Owner of Northwest Territories' only commercial sawmill, Patterson Sawmill, says it will close within two years unless biomass, wood pellet development provides market for waste wood

LOS ANGELES , January 4, 2012 () – The president of Patterson Sawmill, which is reported to be the Northwest Territories' only commercial sawmill, says the region's forest industry will die if a market for the mill's waste wood is not developed within two years.

Daniel Patterson says his sawmill is unable to operate due to overdue stumpage fees owed to the territorial government. He says he has asked for an abatement of the fees and a two-year extension to allow time for an alternative energy development, the Northern News Services reported.

Patterson said that if a pellet mill or some way to use biomass did not develop, and there was nothing on the horizon in two years, then he truly believed the forest industry would be dead in the territories.

The plight of the sawmill, located about 20 km south of Hay River, was recently brought to the legislature's attention by Hay River South MLA Jane Groenewegen. She said the community was in the middle of a forest and it was extremely important to keep it operational. "They’re the only business of this type in the Northwest Territories," she added.

Minister of Environment and Natural Resources Michael Miltenberger said he had worked with the sawmill in recent years to help keep it running, offering deferred and reduced payments and other measures.

Patterson would not say how much was owed in stumpage fees, but noted that the company was able to pay fees of about C$8.75/m until the miill's supply in Cameron Hills was halved about 10 years ago due to land claims issues.

The mill has since operated on 5,000 m3/year, but Patterson said the cost of doing business had increased while the mill was stuck at that volume. Falling timber prices and high freight costs incurred by shipping production to the mill's market in Edmonton have added to the company's difficulties.

Patterson said he could not maintain the business on 5,000 m3, and noted that the mill has no market for its waste wood. He said the mill would have to close unless a market for its waste wood could be developed.

Groenewegen has indicated that she has met with a  Hay River businessman who hopes to establish a pellet and briquette mill in Hay River.

The primary source of this article is the Northern News Services, Yellowknife, Northwest Territories, on Jan. 2, 2012.

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