Bill Belsey's back and looking for a conversation

“Sun Wave Investments still has an interest, and I would say a vested interest, in that property...Sun Wave would like to have that property back." -- Bill Belsey spokesman for Sun Wave Forest Products, throwing another log on that fire of intrigue over the ongoing efforts to sell the Watson Island pulp mill site.

The last we had heard of the former MLA for the North coast, Bill Belsey was heading off southbound in the motor home to seek out some sunshine and the life of leisure. So it was a bit of a surprise to see him resurface on the local scene as the apparent point man for the Sun Wave group, the one time owner and delinquent tax payers who currently are involved in court appearances with the City of Prince Rupert over the status equipment at  the old pulp mill site.

A surprise course of litigation, that seems to have slowed down to glacial the process of selling that property for employment generating possibilities and removing the burden of monthly maintenance fees from the City of Prince Rupert's financial accounts.

Earlier this week The Northern View outlined Belsey's duties on behalf of the Sun Wave group, apparently the conduit from which Sun Wave would like some form of communication from the City.

From his efforts we learn that Sun Wave still has desires to retain ownership of the property, something which most likely won't be well received by weary taxpayers in Prince Rupert, but might find some traction as this process winds its way through the British Columbia legal system.

In what seems to highlight the bizzarro nature of this whole mess, Sun Wave which was thought to be out of the picture back in September when they tossed back the keys back to the city .  Now for the moment is one of the few participants in the fun and games of this Watson Island fiasco which has some kind of actual idea to share as to what they would do with the site. Lax Kw'alaams also offered up a hint as to what they might do with the property if they were the successful bidder, but for the moment it seems all bids are on hold, all plans on the back burner.

Of course the already burned residents of Prince Rupert might ask why they didn't follow through on some of these ideas prior to September, but then that's the kind of thing that keeps lawyers heavy in billable hours we imagine.

What seems worrisome to those not sanctioned to the many in camera sessions at City Hall, is the ever changing dynamic of this process.  From the hopeful statements of the Mayor in September that it would be a quick process of turning the property over to another owner, we now find that potential sale process stalled and the very real prospect that it may drag on for the foreseeable future.

High among the main concern for local taxpayers is the prospect of as Mr.Belsey puts it the "costly litigation path we are going down." 


The lack of information on the issues surrounding Watson Island is leaving residents frustrated at the latest developments and concerned about a potential black hole of debt while the issues amble along at their own pace.

So far Mr. Belsey seems to be the one doing the most of the talking, it might be helpful for the residents of the city if their elected officials might weigh in with some reassuring advice along the way here.

The city is still waiting for a call for details on Sun Wave's intentions

CFTK News has an item posted to their website today that rekindles those frustrating thoughts of the Sun Wave saga and that company's less than forthright communication on the state of the Watson Island pulp mill.

An outstanding tax balance of 5.6 million dollars still is on the books for Sun Wave, with a deadline of September for delivery of payment. Should Sun Wave not make that payment by that timeframe, the City will become owners of moribund mill.

Mayor Jack Mussallem says in the CFTK article that the city is waiting for Sun Wave to make that call. Though judging by the company's recent record of communication, we suggest that the Mayor not get anchored to the phone, perhapst we should just leave the answering machine on and return the call should it ever comes in.

SunWave officials surface long enough to process an appeal

While the days of pulp and paper making seem far in the past, the ghosts of Watson Island continue to appear from time to time.

We haven’t seen, nor heard much from China and the SunWave ownership group lately, the owners and would be operators of the mothballed Skeena pulp mill having kept a rather low profile in the last year or so.

However, it seems there’s nothing like a tax bill to get someone’s attention.

Sun Wave’s management has put in an appeal with the BC Property Assessment Appeal Board seeking a hearing on the recent assessment of the property for 2008.

There has yet to be a date issued for the appeal, but city officials suggest that it will carry through into 2009 and most likely won’t be resolved until the summer.

The Sun Wave situation continues to carry a cost to the City of Prince Rupert of around six million dollars, however the City’s Chief Financial Officer, Dan Rodin says any decision by the Assessment Appeal board won’t impact on the city’s finances.

The background on the Sun Wave appeal was provided n Thursday’s Daily News

Pulp Mill’s owners ask assessors to lower value
Sun Wave Forest Products appealing through a hearing
By George T. Baker
The Daily News
Thursday, November27, 2008
Page two

The owners of the Watson Island pulp mill are appealing the mill's property tax assessment.

SunWave Forest Products, a subsidiary of the China Paper Group that also goes by the name China Pulp and paper - a subsidiary itself to the China : trade International Holding Co. - is the sole owner of the property.

That company has booked a hearing with the BC Property Assessment Appeal Board. The city has not yet been informed of the date when that hearing will take place.

According to the city's chief financial Officer, Dan Rodin, while it is not known when the hearing will happen, it should not impact the city's finances.

Rodin said at Monday's special council meeting that finances are healthy even with the $6 million weight of the Watson Island pulp mill still tied to it's neck.

Rodin said he expected the Sun Wave property appeal to roll over into next year, meaning no resolution should be expected before the summer.

"Other than that, we are doing well," said Rodin. "We've made sufficient provisions, we believe, for any kind of an assessment that SunWave gets."

Councillor Kathy Bedard wondered if the conservative assessment of the property taxes that the city would receive from SunWave was included in the reserve figures.

Rodin said that it was part of the reserve side of city budgeting.

"The numbers you have there, we are very confident that we'll do that or at least better by the end of the year once this issue with SunWave gets resolved," said Rodin.

The city is expected to transfer an extra $2.55 million into reserves meaning the city will be building up its finances, according to outgoing Mayor Herb Pond.

The amended budget finalized on Oct. 31, predicts the city will collect $13.2 million in tax revenues from residents and business.

Departures at Sun Wave keeps Watson Island in limbo

“Well I guess the disappointment is that they certainly haven’t performed to what they said they would do,” -- Forest's Minister Rich Coleman expressing frustration at the pace of events at the Watson Island pulp mill site.

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It would seem that the departure of some key members of the Sun Wave Management group at the moribund Prince Rupert pulp mill continues to add mystery to the plans for mill and mill site on Watson Island.

The Terrace Standard features an on line article in which the Forest Minister Rich Coleman relayed details that neither he nor his staff have heard much from the mysterious managers from Sun Wave since some key managers apparently left the region.

It was suggested that they were still diligently working on their re-opening plans, though there has been little evidence of that locally in the three years that they purchased the remains of the then New Skeena Forest Products.

The Standard reports that one bit of business that they did complete before departing to was to ensure that the B line mill had been dismantled and shipped back to China.

With their back tax breaks now rescinded, the company owes 4 million dollars in back taxes to Prince Rupert and 250,000 dollars to Port Edward, all due to having missing a deadline of pulp production of December 31, 2007.

Minister upset with Chinese over Rupert mill inactivity

Terrace Standard

May 28, 2008

FORESTS MINISTER Rich Coleman has stopped short of directly criticizing the lack of progress a Chinese company is making in re-opening the closed Skeena Cellulose pulp mill in Prince Rupert it bought three years ago.

But he clearly was irritated with the inactivity from Sun Wave Forest Products, a unit of the Chinese-state owned China Paper Group.“Well I guess the disappointment is that they certainly haven’t performed to what they said they would do,” said Coleman last week while visiting Terrace to host one of his roundtable discussions on the future of the forest industry.“

The disappointment is that there isn’t something that integrates the forest sector up here. I guess what it does prove is that you really need deep, deep pockets.”

Sun Wave appeared in 2005, acquiring what was once a linchpin of the northwest forests industry for $3.3 million. The pulp mill at one time employed more than 500 people using fibre from interior and other mills.

Sun Wave’s purchase followed an unsuccessful attempt by former Skeena Cellulose executive Dan Veniez to open both that mill and the former Skeena Cellulose mill in Terrace. And that occurred after Skeena Cellulose shut its doors in 2001 after the newly-elected provincial Liberal government refused to carry on financing it as did the NDP.

Coleman said his top officials haven’t had any contact from Sun Wave for weeks, following the departure of some of its key people working on re-opening plans.

One thing Sun Wave did do was dismantle the smaller of the mills two production lines, called the ‘B’ mill and ship it back to China.

It then sold the wood licences that came with the purchase with a large licence going to Coast Tsimshian Resources, owned by the Lax Kwallam band at Port Simpson on the coast and a smaller in the Hazeltons going to a company controlled by Gitxsan hereditary chiefs.

Sun Wave also received a property tax break from the City of Prince Rupert based on a re-opening schedule it filed with the city.After it assumed control of the location, it said several times it was on the verge of lining up $100 million for start up costs.

As part of the sale, Sun Wave signed agreements with both the District of Port Edward and the City of Prince Rupert that would forgive the back-taxes owed on the land by its previous owners if the company were producing pulp by December 31, 2007. Since that deadline was not met, both municipalities voted to rescind the agreement, which leaves more than $4 million in taxes owed to Prince Rupert and more than $250,000 owed to Port Edward.

Sun Wave officials also met in 2005 with the Terrace Lumber Company, formed by Terrace investors to buy the Skeena Cellulose mill here the same year, but no business relationship ever emerged.

Coleman did note that the province spent more than $30 million in the early part of the decade at the mill site to clean it up after decades of residual pollution.“

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When a company goes bankrupt, it becomes the liability of the crown in one way or another,” he said.As for predictions that Sun Wave would one day re-start the mill, Coleman said he was ever hopeful.“I think they have challenges with fibre of their own [in China] so I would think they will have to look for fibre [here],” he said.

“Let me tell you how it will be”

With the official deadline for operations now long passed, Sun Wave Forest Products has been put on notice that the City of Prince Rupert is coming to look for their money.

City Council passed a motion at a closed meeting last week terminating a partnership agreement with Sun Wave, as the Forest Products company was no longer in compliance with the agreement.

The city manager has been directed to collect outstanding taxes, fees and charges owed to the city and to take any actions necessary to including legal proceedings to accomplish the task.

The company had been granted a five year break on taxes, with the city granting them tax free status for the first five years of production, providing they commenced operations of the Watson Island Pulp Mill by January 1 of 2008.

With the calendar now heading towards the final week of January and no pulp on the horizon from the Island, the time to send in the tax collectors has come.

The city of Prince Rupert move comes two weeks after the District of Port Edward rescinded a tax agreement that they also had in place with Sun Wave, bringing to an end the arrangements that Port Ed like Prince Rupert put in place in hopes of seeing the one time economic engine of the region come back to life.

The Daily news examined the controversial tax breaks and what the city’s plans are now to recoup their losses from the Chinese company which purchased the mill back in the summer of 2006.

The much discussed and controversial issue was featured as the front page story in Tuesday’s paper.

CITY IS GOING AFTER PULP MILL TAXES AS DEADLINE PASSES
By Leanne Ritchie
The Daily News
Tuesday, January 22, 2008
Pages one and three

Sun Wave Forest Products has lost its free ride on taxes from the city of Prince Rupert.

The company, that currently owns the Watson Island Pulp Mill, officially missed its deadline to reopen the mill on Jan. 1, 2008 and the city will now be going after the taxes it is owed.

City council discussed the issue in camera last meek and then made a very short statement when they released the motion during the regular council meeting.

"There was a motion passed at the closed meeting that the partnering agreement with Sun Wave Forest Products Ltd. be terminated on Feb. 5, 2008, provided Sun Wave Forest Products is not in compliance with the partnering agreement," said Acting Mayor Tony Briglio.

“And that the city manager be directed to collected outstanding taxes, fees and charges owed to the city of Prince Rupert and be authorized to take any actions necessary, including legal action, to collect.”

No one on council had any appetite to elaborate on the motion for the benefit of the public.

”It’s pretty straight-forward. Do any council members wish to add to that for any points of clarification> asked Briglio, who was replied to with silence from other council members.

“It’s pretty self-explanatory. We are moving to collect what is owed to us.”

The motion brings to and end a controversial agreement that gave the company tax-free status for five years, provided it opened the Watson Island facility for the purpose of producing pulp and was employing local people.

However, under the agreement, Sun Wave was expected to make some sort of contribution to the city in those first five years. According to the city, it agreed to make a contribution of $100,000 in 2007.

After the first five years, Sun Wave would then have paid taxes based on a complicated formula that took into account the price of pulp, production levels and the Consumer Price Index.

The tax agreement was opposed by one of the city’s other major employers, Prince Rupert Grain.

Sun Wave Forest Products purchased the Watson Island Pulp Mill during a fire sale in the summer of 2006.

The change of ownership followed the bankruptcy of New Skeena Forest Products.
Sun Wave is owned by the China Paper Group, a corporation of which 80 per cent is owned by the China Central Government, and which operates close to a dozen pulp and paper mills in China.

The mill, which has not operated since 2001, used to employ in excess of 500 people during its tumultuous periods of operation.

Port Edward, which also had a tax agreement with Sun Wave, also rescinded the tax agreement with the company at a meeting earlier this month.

Port Ed council expresses disappointment at Watson Island situation and rescinds a tax exemption

Like Prince Rupert, back in 2006 Port Edward granted a bit of tax relief to the would-be owners and operators of the Watson Island mill.

With the arrival of the New Year and no progress on the mill front, the council for the district had to come to terms with the prospect of the mill never operating again.

With that weighing over the council, they issued a call to rescind the tax relief program that had been in place since 2006, which had granted Sun Wave the tax vacation while it ostensibly was making plans to operate the mill.

With that process seemingly in limbo, as Mayor Dave MacDonald suggested the mill situation seems to be back to square one.

Perhaps, it is even further back than that, with there being no apparent movement to ever reopen the site or any indication of what is planned for the island.

The point of view out of Port Ed was found in Thursday’s Daily News.

Port Ed facing up to mill's missed deadline
By Patrick Witwicki
The Daily News
Thursday, January 10, 2008
Pages one and three

The realization that the Watson Island pulp mill may never reopen was painfully evident at Port Edward council meeting Tuesday night, as a subdued council quietly passed a bylaw that rescinds an earlier tax exemption bylaw the district and the city of Prince Rupert had given to Sun Wave regarding the former Skeena Cellulose mill.

Voices were rather soft and coarse as councillors discussed a report put forward by Chief Administrative Officer Ron Bedard, who was not present at the meeting.

"The obligations by Sun Wave have not been met," said Mayor Dave MacDonald.
"We want to rescind our agreement."

When Sun Wave originally purchased the land at Watson Island in 2006, an agreement was reached where, under the condition of getting the mill back up-and-running, taxes would be exempt or reduced for the first five years of Sun Wave's ownership.

But that was contingent on the mill resuming operations by Dec. 31, 2007.
That deadline has since passed with no sign of the mill ever reopening, so the district was forced to go with another plan.

"Part of the agreement was to have the mill up and running by January (2008), and that just isn't possible," said MacDonald.

The report reiterated the three conditions regarding the Tax Exemption bylaw: that the lands are continuously in use for the operation of the service by Sun Wave; the obligations of Sun Wave to provide the service are being continuously met; and Sun Wave continues to meet its other obligations under the agreement.

But Sun Wave hasn't done this, according to Port Edward, so the tax exemption is now null and void.

"Sun Wave has therefore failed to meet all the conditions under which the tax exemption was to be provided," said the report.

Coun. Murray Kristoff wanted to confirm whether council's decision to support the report reflected the councillors' opinion or whether their support meant they were accepting the appropriate legal advice for Port Edward.

"Is that our position, or our legal position," he said. "Shouldn't that be a little clearer? It's obviously a broken agreement ... but is it our opinion, or a legal opinion?"

MacDonald suggested that it was a little bit of both, and that it was time for the district to move in a different direction. But he also said it appears that the situation with the mill is back to square one, which doesn't sit well with him.

"One thing that upsets me is that we're in the same position as a few years ago," he said. "It's not fair that the government has us paying taxes on this."

Retrospectives and anticipations

The Northern View of January 9th took full advantage of Mayor Herb Pond’s way with words, to fill a couple of articles looking at the state of Prince Rupert heading into 2008.

From a review of where the city stands with Sun Wave Forest Products (no shame for anyone, but it’s time to move on), to those bright lights of the container port, the Mayor suggested in the articles that Prince Rupert had begun to turn the corner in 2007.

He was enthusiastic about our spot on the world stage, mentioning the many invitations that the city has received in the last year to spread the word in communities throughout North American and beyond.

He wasn’t exactly heavy in the details department in the articles, making his comments more of a vision statement, than an actual line by line account of the year just past or a timeline for the year to come.

As we head into 2008, the Mayor feels that a lot of our questions will be answered. With investors apparently poised to set up shop in our town, the Mayor believes that 2008 will see some of those projects announced.

It would seem that prosperity is still just around the corner, we guess it’s just a matter of which corner and how far away it is.

Mayor says city making good progress with Sun Wave
Shaun Thomas
The Northern View
January 9, 2008
Page Two

With December 31, 2007 having passed without pulp being produced by Sun Wave Forest Products at the Watson Island Mill, Prince Rupert Mayor Herb Pond says the city remains in productive discussions with the company to ensure that they live up to their obligations to the benefit of North Coast residents.

“We have been able to drive home the point that they have not been able to fulfill their commitment under the partnering agreement and nobody has to hang their head in shame over that, it just is what it is. Now we need to move on, and moving on involves a number of things. It involves that site being put into productive use for job creation, it involves seeing taxes that are owed caught up and paid and it involves ensuring that there is a business enterprise out there that can pay taxes moving forward,” he said, noting that the total owed by Sun Wave is in the millions of dollars.

“There are really two amounts of money. There is the amount of money we owe at other levels of government on their behalf in terms of school taxes and those sorts of things and those were never part of a partnering agreement and are outstanding. They are certainly over $1 million although I can’t remember the exact number. Then there is the municipal tax portion, which is probably in the $3 million range.”

And while Sun Wave did not put the land to use for industrial or job creation purposes Pond said that he remains confident that, should the company choose, it wouldn’t take long to find a tenant for the site.

“There is a lot of interest in that property. That property is one of the most desirable investment sites on the west coast of North America.”

“Hopefully this is the year that we put the last of that story behind us and we start talking about the future,” he added.

MAYOR DISCUSSES 2007, 2008
By Shaun Thomas
The Northern View
January, 9, 2008
Page three

As the New Year gets underway, Prince Rupert Mayor Herb Pond is reflecting on the successes of 2007 and looking ahead to what could come to the community in 2008.

Citing the opening of the container port at Fairview Terminal and investment in the community by a number of new and existing businesses, Pond said that the last year was one where the community started to turn the corner.

“2007 was a year of returning slowly to health as a community. We had families returning, family-supporting jobs entering the community and seeing some improvement as a result of that in retail and other sectors. We still have a long way to go, but 2007 was a year of substantial improvements on a number of fronts.”

“Without doubt it was a year when we continued to be invited to step onto the world stage and where we cultivated increased interest in what is happening here in this North Coast community and the Northwest in general/ It was really positive and it is leading to more,” he said in regards to the numerous conferences and events that the city was invited to in communities throughout North American and beyond.

With 2007 seeing people and jobs returning to the community, Pond said he sees 2008 providing more good news for the city.

“I think 2008 is a year where a lot of our questions will be answered. It is where the picture becomes clearer as things come in. We all knew a container port would be good for the community, but we didn’t understand and we still don’t understand all of the opportunities that are going to generate.”

“We are certainly dealing with investors whoa re interested in setting up businesses and taking advantage of the transportation complex that exists now. I think in 2008 we will see some of those projects announced, we sill see increased business through the container port and hopefully in 2008 we will hear some good news about phase two. It will be a year of continued growth as we return to health,” he said.

And while the city has yet to determine the priorities for 2008 and could be looking at a 10 year infrastructure plan, Pond said he would like to see some infrastructure maintenance or improvement projects get underway in 2008. Among the projects that could be part of 2008 are improvements to the airport and a bypass road.

And in the end, well, let's say that nobody was terribly surprised

Judging by the lack of activity at Watson Island, the front page story in Friday’s Daily News probably came as a surprise to… well, no one actually.

With their latest correspondence finally answered, City council has pretty well come to the conclusion that there probably won’t be a re-opening ceremony any time soon.

The Chinese owners of the moribund pulp mill at Watson Island didn’t particularly seem to be in any hurry to re-open the mill, and in fact aren’t even in the mood to chat about the issue with the city.

Sun Wave Forest Products gave what is described as a “lukewarm” response to recent initiatives of the city to determine their plan of action for the mill.

The official response from Sun Wave officials was described as that of a need to “discuss it”!

This sounds a lot like the kind of thing your Mom or Dad would say before they lowered the boom and said you couldn’t drive the family car anymore, or give in to some other such outlandish request.

The latest developments over at Watson Island add to the growing legend of the mill, which has featured one twist or turn after another over the last number of years.

It certainly quashes the line of thought being generated as recently as two days ago, one national news article reported in their story on the declining census numbers that there was an "outside chance" that the mill may soon be back on line, suddenly outside chance apparently has become "fat chance", makes you wonder whatever happend to this "almost a guarantee"!.

The Daily News featured the latest developments on this long running saga in Friday's paper.


‘CITY NO LONGER COUNTING ON PULP MILL REOPENING’
By Leanne Ritchie
The Daily News
Friday, March 16, 2007

Pages one and two

The city got a lukewarm response from Sun Wave Forest Products about its plans for the pulp mill.

After sending several letters to the most recent owners of the Watson Island Pulp Mill, Prince Rupert Mayor Herb Pond confirmed the city has received a response. It came last week.
“We’ve been asking for a start-up plan or evidence of a start-up plan,” said Pond.

What the city got in response was a message that the company would have to “discuss it”.
The city has been pushing to find out what is happening at the mill site.

It has an agreement with Sun Wave to forgive the company’s property taxes for its five years of ownership, if the pulp mill starts operating by the end of this year.

“We felt like we were speaking into a vacuum, so it was really good to have correspondence from Sun Wave and of course a visit from their site manager. Negotiations are in process,” said Pond.
In particular, the city has been asking about the “contribution in lieu of taxes,” which the company was supposed to make each year during its first five years.

Sun Wave should be making its first “contribution in lieu of taxes” this year, given they purchased the property back in the middle of 2006.

The unique tax agreement was crafted by former city administrator Victor Kumar and signed by council, despite protests from other major industrial taxpayers.

If the pulp mill doesn’t start up in time, Pond says the city believes it will be able to recuperate the full taxes from Sun Wave owed from the middle of 2006 to the end of 2007.

“We believe and certainly have implemented the legal mechanisms that they owe us those taxes,” said Pond. “We will collect taxes and charges against the land for the full amounts owing.”

Taxes on the pulp mill are worth about $2 million a year. If Sun Wave doesn’t start the mill — a $100 million undertaking that needs about six months of preparation before pulp rolls off the line — Sun Wave would owe the city about $3 million.

When asked if he believes the pulp mill will restart, Pond replied that the city is no longer including the pulp mill in its economic forecasts.

“Hope springs eternal. But in terms of any form of planning the city is doing, predictions in terms of what economic development is doing or planning around housing, the restart is discounted. Having said that, obviously we will keep the door open and do all we can ...” said Pond.

Not paying taxes on the pulp mill has become a tradition for former owners, starting with Skeena Cellulose and then the provincial government right up until 2002 when it was sold to NWBC Pulp and Timber.

The city is $10 million in debt due largely to the fact that for several years it continued to spend taxes it was not getting from the beleaguered forestry operation. The city thought the province would pay the municipality those taxes.

In 2002, the provincial Liberals were elected and vowed the sell the company. NWBC Pulp and Timber (known locally as New Skeena Forest Products) convinced Northwest municipalities to sign a tax deferral agreement when it purchased the operations. Under the agreement, the tax payments would start small but begin ballooning as the company began to make money.
After two years of efforts to find $80 million in start-up funding for the pulp mill, including asking the city of Prince Rupert to put up $20 million, New Skeena Forest Products declared bankruptcy in 2005.

Overall, the city has lost close to $20 million in lost taxes because the three former owners have not paid taxes.

All the city has gotten for the $20 million was $300,000 out of the bankruptcy of New Skeena Forest Products.

“The court washed those taxes away,” said Pond.

And the result was that the city was pushed to the edge of bankruptcy in 2005/2006 and told by provincial authorities to cease spending money on capital expenditures until it got its finances in line.

Yet, city council chose to sign a new tax deferral agreement with Sun Wave because, at the time, it was the only company looking to buy the pulp mill assets. It was work with Sun Wave or face the pulp mill’s liquidation, said Pond.

“Certainly, people have always speculated about the intention (of Sun Wave) and you can spend endless hours speculating,” said Pond.

“At the time we negotiated our arrangement with Sun Wave, they were the only partner in the whole area that was taking about any potential offer of any sort. ”

According to Sun Wave, there are currently 17 people employed at the site, seven are members of the Pulp Paper and Woodworkers of Canada Local 4 and are working for Sun Wave. Ten people are employed by Pope and Talbot, a forestry company shipping pulp chips through the property, three of those are from Prince Rupert, two from the Lower Mainland, and the rest from the Northwest.

Sun Wave puts some money in the bank, but still no plans to start a mill

The purchase of 390,000 cubic metres of annual harvesting rights in the Kispiox Timber Supply area has been completed as Sun Wave Forest Products received their final payment of $750,000 of the 1 million dollar total purchase price for the woodlands that once fed the Skeena Cellulose mill.

With the deal complete, the Gitxsan are now free to make their own arrangements with whichever pulp or lumber producer may wish to make use of their Timber supply. One player to watch in this will be Nanaimo based Harmac, which has been scouring the northwest looking for a fibre supply for their mill on Vancouver Island.

The final payment once again also reminds one and all of the lack of progress in moving the pulp mill on Watson Island forward and into an operational phase. Once slated to be operational in 2007, Sun Wave has done very little in the way of preparing the site for operations and indeed the prospect of a working pulp mill in Prince Rupert in 2007 seems like a lost cause at the moment.

The front page of the Daily News featured the details of the agreement between Sun Wave and the Gitxsan in the Friday edition as well as a review of where things stand between Sun Wave, the city of Prince Rupert and those who are still waiting for a return to the pulp lines on Watson Island.

Sun Wave completes sale of forest licence to Gitxsan
By Leanne Ritchie
The Daily News
Friday, March 8, 2007
Page one

The Gitxsan have completed the purchase of the Carnaby Forest Licence from Sun Wave Forest Products, but are not tied in to selling any fibre to the current owners of the Watson Island Pulp mill.

According to Gordon Sebastian, Gitxsan Treaty Office executive director, Gitxsan Forest Enterprises (GFE) has finally completed the purchase of 390,000 cubic metres of annual harvesting rights in the Kispiox Timber Supply area.

A $750,000 cheque was issued March 6, the final payment in a $1 million deal between Sun Wave Forest Products and GFE, a corporation controlled by the Gitxsan hereditary chiefs.
“There were a lot of hassles left over from the previous licensees (New Skeena Forest Products and Skeena Cellulose) so GFE couldn’t do winter logging until those were cleared up,” said Sebastian. “Forest stewartship plans are now being developed and we’ll be fully operating by the summer logging season.”

According to assessments of the licence done during the sale of New Skeena Forest Products’ assets, there were $2.8 million in silviculture liabilities that needed to be completed on that tenure. Sebastian noted the deal with Sun Wave does not limit GFE’s fibre-selling options.
“The agreement does not tie us in to anything as far as an exclusive deal with Sun Wave for providing them fibre. If we can get a better deal selling to someone else then they don’t want to restrict us,” he said.

In addition to the annual cut provided in the forest licence, the Gitxsan also have tenure under a Short Term Forestry Agreement signed with the province for the rights to harvest 1.2 million cubic metres of timber during the next five years.

“The Gitxsan economic strategy for the forest sector on the traditional territories is now five years ahead of schedule,” said Sebastian. “Our next focus is to make as much progress in our mining and fishing sector strategies.”

The sale of the tenure by Sun Wave appears to be the only recent activity of the company, which at one point said it planned to have the pulp mill up and running by April 2007.

Given the lack of any apparent start up at the mill site — even an aggressive plan would require six months of work before start up — it seems unlikely the mill will be starting any time soon.
Prince Rupert city council had earlier agreed to give the company a five-year tax break, provided it started the mill before the end of December 2007.

Council has been sending letters to the company, owned primarily by the Chinese Central Government, with no avail and no response as to what is happening with the property. In addition to the tax deal, the city also agreed to sell the land to Sun Wave for less than a third of its estimated value — $1.6 million. The assessment on the waterfront, rail-linked property put it closer to $6 million.

This was all done on the basis the company was looking at starting the mill.

BC Forestry Minister disappointed over status of Sun Wave progress

There’s apparently not much that can be done, but the Province through its Minister of Forests expressed his frustration and disappointment over the slow state of progress in putting the Skeena pulp mill site back into action.

Appearing in Terrace, the Minister Rich Coleman said that the process seemed too embroiled in a network of administration and bureaucracy. He also said he didn’t think that the Chinese owned company would be opening the doors on Watson Island anytime soon.

He did suggest that province would consider other forestry matters in the Northwest to try to help the industry progress, including construction of logging roads, exploring new projects such as the Houston Pellet factory, looking into energy generation with BC Hydro and continuing with the process of raw log sales.

That last idea might run up against a bit of resistance in the Northwest, it’s not particularly of benefit to the region to just ship the logs away without any form of processing, jobs as well as a vital resource leave the region without a great deal of benefit to those that work in the Northwest. But one suspects that the raw logs will continue to be shipped out, at least until times improve or Sun Wave decides what its plans are.

A full report on Coleman’s visit to Terrace was provided by the Terrace Standard.


Lack of pulp mill action disappoints forests boss Rich Coleman

By ROD LINK
The Terrace Standard
Feb 21 2007


PROVINCIAL FORESTS minister Rich Coleman doesn’t hold out much hope Chinese state-owned Sun Wave Forest Products is going to open its moth balled Prince Rupert pulp mill anytime soon.

“It’s a bit frustrating. I don’t see anything happening,” said Coleman of the operation which has sat idle for going on six years.

Sun Wave, in a complicated series of transactions, completed its purchase of both the mill and the land out of bankruptcy last year.

A substantial amount of wood used to be tied to the mill but it is now in the hands of a Tsimshian-owned company.

The mill was once part of the Skeena Cellulose network in the northwest. Along with the Terrace Lumber Company mill in Terrace, now being torn apart, the Carnaby mill in the Hazeltons, which has already been dismantled, and a mill in Smithers, the network was once an economic powerhouse.

Sun Wave sold the one remaining forest licence in the Kitwanga area last year to the Gitxsan and a mountain of chips at the idle Rupert mill to pulp and paper maker Pope and Talbot at Nanaimo.

Coleman thinks Sun Wave is embroiled in a network of administration and bureaucracy.
“They’re not even talking about money. They’re not as active as I’d like them to be,” he said.
But the minister is offering a bit of hope to the struggling northwest forest industry by asking his senior people to come up with ideas to get people back to work.

It could take the form of building logging roads to forest stands or other measures, said Coleman.

“Whatever the opportunity, it has to fit in with our fiscal plan,” he said of his ministry spending goals for the new fiscal year beginning April 1.

At the same time, Coleman has extended the ability of companies to export whole raw logs.
It’s been a traditional way for governments to provide some sort of economic gain for forest companies.

That kind of boost is even more critical for this area because the mixture of low value pulp logs versus high value saw logs is heavily weighted to the former.

It means loggers want to earn as much as they can by selling saw logs in order to balance off low returns by selling pulp.

Coleman has also seized on the emerging bio-energy market as one use for low value wood.
He points to the new Houston Pellet operation in Houston which is soon to start exporting pellets to Europe from the Prince Rupert port.

“I’ve been encouraging my people and other people to think out of the box,” said Coleman.
He also thinks there might be potential to burn wood in this province to create electricity and anticipates some proposals to emerge when B.C. Hydro begins asking for suggestions later this year.

© Copyright 2007 Terrace Standard

Still waiting for an answer!

The on going saga of Watson Island continues to keep the city in suspense, as Sun Wave Forest Products let a deadline of reply slip by without any correspondence.

City Council had forwarded a letter to Sun Wave asking about their intentions for the mill, which Sun Wave purchased last summer, with little to no activity taking place on the mill site, many in Rupert are fearful that the pulp mill may never open again, bringing to a close the longest running story in recent Rupert history.

The Daily News provided an update from the city side of the debate in Monday’s paper.

CITY STILL SEEKING ANSWERS FROM MILL’S NEW OWNERS
Councillors press company about its long-term plans
The Daily News
Monday, February 19, 2007
Page three

The city is continuing to shake its finger at Sun Wave Forest Products over their apparent failure to do anything with the Watson Island Pulp Mill.

At last week’s council meeting, Coun. Sheila Gordon Payne noted the deadline the city had given Sun Wave to reply to their most recent letter had passed.

Coun. Tony Briglio added: “I think we had discussed at some point having our solicitor send a letter and I am wondering if that has happened and if not, had we ought to send a strongly-worded letter suggesting what options we might have as a community if they don’t follow through with any indication that they are doing anything out there with respect to that site.”

City administrator Gord Howie said they haven’t received any correspondence from Sun Wave since their most recent letter.

He noted the city’s solicitor had been helping him craft previous letters and he will return to the solicitor for advice going forward.

There has been little-to-no news out of the company since they acquired the Watson Island Pulp Mill last summer.

Sun Wave is the B. C. arm of the China Paper Group, a large state-owned Chinese company with more than half a dozen paper mills overseas.

The city gave Sun Wave a five year break on taxes in exchange for an agreement to operate the pulp mill, however since the purchase, the company has said it is having trouble getting operating funds from overseas into Canada.

Shaking the Sun Wave tree

The mayor and council of Prince Rupert are beginning to worry a bit about the intentions of the owners of the Watson Island location of the old Skeena pulp mill operations.

It was back in May of 2006 that the hope of a rebirth of the Watson Island Mill was floated once again a period of time when it was suggested that things were moving forward, all be it slowly on the long running story of Skeena.

However, as 2006 turned into 2007 and with little indication of a start up being shown on the Island, there are concerns that Sun Wave is dragging their feet too long when it comes to putting that location back into operation.

Having given a tax holiday to Sun Wave on their investment, council is looking for a little good faith that there is an actual operational plan in place to re-start the mill. To that end, they have already sent the company one letter reminding them that the 30 year tax deal hinges on the pulp mill being in operation by 2008. That deal exempts the company from taxes for the first five years, as long as the mill is in operation and has hired local workers.

In a front page article in Thursday’s Daily News, there seems to be a bit of deflection towards the long since departed Victor Kumar, the former city administrator who as the story is presented, “pitched the deal” to the city. An interpretation which while it may be technically correct, should not absolve the council of the day from their share of responsibility on the issue. The last time we noticed, the city administrator didn’t have a vote on council issues. It seems we've come a long way from having China Paper on the hook, yet we can't seem to reel in that line.

The situation at Watson Island could become even more clouded considering the recent moves by Pope and Talbot of Nanaimo to secure a fibre supply from the Northwest, the traditional supply grounds of a mill in Prince Rupert. The Vancouver Island pulp company has been busy making plans to purchase a steady supply of chips from the Hazeltons, load them through the Skeena and then ship them by barge to their Nanaimo operation.

If the Nanaimo operator locks up that supply of chips, will there be enough supply left in the Northwest to make an operation at Skeena viable? That’s something that hasn’t been fully explained since the Pope and Talbot operation has been working the Northwest in quest of fibre. It’s said that Sun Wave has their own fibre arrangements in place as well a labour agreement (for whatever labour force may be left in town), which is all well and good, but rather meaningless if there is no active intent to actually operate the mill.

The City has it goes, “asked some pointed questions about the start-up and they have not received any response.” Some might suggest that those pointed questions might have been better asked as the deal was being put in place. The next step in the process could very well be another letter, this time “a strongly worded one” asking where they are on their development plan.

Hopefully the City can squeeze an answer or two out of the would-be mill operators, bringing some kind of closure one way or another to this most torturous of Podunkian soap operas.

The Daily news featured the latest developments (or lack of them) on the front page of Thursday’s paper.

CITY PRODS SUN WAVE TO HURRY UP WITH MILL PLANS
Councillors asking tough questions after apparent lack of action on restart
By Leanne Ritchie
The Daily News
Thursday, January 11, 2007
Pages one and three

After giving Sun Wave Forest Products a free ride on taxes, city council wants to know if the company ever plans to start up the pulp mill.

“There were concessions that council made very specifically to Sun Wave for the restarting of the pulp mill,” said Prince Rupert Mayor Herb Pond.

“Everything we did was contingent on a restarted pulp mill with a single objective of creating employment sooner rather than later in our community. Just like many members of the community, council has become concerned about the lack of any real signs that show that, leading to the restarting of the mill.”

Council has already sent the company one letter reminding it that the tax deal is contingent on an operating pulp mill by 2008.

“It’s just a matter of grave concern to council and something that needs to be kept a close watch on.”

The city signed a 30 year tax agreement with Sun Wave Forest Products in 2005. The agreement exempts the company from taxes for the first five years, provided the mill is in “continuous operation,” and employs local people.

While Sun Wave won’t pay taxes between 2005 and 2010, the city and company are supposed to have an economic development agreement under which they will have to sit down together before Oct. 31 each year to discuss the company’s progress and the company and city will come up with a n agreement on how the company “will enhance city amenities.”

This has not yet happened.

For the remaining 20 years, the tax contributions turn into tax dollars plus additional dollars based on the Consumer Price Index fluctuations, production levels and the price of pulp.

Former city administrator Victor Kumar pitched the deal by stating that Sun Wave was making a $100 million plus investment in order to get the pulp mill up and running and in order to recover its investment, it could not afford to pay the million dollar tax bill during the early years.

At least one other major company in town, Prince Rupert Grain opposed the deal.

Coun. Tony Briglio said council of late has begun to ask some pointed questions about the start-up and they have not received any responses.

“I think a strongly-worded letter ought to be forwarded on to the Sun Wave Group asking them where are they at, because there has been no significant move that would really give anyone hope to believe that this thing is going to get started in the 2007 year,” he said.

Pond added the concessions that council gave to Sun Wave gives council every right to be involved.

“Quite frankly, council would have no role out there if that owner was paying normal taxes under normal rates,” he said. Once finally adopted. It also has to be approved by the provincial cabinet.

Sun Wave completed its purchase of the Watson Island pulp mill last June but since then no visible steps have been taken toward a start-up, despite the fact the company has fibre agreements and labour agreements already in place.




(photo above from the Prince Rupert Library website)

“and it was pretty close to a guarantee that the mill will open…”

With wood chips heading south, a loading facility being constructed at the pulp mill site and forest licenses changing hands, the optics might not seem too good for a fast revival of the Skeena Cellulose pulp mill.

Yet one of the principles in the recent sale of harvesting rights in the Hazletons suggests that the impression he received at a recent meeting with Sun Wave Forest Products, was that the Watson Island site may be back in operation by the spring.

Gordon Sebastian of the Gitxsan Chief’s Office in the Hazeltons provided that bulletin board quote that those still holding out hope that the Mill will once again swing back into production.

“We met with them and it was pretty close to a guarantee that the mill will open,” he said, adding that China Paper has set an April 2007 date for the event.

Which would be welcome news for the hard hit local economy, however, it may be a tad optimistic at best, as we head into January there would not doubt be quite a lot of work required to bring the mill back up to standard after it’s lengthy shut down.

One hopes his intuition is correct, but many will be waiting for more tangible proof to bank on.

The entire story of the license changeover is provided in this weeks edition of the Northern View.



Gitxsan buy license to sell wood to Sun Wave

By Black Press
Dec 13 2006

A First Nations-owned logging company says it’s content to sell wood to a Vancouver Island pulp operation for now, but what it really wants to do is sell that wood to the Chinese company that wants to re-open the closed Prince Rupert pulp mill.
'
Gordon Sebastian of the Gitxsan Chief’s Office in the Hazeltons made the comment leading up to the purchase last week of a forest licence in the Hazeltons from the same Chinese company Sun Wave Forest Products, which is owned by the China Paper Group. Newly-formed Gitxsan Forest Enterprises made a $250,000 down payment to Sun Wave December 9, representing part of the total $1 million purchase price. Harvesting rights amount to approximately 390,000 cubic metres of timber annually.

Sebastian said a re-opening of the former Skeena Cellulose pulp mill in Prince Rupert will boost the area’s economy.

“We met with them and it was pretty close to a guarantee that the mill will open,” he said, adding that China Paper has set an April 2007 date for the event.

“It is a local pulp mill and will put local people back to work,” said Sebastian of the mill.
He said the Gitxsan have established a strong relationship with the Chinese which began when they bought the licence as part of their purchase of former Skeena Cellulose assets.
“They made it clear they didn’t want to be in the logging business and that they simply wanted to buy the fibre,” Sebastian added.

That brought about an examination of the forest licence potential and liabilities by the Gitxsan beginning in the early summer. Sebastian said the licence purchase also represents an assertion by the Gitxsan of control over resource use on their traditional territories.
Several calls to Sun Wave Forest Products were not returned.

Chip trucks to return to Prince Rupert!

The highway between Terrace and Rupert will soon be full of chip trucks again, as Northwest chips to be milled at the old Carnaby site in the Hazeltons; will soon be heading west to be shipped south to the Pope and Talbot operation on Vancouver Island.

The Skeena Cellulose site at Watson Island will be the loading zone, as barges will arrive alongside the dock there and loaded up with the chips from the Hazletons to be shipped south to the Harmac mill in Nanaimo.

The move by Pope and Talbot is seen as one of consolidating its hold on some of the fibre of the northwest, as they struggle to find new sources of wood to keep the Harmac operation going strong. With recent closures of sawmills on the island the Harmac mill has had to travel further and further in recent months to find a reliable supply.

They have signed a long term arrangement with Sun Wave the owners of the Watson Island site, and have invested hundreds of thousands of dollars to set up their shipment point there. They also purchased the mountain of chips that has sat there since 2001, for use in their mills.

The moves will leave many in the local area wondering if there is a plan to operate the pulp mill here as a going concern by Sun Wave, or if instead it will just become the shipment point of the Northwests resources out of the area. If the fibre supply is controlled by another company and they’re using your dock to ship the product away, questions will arise as to what the status is of the operational plan that at one time suggested a spring re-opening of the mothballed pulp mill.
The Terrace Standard has all the details on the Pope and Talbot plans on line.

NORTHWESTERN FIBRE HEADING DOWN SOUTH
The Terrace Standard
December 13, 2006

A MAJOR pulp producer is ramping up its northwestern presence using portions of former Skeena Cellulose facilities now owned by a Chinese company.

Pope and Talbot already ships out approximately 200,000 cubic metres of chips a year from the northwest to its Harmac kraft mill at Nanaimo on Vancouver Island but calculates it can double that by putting in a whole log chipper in the Hazeltons.

That chipper is on the former Skeena Cellulose Carnaby sawmill site, now owned by a company that’s part of the China Paper Group.

In turn the chips will be trucked to Prince Rupert and loaded on to barges at the long-closed Skeena Cellulose pulp mill location now owned by Sun Wave Forest Products which is also part of China Paper Group.

And, Pope and Talbot officials expect a good portion of the fibre to come from forest lands in the Hazeltons which used to be controlled by Skeena Celluolose.

That fibre is held under the Carnaby forest licence Sun Wave acquired when it bought Skeena Cellulose assets but it was sold over the weekend to a company controlled by Gitxsan hereditary chiefs on whose land the licence is located.

Transporting chips from the northwest down to Nanaimo is expensive but Pope and Talbot doesn’t have much choice, says company official Mike Hovey who is in charge of buying fibre for Harmac and for its other B.C. pulp mill in Mackenzie.

Reeling off a list of sawmill closures and company consolidations on Vancouver Island, Hovey said Pope and Talbot needs to go farther afield to buy fibre.

“We’ve seen all those chips lost to us,” he said of closures and consolidations.

But Hovey is also staking out territory in anticipation of the eventual end of the bug wood logging now going on throughout the interior.

Logging has acclerated in the interior to cut wood before the mountain pine beetle infestatation makes it worthless. But that will lead to shortages when the bug kill wood is eventually logged out.

That’ll make this region’s forest lands a hot commodity and Pope and Talbot wants to have an established presence, he said.

“We believe there’ll be some challenges in the interior,” Hovey added.

Pope and Talbot is renting the land for the whole log chipping operation at Carnaby but the chipper itself belongs to another company.

Hovey said Pope and Talbot will buy as much wood as can be taken to the site.
“What we’re doing is recyling,” he said of the purchase of chips to be turned into pulp. “We’re really the original recyclers.”

Sawlog portions will more than likely end up at nearby Kitwanga Lumber Company.

Pope and Talbot is also investing hundreds of thousands of dollars in putting together a facility for loading barges at the old pulp mill location in Prince Rupert.

“We have a long term agreement to use that location,” said Hovey.

The company used to barge chips from the Alcan docks in Kitimat but that arrangement subsequently fell through.

Pope and Talbot has also purchased the mountain of chips that have sat at the Prince Rupert pulp mill location since operations shut down in 2001.

Hovey added that while costs are high, he’s been impressed with the efforts being made by the people and companies Pope and Talbot is doing business with in the northwest.

“There’s some smart, competent people up there,” said Hovey.

He said it’s important to realize that people are now working and more will be going to work because of what Pope and Talbot is doing. “This wood would not otherwise be moved,” said Hovey.

“The wood I’m hoping to bring down in nine years out of 10, wouldn’t be moved out.”
Hovey said Pope and Talbot is, for now, benefitting from a strong pulp market and expects that to continue into the next year.

Pope and Talbot used to buy chips from the Terrace Lumber Company but that ended when the mill closed down.

Sun Wave sells a forest

Sun Wave Forest Products has pocketed 1 million dollars as the owners of Prince Rupert’s mothballed pulp and paper mill sold the forest licence to Gitxsan Forest Enterprises.

The Gitxsan acquire a large portion of their traditional territory from the Chinese owners of the pulp mill and the plan is to be in the woods in the next three weeks cutting trees.

Sun Wave which says they still plan to operate the pulp mill by the Spring of 2007, but that they have no interest in harvesting the timber themselves. Though to the casual observer in Prince Rupert, there doesn’t seem to be much happening on Watson Island at the moment to suggest a spring opening. Sun Wave has until the first week of 2008 to be up and running in order to live up to the terms of a tax exemption deal they negotiated with the City of Prince Rupert.

The Daily News had the details on the forest sell to the Gitxsan on the front page of the Monday edition of the paper.

SUN WAVE SELLS OFF FOREST LICENCE
By James Vassallo
The Daily News
Monday, December 11, 2006
Page one

The Gitxsan have acquired a large chunk of their traditional territory from the owners of Prince Rupert’s pulp mill.

Gitxsan Forest Enterprises (GFE) will pay Sun Wave Forest Products $1 million to acquire the harvest right to 390,000 cubic metres per year in the Kispiox Timber Supply Area.

“The deal moves us towards our goal of achieving control of activities on our traditional territories,” said Gordon Sebastian. Gitxsan Treaty Office executive director. “It’s what we spent 20 years fighting for in the courts in the Delgamuukw case. This time we’re approaching it from another angle, from an economic angle.”

Discussions for the forest licence began almost immediately after Sun Wave announced they had acquired the remnants of New Skeena Forest Products. On July 18, Sun Wave handed over all of the information on the forest licence to Gitxsan Forest Enterprises to help the company get a complete picture of the rights and obligations associated with the tenure. The sale follows many months of research by the Gitxsan on assets and liabilities associated with the licence including silviculture commitments, logging road obligations and cutting permit information.

“The time to do this deal was now,” said Myrtle Muldoe, GFE president. “We should be cutting trees within two to three weeks.

“It will be good for everyone, living within our traditional territories – Gitxsan and non-Gitxsan alike.”

The Gitxsan say they have been informed by Sun Wave that while the company is interested in operating the Watson Island pulp mill, it has not interest in harvesting timber itself. In July, the company said it is expected the deal will generate 300 jobs in the bush, trucking, silviculture activities and in tenure management.

GFE is controlled by the hereditary chiefs of the Gitxsan, while Sun Wave is a subsidiary of the China Paper Group; China Paper owns nine paper and three pulp mills in China. In 2005, through Sun Wave, they purchased the assets of New Skeena Forest Products, including the pulp mill in Rupert, sawmills in the Northwest and forest tenure for $3.5 million. Sebastian said the president of China Paper met with Gitxsan hereditary chiefs a month ago and told the group that plans were in place to open the Prince Rupert pulp mill in the spring of 2007, In order to keep a tax exemption deal with the city, the company must produce pulp by the first week of 2008.

A public signing ceremony was held Saturday, where an initial payment of $250,000 was handed over for the land.

Sun Wave still hopes for a sunrise on former Skeena mill

The owners of the all but deserted pulp mill on Watson Island were in town this week, here for meetings with local officials and regaling them with a tale of interest in, but little hard fact in a timeline for re-opening the long closed operation.

With 2008 a deadline for the tax exemption status on the property, the owners were reminded that if they would be required to be producing pulp by the first week of 2008 for the agreement to stay in effect.

Details of the visit to the city and the state of operations (or lack of) at Watson Island were provided in Wednesday’s edition of the Daily News.

MILL START UP STILL ON HORIZON AS OWNERS VISIT SITE
By Leanne Ritchie
The Daily News
Wednesday, November 8, 2006
Pages one, three and five

Sun Wave Forest Products executives were in town this week for meetings. However, there appears to be no developments in the near future for the Watson Island Pulp mill.

“They said they are still trying to get their money and go forward and 2007 is still the time they hope to open,” said Port Edward Mayor Dave MacDonald.

“Other than that there was not much of an update – except they are continuing to try and get it started.”

Ni Ri Tao, director of the China Paper Group, was in town yesterday along with Susanna Xu, CEO of CRG Investments, the Canadian company representing the China Paper Group and Sun Wave Products. They moved on to Terrace today and will go to Vancouver for more meetings later this week.

The company purchase the mill earlier this year from the assets of New Skeena Forest Products, however Sun Wave is yet to get financing from the Chinese government to open the operation.

“They are continuing to work for all of the approvals that we need from China,” said Mayor Herb Pond.

“Obviously, the emerging scenario with changing pulp markets, changing supply, the bankruptcy of the Terrace Lumber Company and all of those factors need to be taken in to recalibrate the business model.

“(But) they are continuing to work on the premise that they will be producing pulp and that’s very much the discussion that we’re having – what’s to be done to hurry that process on.”

The clock is ticking on the tax agreements made between the city and the company. The city agreed to forego $2 million of potential taxes annually on the Watson Island site in exchange for the company opening the pulp mill in Prince Rupert.

The city recently sent the company a letter reminding Sun Wave that the tax exemption status is contingent on the company producing pulp by the first week of 2008.

“Very clearly, the community as well as PPWC and First Nations have made significant efforts to get economic activities going out at the mill,” said Pond. “We wanted to just identify that the clock is ticking and that there are some natural timelines that will require activity rather quickly if those deadlines are to be met.

“We wanted to make sure they’re still proceeding, that they will see it as a possibility… (and) it certainly appears they’re planning to operate a pulp mill.”

Port Edward also has a tax deal with the company that is contingent upon the company producing pulp at the facility.

However, compared to some of the historical delays, this one has been relatively short. Sun Wave completed its purchase of the land in June of this year, only five months ago, while the mill was sin the hands of New Skeena Forest Products for two years and eight months before the company declared bankruptcy in September 2004.

Prior to New Skeen Forest Products, the Watson Island pulp mill was part of Skeena Cellulose, which was sold by the province in January 2002.

While Sun Wave continues to seek start up financing, prices of Northern Bleached Softwood Kraft (NSBK) pulp, the type produced by the Watson Island facility have only gone upwards.

According to Economic Development Canada, prices have risen from $668 U. S. per dried metric tonne to $719 in October of this year. The $20 price increase in October pushed the prices to near record highs and prices are up 21 per cent year over year.