A small town in central Newfoundland stands to gain big if a proposed timber deal for the wood once owned by Abitibi-Bowater goes through for a California company.

Rentech, a California-based fertilizer company, is vying for the ownership rights of the 280,000 cubic metres of wood that once belonged to former newsprint producer Abitibi-Bowater, which shut down its Grand Falls-Windsor mill in early 2009.

If the company won the rights, Botwood would serve as a shipping point, and a wood pellet plant could also be built in the town.

Botwood Mayor Jerry Dean says this kind of industry would be a big boost for the community.

Jerry Dean

Botwood Mayor Jerry Dean says Rentech's business would have a huge impact on his community, turning the economic decline of recent years around. (CBC)

Old infrastructure in the community that was there during the Abitibi days would serve as a good site for a pellet plant, the mayor said.

"This needs some retrofitting, obviously, for any kind of possible venture such as pellet production and stuff, [but] I know when we last met with people from Rentech, they were really impressed with the facility," Dean said.

Dean said the deal could help put a stop to years of economic decline in his town.

"We've got an aging population, not only in Botwood, but in the region, and we need something like this so some of the younger families got reasons to stay," he said.

Town abuzz with rumours

Rumours of the possible deal have the town buzzing with speculation — and hope.

"There hasn't been a whole lot around here for the last couple years, so if we can get something on the go here, I'm sure it would be great for the town," said resident Michael Dalley.

Central Newfoundland wouldn't be the only part of the province to benefit from the deal, either.

According to Natural Resources Minister Derrick Dalley, Rentech would also buy, ship and re-sell pellets from the idled Roddickton plant.

There's no date expected for when this could all take place, but Dalley said he hopes to sign a final agreement soon.

In November, Rentech purchased an idled mill in Wawa, Ont. to convert into a pellet production facility. It has yet to produce pellets, but said it has customers.