Media reports September 2008

26 September Minister Garrett has approved part of the environment management plan for Gunns pulp mill, despite it failing to meet conditions covering a baseline survey set by the chief scientist. The Australian

25 September Gunns is yet to release details of its $91million retail share offer as part of its campaign to improve its balance sheet. Not much interest expected. The Examiner

24 September On 19th Sept (2008), Environinvest, a MIS company operating in Victoria appointed an Administrator because of trading difficulties. Three days later, Receivers were appointed to arrange an orderly burial. As more distressed asset sales occur, the market price of those assets will fall. Gunns too are trying to sell $170m worth of trees in an effort to raise more money. So the market price for trees might come under a little more downward pressure in the coming months. Not only have MIS promoters relied on overly optimistic yield projections (GSL’s first 6 crops will average only 60% of initial estimates) but investors have excessively relied on debt. Worse still is the money that has been diverted from the public purse merely to finance a few private benefits. Booms are usually followed by busts, and this is what is now occurring. It beggars belief that the shapers of our destiny have contemplated building a downstream processing industry that requires large public investment on such shaky MIS foundations. Tasmanian Times

24 September Senate report produced by Opposition and minor parties condemns tax breaks for tree plantations and concludes tree plantations spell the death of small farms and are bad for regional communities. Claims by plantation industries are at loggerheads with conclusions of CSIRO sustainable yield studies in the Murray Darling Basin ABC Country Hour

24 September Gunns say they are negotiating with an investor on the proposed sale of a $170 million tranche of forest resources.

23 September Gunns attempt to raise up to $91 million from retail shareholders is set to fail. Analyst says "no one would be buying shares at $1.50 when they were trading at $1.18 on the market". The share price dropped from $2.31 to $1.17 over about 5 weeks and market capitalisation has dropped to about $710 million despite the additional capital. The Mercury

23 September Australian Greens Senator Christine Milne tabled a case study of the devastating impact of Managed Investment Schemes (MIS) for plantations on communities in northwest Tasmania in the Senate. Tasmanian Times

23 September The Federal Environment Department has finally agreed to release a key report on effluent into Bass Strait from Gunns' planned pulp mill, if Gunns agrees. Greens media release

22 September An analysis of the Gunns black hole. Whether Gunns can prevail in today’s financial climate and whether Kevin Rudd can, or will, act to protect taxpayers, contractors and investors from dubious federal schemes, remains to be seen. At every step, pulp novices Gunns have been spurred on by knowledgeable consultants that convinced Gunns to bet the company on a project that was too big, too risky and too expensive. Did they honestly report the risks to Gunns? The Integrated Impact Statement (IIS) contained no economic risk assessments, no alerts about the many weaknesses in Monash economic modelling, understated dioxin hazards and so on. The RPDC process that would have alerted the company to such concerns was truncated, leaving Gunns’ whole company at risk. Independent experts identified the risks when the IIS first appeared, but the project carried on regardless. Perhaps Gunns will bring their advisors to account in a new legal action... Tasmanian Times

22 September Gunns are reported to be wooing Asian Pulp and Paper and Asia Pacific Resources International Holdings Limited. Both companies are caught up in the Indonesian Forestry Corruption inquiry. Tasmanian Times

22 September 'Footsteps For A Pulp Mill-free Future' tours have been "really successful" say Wilderness Society but Gunns' representatives failed to show up to discuss issues. The Examiner

20 September The Wilderness Society has promoted a 'Footsteps For A Pulp Mill-Free Future' tour for people from Melbourne and Sydney as a chance to visit locations that would be affected by the planned mill. Gunns labels anti-pulp mill tour misleading. The Examiner

19 September Gunns maintained its pulp mill preparations were progressing -- despite speculation its plummeting share price would kill off the $2 billion project. The share price is down by one third since August 21. The Mercury

19 September Gunns claims Launceston's water supply and flows through Cataract Gorge will not be affected by the planned pulp mill. ABC

19 September Financial adviser says Gunns retail share offer at $1.50 per share is in trouble. Gunns becomes more attractive as a takeover target as its share price drops. Yahoo business

18 September Gunns' shareprice continues down, putting in doubt its bid to raise up to $91 million from retail shareholders. ABC

17 September The betrayal of the Tamar Valley by Peter Henning . Wednesday, August 27, 2008 may well become the most important day in the political lives of all sitting Labor and Liberal members of Tasmania’s House of Assembly. On that day, in Launceston, all members of the Bartlett Labor Government and the Hodgman Liberal Opposition in the lower house of the Tasmanian Parliament rejected Kim Booth’s private member’s bill to repeal the Pulp Mill Assessment Act 2007, thereby renewing their commitment to it in its entirety, endorsing all sections of the legislation as it stands and all associated conditions in the Pulp Mill Permit.

16 September John Lawrence documents how investors and taxpayers have been taken for a ride on the MIS plantation gravy train at Temma on the west coast of Tasmania. "The site is an unmitigated disaster" Tasmanian Times

15 September Gunns finances: an analysis by John Hawkins of the value of Gunns land bank (as reported to the ASX) exposes a serious and unaddressed problem. Tasmanian Times

14 September Gunns' plans for a $2 billion pulp mill are in doubt, with environmentalists now putting the heat on potential partners and financiers around the world. The Age

11 September Richard Herr, political analyst says those who lobbied members of Parliament to fast-track the assessment of Gunns' proposed pulp mill in Northern Tasmania should be held to account. ABC

10 September The Supreme Court has heard the State Government could apply to strike out a case which asks the government to explain reasoning behind section 11 of the Pulp Mill Act. ABC

9 September Opponents of Gunns' planned pulp mill are infuriated by Minister Garrett granting Gunns Ltd an extra three months to get its Bell Bay pulp mill approved. Gunns confirm that the company could live with the loss of a $15 million State Government sovereign risk agreement -- insurance against a change in government policy that affects Gunns' wood supply. The Mercury

8 September Best-selling author Bryce Courtenay has delivered a scathing attack on Tasmania's forestry industry. Courtenay does not hold a high view of Gunns' plans for a northern Tasmanian pulp mill. "Stuff it up their bums," he said. The Mercury

8 September An excellent analysis of MIS forestry schemes by accountant John Lawrence. "These are just the economic issues. There are of course all the planning, social and environment issues as well. In the same way as we are now witnessing the decline of financial engineers and their vehicles such as Centro, Allco, Babcock and Brown, ABC Learning Centres et al, are we also seeing the beginning of the end of the current MIS model?..." Tasmanian Times

8 September The Federal Environment Minister Peter Garrett has given Gunns another three months (5 January 2009) to finalise Commonwealth planning approvals. ABC

5 September Gunns' shares dropped more than 16 per cent when trading resumed on September 4, stunning market watchers and casting doubt on the company's capital raising program. At a closing price of $1.40, the market capitalisation is $967 million. John Gay said he was pleased with the capital raising which indicates "strong support for the board's long-term strategic direction". The Mercury

5 September Gunns has officially sought an extension of a couple of months to the Federal Government's October 4 deadline for Commonwealth approval of permits for the $2 billion pulp mill. The Examiner

4 September Gunns shares plunged 16% after a capital raising and admitted the future of its proposed $2 billion Tasmanian pulp mill was in doubt. There is no guarantee that any of the additional $91 million retail offering will be raised. Geoffrey Cousins says that if Gunns already has problems raising $400 million it will struggle to raise two billion dollars for the planned pulp mill. The Age

4 September Gunns directors say they had yet to decide on the extent to which they will take up the share rights issue. Business Spectator

4 September Contractors are being exploited by a forestry industry that had institutionalised over-capacity. A new study says individual contractors are continually kept hungry for more volume. Harvesting costs had risen way ahead of income. North-East contractors are being transferred from Forestry Tasmania control to Gunns. The Mercury

 3 September Senator Christine Milne called once again for the release of the Herzfeld Report into the proposed Gunns Pulp Mill's likely pollution impacts and the need for tertiary treatment of its waste. "I am told that the report identifies over 160 chemicals of interest in the proposed Pulp Mill's effluent, including phytotoxins and dioxins." Tertiary treatment could add a further $50-500 million cost. The Greens

3 September The Financial Review reports that Gunns was now talking to Asian businesses that were short of fibre and resources, like Asia Pacific Resources International Holdings and Asia Pulp & Paper. Business Spectator

2 September Repairing Gunns' balance sheet is one thing. Whether there is enough goodwill among investors to support John Gay on the expansion trail once again - via a pulp mill three times the size of Gunns' market value and requiring the injection of even more equity at some point - is entirely another. The Age

2 September Premier Bartlett outflanked by Gunns on his promise to tear up a sovereign risk agreement for the mill on November 30. The fine print of the sovereign risk agreement may prevent its termination until well into next year. The Tasmanian Government was last night unable to clarify the situation. Gunns declined to comment. The Australian

2 September The Wilderness Society said Premier David Bartlett should instruct Forestry Tasmania to renegotiate a pulpwood supply agreement for Gunns pulp mill using solely plantation forests. The Examiner

1 September The State Government continued to downplay Premier Bartlett's comments that there would have to be "good commercial reasons" for Forestry Tasmania to extend the wood supply agreement for the mill beyond November 30. Also, the Wilderness Society found discrepancies in Gunns' claims to the stock exchange that its mill would be entirely plantation-based. The wood supply agreement shows one million tonnes having to come from old-growth say TWS. The Mercury

Back to top