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N.L. government enters agreement to buy power from Corner Brook paper mill

Corner Brook Pulp & Paper, owned by Montreal-based company Kruger, has put in a request to harvest wood near the town's water supply.  (Colleen Connors/CBC - image credit)
Corner Brook Pulp & Paper, owned by Montreal-based company Kruger, has put in a request to harvest wood near the town's water supply. (Colleen Connors/CBC - image credit)
Corner Brook Pulp & Paper, owned by Montreal-based company Kruger, has put in a request to harvest wood near the town's water supply.
Corner Brook Pulp & Paper, owned by Montreal-based company Kruger, has put in a request to harvest wood near the town's water supply.

The Newfoundland and Labrador government announced Friday it has entered into an agreement to buy power from the Corner Brook Pulp and Paper Mill. (Colleen Connors/CBC)

The Newfoundland and Labrador government has announced an agreement to purchase additional power from Corner Brook Pulp and Paper, which it hopes can stabilize the struggling newsprint mill.

According to a news release, the six-month agreement will include Newfoundland and Labrador Hydro buying excess energy produced at the Deer Lake hydroelectric station, one of the mill's assets. The purchase of power won't effect power rates for residents, the release added, as the electricity will come from an existing source.

In turn, the news release says the mill will explore new revenue sources involving "wood-based bioproducts projects."

Wood-based bioproducts can include things like cellulose used in products like textiles, concrete, biofuels and wood pellets.

The deal also comes with a commitment from the mill to sell saw logs to other mills, which the government news release called "essential for the stability of the forest sector."

The mill, owned by Kruger Inc. and which employs about 300 people, has faced challenges in the 2020s as the newspaper industry continues to change and evolve.

It closed for seven days in November and went through a similar situation in 2019 when it closed for two weeks at Christmas due to a weak market for the product.

Corner Brook Pulp and Paper received a $110-million loan from the province in 2014, but CBC News learned in November that it owed over $117 million as payments weren't made and interest accumulated.

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