Clean-up and maintenance bill climbing for abandoned BC pulpmill

Vancouver, B.C. - The clean-up and maintenance costs for the Port Alice, B.C., sulphite pulpmill, abandoned by its company owners and operators, could reach $17 million by spring 2021, according to the September report tendered by Vancouver-based PriceWaterhouse - Cooper (PwC) to the bankruptcy court.

PwC received BC Supreme Court approval for borrowing a further $9 million after $8 million was granted when it took over the management of the 40- acre site located at the northern end of Vancouver Island in spring 2020. The mill has been operating for approximately 100 years with numerous owners and upgrades but production stopped in 2015. After the last owners Neucel Specialty Cellulose Ltd. left the mill, PwC was appointed receiver and told the court, the extra borrowed funds will carry it through into first quarter 2021.

The bankruptcy writ by the B.C. government has been filed against Neucel, the Bank of China (Canada), Fulida (Canada) Holdings Ltd., B.C. Workers’ Compensation Board, CIMS Limited Partnership, HSBC Bank Canada and CBSC Capital.

Neucel was incorporated in 2005 in B.C. by the Ontario Teachers’ Pension Fund and Wellspring of Chicago and Neucel purchased and ran the mill until March 2009 when it was shut-down to conserve cash during a depressed market, according to court documents. Fulida Canada Holdings Ltd., a member of the Fulida Group based in China, purchased Neucel in 2011 and operated the mill until 2015, producing specialty cellulose products used to produce rayon filament, pharmaceuticals, food products, and cleaning detergents.

A six-month curtailment in 2015 stretched into 2019. “The company (Neucel) instructed the remaining care and maintenance crew to disconnect the power supply and vacate the mill site,” court record state. Before leaving the site, the crew notified the B.C. government they had been instructed to leave and that a number of hazardous materials on site, if left unattended, could result in environmental damage to the site and Neroutsos Inlet.

The province then undertook an assessment, hired a hazardous material company to address immediate concerns and monitor the site. The province attempted to bill the company but got no response and filed against the company in bankruptcy court in April 2020 with receiver PwC appointed. To date, the B.C. government is owed $13.5 million in various fines, lease fees, and permits plus other associated costs.

PwC in its May report on the site outlined secured creditors as the province owed $13.5 million plus interest, followed by Neucel’s parent company Fulida Holdings Canada, a member of the Chinese giant textile firm Fulida Group, which claims $232 million. The last secured creditor is Unifor Local 514, which is attempting to collect $21 million in owed wages to former mill employees.

Port Alice mill includes: its main production equipment (small and large wood plants, chip silos, digesters, screen rooms, and associated equipment); ancillary production equipment (bleach plant, acid plant, evaporators, etc.); marine infrastructure (rail offload, log sorts, wharf and related equipment); effluent treatment system with approximately 177 million litres of effluent needing treatment and discharge; general mill systems (boilers, turbine power generators, water house storage, etc.) all in various states of disrepair, road and rail infrastructure throughout the site. Pump houses and electrical and water infrastructure remain intact. A ninehole golf course exists on company land and is operated by a non-profit society. The site also has several landfills, some permitted and some without.

Reports on the mill can be found on PwC’s Canada website along with requests for proposal when the receiver has looked for proponents to carry out maintenance and clean-up work.

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