Government disappointed in Abitibi decision

Ed Byrne, Minister of Natural Resources, said that the Government of Newfoundland and Labrador is disappointed with the announcement today of Abitibi Consolidated Inc. regarding the future of its operations in this province. Earlier today, Abitibi announced that it was moving forward with a reorganization plan of its Newfoundland and Labrador operations which would result in the eventual closure of one of the papermaking machines at Grand Falls-Windsor.

"Clearly, this decision of Abitibi is not welcomed by this government," said Minister Byrne. "It was our hope that following a year and a half of discussions with Abitibi and our government�s indication to the company that we would do everything reasonably within our power to ensure the future viability of the Stephenville and Grand Falls-Windsor mills, Abitibi�s decision today would have provided some certainty to its employees."

Furthermore, Minister Byrne reiterated that during these discussions with Abitibi, there was no indication that Abitibi was also taking a serious look at its operations in Grand Falls-Windsor until such time when the company announced early this year that it was undertaking operational reviews of both of its mills in Stephenville.

"We reminded Abitibi that there is legislation which was put into effect in 2002 that provides Abitibi with its timber licences until 2010 with the condition that it retain the operation of two papermaking machines in Grand Falls-Windsor," said Minister Byrne. "And, our message was clear that we intended to invoke that legislation should Abitibi make a decision to close one of those machines. That message was again sent to Abitibi when we met recently with its president and CEO, John Weaver, on April 14."

Minister Byrne said the statement issued today by Abitibi does not provide any information as to when the company intends to close one of the machines in Grand Falls-Windsor. He indicated he will be seeking some clarity on those timelines when he speaks with officials of Abitibi over the next day or so.

"What is very clear is the legislation which states that, in order for the company to continue to harvest wood on its government-issued timber licences, then it has to keep two machines going in Grand Falls-Windsor until 2010," said Minister Byrne. "We will uphold that legislation."

Media contact: Carmel Turpin, Communications, (709) 729-5282, (709) 685-4624

2005 04 27                             1:10 p.m.