the project. The company also will engage in nano-technology product development partnerships and studies with the University of Toronto, and other bioeconomy projects with private sector partners and the Sault Ste. Marie Innovation Center.