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Media reports re Gunns' pulp mill and related issues

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For earlier media stories by month and year on Gunns' planned pulp mill and related issues, go to the links at the bottom of the page.

For media releases from TAP Into A Better Tasmania see media releases.  

Media reports for April to August 2010

30 August 2010 The Independent candidate for Denison is demanding an incoming federal government withdraw Commonwealth approvals for the proposed Gunns pulp mill in northern Tasmania. Andrew Wilkie claimed victory in the Hobart-based seat at the weekend but has not yet made up his mind about which party to support in a minority government. Mr Wilkie is meeting Opposition Leader Tony Abbott and Prime Minister Julia Gillard this afternoon and has released a list of issues important for his decision. Mr Wilkie has previously said he would support a mill that was genuinely pollution-free and water and energy efficient. ABC

28 August 2010 Shifting a pulp mill proposed for Bell Bay, to a site at Hampshire - six years after both sites were shortlisted - would require a new feasibility study, according to a Burnie business leader who has rolled out the welcome mat to proponent Gunns Ltd. Burnie Chamber of Commerce and Industry president Andrew Barry also said much of the plantation timber in the North-West was now closer to harvesting, making any switch of site more viable. The timber giant would not comment about Hampshire yesterday, saying discussions involving both sides of the forestry debate was ongoing. However, it is understood Gunns has so far invested up to $200 million in progressing its controversial Tamar Valley pulp mill proposal, which lacks finance and the support of conservationists at the roundtable. Just how much of the $200 million would be written off following a Hampshire switch is unclear given some of the preliminary work would not require duplication. "It's always made sense to be at Hampshire from a political perspective but the business case might not have been as strong five years ago," Mr Barry said. "Unless the company undertakes full assessment again on both sites on prevailing market conditions and taking all the new data into account given the time lapse, we are not going to know are we? Advocate

27 August 2010 It appears unlikely Gunns would be willing to go back to the drawing board on its pulp mill proposal even if that's what it would take to get conservation groups to back a mill in the Tamar Valley. A draft proposal has circulated among conservation and industry groups involved in forestry peace talks includes in- principle support for a Tasmanian pulp mill. However, the current proposal in the Tamar Valley is still a sticking point, with Gunns moving forward with it and environmental groups vowing never to support it as it stands. When asked if it would consider a new proposal on the same site, Gunns had no comment yesterday. But previously the company has said it intends to go ahead with the mill now that it has all the approvals. Examiner

26 August 2010 Tasmanian Greens leader Nick McKim says it is unlikely Gunns' planned pulp mill will ever be built in the Tamar Valley. Leaked documents have revealed a possible deal between conservation groups and the forestry industry on a highly controversial pulp mill proposed in the north of Tasmania. Conservationists and representatives from the timber industry have been in talks for months, trying to find a common vision for the future of forestry in the state. The documents, obtained by the ABC, outline the broad terms for a draft agreement including a moratorium on the logging of high conservation value forests within 30 days. In exchange, conservation groups would need to drop their opposition to a plantation-based timber processing facility. But Mr McKim says the Greens will not support Gunn's current pulp mill proposal. Business Yahoo

25 August 2010 Gunns has said its Bell Bay pulp mill project is still "being held in a ready status" over a year after saying it had secured a partner for the project. The company made the announcement in its 2009/10 financial results, which showed a 49.3% drop in net profit to $28.5m for the year. Gunns has obtained all but one of the environmental approvals to build the Bell Bay mill and been given the go-ahead to begin construction by the federal government, but has yet to secure a financial backer. The company had been expected to announce a financial partner for the mill over a year ago, but has struggled against the tough economic backdrop. The company announced a financial restructure of the project in February, as it posted a staggering 98.7% fall in profits in its half-year results. Proprint.com

25 August 2010 Premier David Bartlett yesterday denied the compulsory acquisition of land for the Dilston bypass was a ruse to enable Gunns access to a route for its pulp mill water supply pipeline. "The Dilston bypass corridor was acquired solely for road purposes," Mr Bartlett said. Examiner

24 August 2010 The Tasmanian Greens today continued to hold Premier David Bartlett to account over the decision to compulsorily acquire private land for a four-lane highway along the Dilston Bypass that would obviously never be built, and to then gift the use of that land to Gunns for the construction of a pipeline that is essential for Gunns’ contentious pulp mill proposal. Greens Forests spokesperson and Member for Bass, Kim Booth MP, said the landowners originally refused to sell their land to Gunns for the pipeline so Bartlett Labor has stepped in and used the possible future construction of a completely unnecessary four-lane Dilston Bypass as a Trojan Horse to acquire private land on behalf of a private company. “It is patently obvious that the possibility of a four-lane Dilston Bypass was cynically used by David Bartlett and Labor as a Trojan Horse to allow the seizure of private land on behalf of Gunns Limited,” said Mr Booth. “The seizure of private property on behalf of a private developer is unconscionable and a chilling warning to all Tasmanians that if Bartlett Labor or Gunns Limited want your land then they will take it from you.” Greens

19 August 2010 Gunns is pinning hopes for its $2.2 billion pulp mill in the Tamar Valley in Tasmania on an improving global pulp outlook, as a potential investment decision appears to inch closer. 'Three interested parties have progressed from the initial bid process and are undertaking detailed due diligence in relation to the investment,' the company said. But it believes demand in the Asia-Pacific region for pulp will soon outstrip supply, leaving the mill in a strong competitive position. Gunns has also outlined plans to build a 'social licence' for the mill, a key requirement if the pulp product is to gain Forest Stewardship Council certification. Business Day

17 August 2010 Gunns said its 2010 full-year net profit was estimated at $28 million compared with $56.2 million achieved in the previous financial year. It flagged an impairment charge of $98.1 million, which mostly related to the write-down of non-core assets and businesses that were prepared for sale or closure, and the carrying value of other assets. Farm Online

6 August 2010 Gunns has confirmed it has negotiated with the Government to use an easement along the Dilston bypass for the water pipeline. Land owner Gerald Archer says he has had no contact with Gunns or the State Government about the pipeline for two and a half years. An anti-pulp mill group wants the Tasmanian Premier to stop a water pipeline for the Gunns pulp mill. Vanessa Bleyer from the anti-pulp mill group, Friends of the Tamar Valley says the Government and Gunns are taking away private landowners' rights. "It's okay for the private land to be compulsorily acquired for a road because it's going to serve a benefit to the community but how is it okay for someone's private land to be taken away for a private purpose for Gunns' pipeline?" she asked. ABC

5 August 2010 Gunns has been given permission to build its controversial pulp mill pipeline on land compulsorily acquired for the Dilston bypass on the East Tamar. Farmer Gerald Archer had refused to negotiate with Gunns over a route through his land for the $40 million water pipeline, without which the $2.5 billion mill could not go ahead. However, DIER compulsorily acquired a 70m-wide corridor comprising a total of 11.96ha for the bypass in November 2009. DIER spokesman Simon Hiscock said at the time the move was "entirely unrelated to the construction of the Gunns pipeline which is a separate matter for negotiation by Gunns". Greens pulp mill spokesman Kim Booth said allowing the pipeline was an unbelievable act of betrayal of farming families by the State Government. "There has been a manipulation of the Land Acquisition Act where they bought an easement about twice as wide as they really needed on the chance that they might one day need a four-lane highway," he said. Mercury

30 July 2010 Greens: Tourism and pulp mill don’t mix. Greens Senate candidate, Peter Whish-Wilson, is asking why the federal government is happy to give $100,000 for wine tourism in the Tamar Valley when continuing to support an unpopular, risky and socially divisive pulp mill proposal that threatens to drive tourists elsewhere. The grant, announced by Federal Minister for Tourism, Martin Ferguson, in Launceston today is designed to boost the growing wine tourism industry in the state’s North East. “The TQUAL Grant stresses the importance of marketing the Tamar Valley’s “Visual identify”. “What sort of visual identity are we going to have in the Tamar Valley if the Gunns Ltd proposal to build one of the world’s biggest Pulp Mills, with its smokestacks, fugitive emissions and thousands of daily log truck movements becomes a reality?" Tasmanian Times

26 July 2010 Sodra, the long-touted possible joint venture partner for Gunns' Bell Bay pulp mill, is still keen on sealing a deal with the Tasmanian timber company, squashing rumours that it has backed away from the troubled company. Gunns needs an equity injection from a partner to build its controversial $2.2 billion mill, which has divided communities, enraged green groups and been a political minefield. Stock and Land

15 July 2010 Prime Minister Julia Gillard is expected to fly into northern Tasmania tomorrow ahead of an expected announcement on Saturday of a late August election. It is not yet certain whether Ms Gillard will use her rushed visit to the marginal electorates of Bass and Braddon to announce a breakthrough in the decades-old and divisive Tasmanian forest conflict. It is understood the industry is keen to get concessions from environmentalists to allow the $2.2 billion Gunns pulp mill in the Tamar Valley to proceed, but using only plantation timber. Mercury

14 July 2010 Gunns says it wants to heal a rift with the community. There has been a hostile reception for Gunns at a meeting called to discuss the company's compliance with forestry certification standards. The meeting was organised by the auditors of environmental group Rainforest Alliance to assess how Gunns meets international Forest Stewardship Certification. Gunns' representative Frances Duffy told the meeting the company wanted to win certification because international customers demanded it. Also, the company wanted to mend a rift with the community. Several members of the public told Ms Duffy they felt disenfranchised by the pulp mill approval process. The Greens' Kim Booth said the mill would not get community support unless a new approval process was adopted. Ms Duffy said that was not going to happen but Gunns would continue consultations. ABC

5 July 2010 An impromptu meeting between Premier Bartlett and members of TAP Into A Better Tasmania took place on July 5 at the Queen Victora Museum, Launceston. The Premier's key question was "Is there any, can I ask you a question, is there any circumstances under which a pulp mill, you know, if you think about it, if it was totally, um, chlorine free, if it was closed loop, if it was in another place, I’m just saying, I’m trying to ask you, is there a scenario and it was obviously all plantation fed and accredited by FSC, is there a circumstance under which you would say No, that’s a reasonable project? Would you object or not?". Read the full transcript of the exchange at Tasmanian Times.com

29 June 2010 The Tasmanian Government says the Gunns proposal for the Tamar Valley pulp mill is in better shape than it has been for a long time. The Treasurer Michael Aird has told a budget estimates committee he plans to meet the new chief executive of Gunns Greg L'Estrange. Mr Aird says Tasmania has the forestry resources to supply the proposed $2.2 billion mill. "We have considerable private sector plantation resources in this state and it is there ready to support a pulp mill," he said. Yahoo finance

11 June 2010 Gunns has revealed it has three potential partners for Southern Star Corporation, the company established to build and operate the proposed Tamar Valley pulp mill. Gunns holds the majority share in Southern Star Corporation, but is talking to three potential equity partners about what they can provide for the $2.2 billion pulp mill venture. Yahoo finance

10 June 2010 A move to sell off more assets (land and trees) owned by plantation company Great Southern has created uncertainty for Gunns. Gunns manages blue gum plantations on these properties on behalf of Great Southern investors but previously told the stock exchange that it plans to use the timber from the plantations to ensure its Tamar Valley pulp mill is 100 per cent plantation based. Yahoo finance

9 June 2010 The chief executive of Gunns (Mr L'Estrange) has foreshadowed a new direction for the company after the resignation of its high-profile chairman (John Gay). "I think the company is moving more away from conflict as a means of resolving issues to, how do we actually sit down and work for resolution," he said. Yahoo finance

8 June 2010 The Tasmanian Greens today called on Premier David Bartlett to rule out any further Tasmanian Government subsidisation of Gunns’ proposed pulp mill. “Premier David Bartlett today flunked the opportunity to be a statesman and issue a death certificate for the mill, instead reverting to his old ways and attempting to resuscitate the corpse of the pulp mill,” said Mr Booth. “The economy of the Tamar Valley has stalled under the cloud of this toxic mill proposal.” “The public have rejected it, the market has rejected it, Gunns’ shareholders have rejected it, and it now seems that the only people on the planet who want a pulp mill in the Tamar Valley are David Bartlett and Labor.” Tasmanian Times

7 June 2010 The law firm preparing a class action against Gunns says it has been contacted by "significantly more than 100 shareholders" who may be eligible. Lawyer Ben Slade says the firm is now waiting on a final decision from litigation fund IMF Australia on whether it will fund the case. Yahoo finance

3 June 2010 The Commonwealth Bank of Australia has announced it is no longer a substantial shareholder of Tasmanian timber company Gunns. The bank says it has now sold 11 million Gunns' shares. Shadforth's financial analyst Matthew Torenius says many shareholders have been unhappy with Gunns' profit drop. ABC

2 June 2010 Speculation of a Gunns Ltd takeover continued yesterday despite a number of companies declaring their role in last week's mass trading. Around 35per cent of the company has changed hands in the last week. Examiner

31 May 2010 Shares in Gunns have risen sharply in the wake of the departure of chairman John Gay and amid speculation the company could become a takeover target. The Australian Financial Review on Monday suggested that Chinese firm Asia Pacific Resources International Ltd could be interested in securing Gunns' timber supply. Other companies that could be interested included Nine Dragons, Asia Pulp & Paper, Hunan Tiger Paper and Chenming. Morningstar head of equities research Peter Warnes said that when Gunns shares were under 30 cents, they were "wildly undervalued" given Gunns' forestry assets. "The problems with the management or board have disappeared with John Gay's resignation or early retirement," Mr Warnes said. Business Spectator

28 May 2010 Gunns chairman John Gay finally capitulated to shareholders, quitting all posts and raising deep doubts that his company's controversial Tasmanian pulp mill will be built. Mr Gay failed in his attempt to fend off investor pressure by shifting into a Gunns subsidiary, Southern Star, to run the mill project. He resigned from it, as well as the main Gunns board, which he had previously promised to leave by November. Mr Gay had been resisting pressure for months but the final act came this week when major institutional investors sold off large parcels of Gunns shares and its price spiralled down from 38¢ to a low of 26¢. Business Day

25 May 2010 Gunns share price has plunged about 25 per cent today. After closing at 35 cents a share yesterday, Gunns shares closed at just 26.5 cents on a volume of more than 41.2 million shares - down 8.5 cents a share after opening the day at 34 cents. Today's fall follows yesterday's announcement that the timber company had sold its retail hardware stores for $40 million to John Danks and Son. Examiner

24 May 2010 Woolworths has added more stores to its hardware chain by agreeing to pay $40 million to acquire Gunns’ five stores in Tasmania. It will also acquire the Becks Timber & Hardware business. Business Day

19 May 2010 Gunns shares dived to their lowest in a decade after the board of IMF (Australia) Ltd announced it would fund a class action against the company. Gunns shares were the worst performing on the benchmark ASX 200 share index for the day, losing 4 cents or 9 per cent, to close at 40.5 cents. The company's shares haven't been this low since July 2000. IMF said in a statement to the stock exchange that it proposed to fund claims current and former investors have against Gunns, relating to 'alleged misleading or deceptive conduct and alleged breaches by Gunns of its continuous disclosure obligations' between August 31 2009 and February 22 this year. Earlier this month, former Tasmanian premier Robin Gray retired as a director of Gunns after pressure from institutional investors. Founder and chairman John Gay drew widespread investor ire after he disclosed the sale of Gunns shares shortly before the company reported a 98 per cent slump in first-half profit. Business Day

14 May 2010 Gunns has made the first move in its bid to restructure the company, advertising a preliminary notice for the sale of 28,000 hectares of native forest blocks. The native land sale is a small component of a major restructure that includes the sale of non-forestry assets, such as Mitre 10 and Tamar Ridge Estates. Money from asset sales is to be used to pay down debt and help fund Gunns' 51 per cent-plus stake in its new pulp mill joint venture, Southern Star. Examiner

10 May 2010 The largest shareholders in Gunns are pushing for the removal of directors John Gay and Robin Gray from all positions within the timber empire to help it establish a "social licence". Both men have already resigned or announced an intention to quit Gunns. However, the two biggest shareholders - Perpetual and Concord Capital - are understood to be demanding they also quit the company's subsidiaries. In particular, there is anger that Mr Gay, who has presided over a share and profits slump, is to be chairman of a new subsidiary, Southern Star, which will hold Gunns' local plantations and pulp mill project. A downturn in demand for woodchips from Gunns' Asian customers, who are increasingly demanding FSC certification, has forced the shutdown of the Gunns Long Reach mill for three weeks and its Triabunna and Burnie mills for two weeks. Gunns and industry sources dismissed an overseas report suggesting Sodra had withdrawn from pulp mill discussions. Australian

8 May 2010 Forestry contractors had been forced to sack half their staff in the past year and another three weeks of shutdowns at Gunns' woodchip mills would be the final nail in the coffin for many businesses, the Tasmanian Forest Contractors Association said yesterday. The silviculture industry had been reduced from 700 jobs to 150 in the past year while TFCA executive officer Ed Vincent said the state's 120 contracting companies had reduced their workforce by half from about 800. Advocate

7 May 2010 There is nothing but storm-clouds on the horizon for the Tasmanian forest industry, an analyst says. Gunns Ltd has confirmed it will temporarily shut its three Tasmanian woodchip mills from May 31 to "manage stock levels". Pulp and paper analyst Robert Eastment said an added concern was that Tasmania would soon face stiff competition from the new owners of Timbercorp's expansive forestry assets in South Australia and Victoria. Mercury

6 May 2010 Former Premier Robin Gray retired as a director of Gunns Limited yesterday but will will stay on as a director of Southern Star Corporation – the company hoping to develop the $2.5 billion pulp mill at Bell Bay with a joint venture partner. Mercury

29 April 2010 The Tasmanian Environment Protection Authority is gathering evidence to see if it should prosecute the timber company Gunns for breaching national air quality standards. On the day that Gunns lit the fire, particle levels were well above the national standard. The breach continued the day after the burn off. If found culpable for polluting the air Gunns could face a fine of up to $300,000. Phillipa Stanton is one of many locals who says smoke from the fire drifted down to the nearby coastal towns of Burnie and Wynyard. (She said) The wind was variable and the smoke suddenly would come down and blanket the whole house. Visibility was quite limited, down to sought of 500 metres at most. And when I went out to get the mail the smoke was so severe that I was choking and coughing it brought on a sort of asthma attack; had to go in the house and seal the house up for the next two days. The smoke was a nasty hazard, even the cat was sneezing. There are about 200 planned burn-offs in Tasmania every autumn. ABC

28 April 2010 Gunns' two biggest shareholders have criticised a management shake-up at the forestry group, saying it was unacceptable for founder and chairman John Gay to assume control of a newly created subsidiary. The Australian Financial Review reports that under mounting pressure from investors to sack Mr Gay, Gunns last week said he would step down as chairman and take on a the position of chairman of a newly created subsidiary, Southern Star. But Charlie Lanchester, a portfolio manager at Gunns' single-biggest shareholder Perpetual, said it wasn't acceptable for Mr Gay and another director, former Tasmanian premier Robin Gray, to retain close links to Gunns. "The company and its shareholders will be better served by fresh leadership at the board level." Queensland Country Life

27 April 2010 Gunns said a new unlisted company, Southern Star Corporation, would be set up with the purpose of achieving financial close for Gunns' proposed $2.5 billion pulp mill at Bell Bay in northern Tasmania. Southern Star will own Gunns' pulp mill project and Tasmanian timber plantations. Gunns will retain at least 51 per cent of Southern Star. It plans to sell the bulk of its native forest plantations and "non-forestry assets", which include a network of Mitre 10 hardware stores, a construction division and the Tamar Ridge Estates winery. Timo Piilonen, who between 2004 and 2008 was responsible for the construction and operation of Metsa-Botnia's Fray Bentos pulp mill in Uruguay, has been appointed pulp mill project director of Southern Star Corporation. Adelaide Now

25 April 2010 Accounting for Dummies — Lessons from the Forest Industry by John Lawrence. The suggestion in the title is that accountants are smarter than the average. Most aren’t. Accounting is essentially about plusses and minuses. Not exactly rocket science. But much of what is presented in financial statements confuses rather than promotes understanding, deliberately so at times, unfortunately not an uncommon occurrence amongst professions. The following is an attempt to outline the lessons, 17 in total, from the financial statements of Great Southern, Timbercorp, FEA, Gunns and Forestry Tasmania, by presenting a common sense interpretation of some of the more significant features, and perhaps provide the new government Minister with an accounting analysis of the current forest industry, lest he thinks it is in suitable shape to provide a springboard for the future. The industry, FFIC and the Pulp and Paper Taskforce, blissfully continue to ignore the structural flaws in their industry, and with a nerve unmatched by anyone except perhaps Wall Street bankers keep asking for more assistance to overcome problems which are largely of their own making. Tasmanian Times

24 April 2010 Two of the most controversial figures in the Australian forest industry, Gunns chairman John Gay and director Robin Gray, are to quit its board in a reshuffle. Their departures follow institutional investors' anger over Gunns's dismal recent performance (98 per cent first-half profit drop), and intense lobbying against them. Gunns earned a reputation for bruising conflict under the present board. Its hard line climaxed in the Gunns 20 case, in which the company claimed $6 million against environmentalists for an 'over-arching conspiracy' against them. After five years the case was finally settled, with payouts to most defendants, and costs to Gunns totalling at least $3 million. In February the board said uncertainty over the pulp mill's financing had to end, but yesterday's statement gave no further sign that Gunns was closer to the money. Business Day

  

Monthly summaries of the unfolding story of Gunns' attempts to build a pulp mill.

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