Gunns' rejection of compensation offer for logging rights to 210,000 m3 of native Tasmanian forest could kill historic AU$276M forest peace deal

LOS ANGELES , September 6, 2011 () – Timber company Gunns Ltd. said Monday it would not accept compensation offered to give up rights to more than 210,000 m3 per year of native forest logs in Tasmania, effectively killing Australia's AU$276 million (US$289.8 million) intergovernmental agreement (IGA), The Australian reported Sept. 6.

The federal government had left the negotiations with Gunns to the Tasmanian government, but is now stepping in to rescue the state's forest peace pact.

Tasmania's Deputy Premier Bryan Green said Monday that both governments were working to salvage the IGA and he believes it can be saved, but said the state would not up its compensation offer, The Australian reported.

Tasmanian Premier Lara Giddings gave Gunns a deadline of last Friday to respond to a compensation offer believed to total less than AU$15 million. Gunns had said earlier it hoped for up to AU$100 million.

Launceston, Tasmania-based Gunns missed the deadline but remains willing to talk, said a company spokesperson, The Australian reported.

The company could choose to sell rather than give up its contract rights to logging of native forests.

Without Gunns' approval of the IGA, sale and reopening of the company's shuttered Triabunna sawmill is on hold.

The primary source of this article is The Australian, Sydney, Australia, on Sept. 6, 2011.

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