October 26, 2005
(Executive Council)
(Natural Resources)

Government reaches framework of an agreement with Abitibi

Premier Danny Williams and Ed Byrne, Minister of Natural Resources, announced today that government has reached a framework of an agreement with Abitibi Consolidated Inc. (ACI) which should see the continued operation of the mill in Stephenville.

�Through the continuous effort and intensive negotiations by our government, Abitibi has reversed its decision to close the mill in Stephenville. We believe the framework addresses the challenges being faced by the Stephenville mill. The company will continue to work out issues with its union and government fully supports the rights of these workers,� said Premier Williams. �This is a significant achievement for government, for the company and, more particularly, for the employees and the people of the Stephenville-Bay St. George region.�

The highlights of the framework of the agreement are:

  • The initial term is for a period of three years during which time government and/or Newfoundland and Labrador Hydro will provide assistance of $10 million annually to ACI.
  • During the initial term, ACI commits to maintaining current production levels at the Stephenville mill and at no point can close the mill.
  • ACI commits to investing in a new boiler in Stephenville at a cost of up to at least $13 million by December 31, 2006.
  • Subsequent to the first three years, government and ACI have agreed there will be four renewals of the arrangement for a period of three years in each instance for a total of 12 years as long as the Stephenville mill continues to operate at current production levels.
  • ACI has agreed to renew its Interruptible B contract with Newfoundland and Labrador Hydro at no cost to Hydro during the initial term of the agreement and the first two years of the first renewal term.
  • Government and ACI confirm their strong commitment to seeking achievement of a long-term hydro supply solution for the Stephenville mill in conjunction with Hydro.

�The challenges at the Stephenville mill are unique to this operation and our objective in our negotiations with Abitibi was to find a way that was fair and reasonable to address those challenges and maintain this mill,� said Minister Byrne. �This certainly reflects our objective and our efforts will continue on finding a long-term energy solution.�

�The reversal of Abitibi�s decision is encouraging news for the Bay St.George region,� said Joan Burke, MHA for St. George�s-Stephenville East, and Minister of Human Resources, Labour and Employment. �This mill is one of the main economic drivers for our area and this announcement today is a positive step forward for the mill employees, their families, area businesses and the entire community.�

Port au Port MHA Jim Hodder said: �I am also very pleased to see that a framework for an agreement has been reached and the people of our area can move forward with a sense of optimism.�

Media contact:
  Elizabeth Matthews, Office of the Premier, (709) 729-3960, (709) 690-5500,
  Carmel Turpin, Natural Resources, (709) 729-5282, (709) 685-4624
  Jacquelyn Howard, Human Resources, Labour and Employment, (709) 729-4062, (709) 689-2624

2005 10 26                               1:15 p.m.

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