THUNDER BAY – Earlier in the week, for Fort Frances, the news was bad. Today, Thunder Bay gets some more positive news from Resolute Forest Products (NYSE: RFP) (TSX: RFP). The company has announced plans to build an industrial wood pellet plant that will convert a currently underutilized residual material into a reliable source of renewable energy. Construction of the plant is expected to begin shortly and is scheduled for completion in 2014. The Company has signed a ten-year agreement to supply Ontario Power Generation with 45,000 metric tons of pellets annually.
The plant will be built adjacent to the Company’s sawmill in Thunder Bay, Ontario, creating approximately 24 new jobs when fully operational and improving the long-term viability of the sawmill and the approximately 350 jobs that it supports.
“Wood pellets are a clean, renewable energy source, and together with other biofuel opportunities, a natural diversification target for Resolute,” said Richard Garneau, President and Chief Executive Officer. “This project provides the opportunity to enhance the use of our existing asset base to produce biofuel for a strategic, committed consumer and allows the Company to gain valuable manufacturing experience in commercial biomass production.”
Resolute will invest approximately C$10 million in the construction of the plant, adding to the investments of approximately C$120 million the Company has announced for its Ontario operations since 2011.