Newfoundland and Labrador may attempt to expropriate AbitibiBowater's hydro and timber rights in light of the company's announcement that it would close its Grand Falls-Windsor paper mill in March, the deputy premier said Thursday.

Kathy Dunderdale said if AbitibiBowater isn't going to operate a mill, it probably shouldn't get to keep existing power rights or nearby timber rights.

AbitibiBowater owns the Star Lake hydroelectric generating station, and sells some of the energy it produces to the Newfoundland and Labrador grid.

The government is seeking internal and external legal advice about whether or not they can strip those rights away from the company.

"We would exercise whatever options that were available to us even if it took us to the highest court in the land to retain the energy and the fibre associated with that mill," she said.

Dunderdale wouldn't offer a timeline for any decision involving its options, except to say that the government is working quickly.

Recovery Plan

In the meantime, Human Resources Minister Susan Sullivan said the province working on a recovery plan setting up a taskforce to diversify the local economy.

"To deal with the issues of how we can support not just the workers, but also the families of the workers. How we can transition them into other occupations. How we can find educational opportunities for them," she said.

The government said it would also explore the possibility of finding another operator for the mill, although Dunderdale says she isn't sure companies who've expressed interest in the past would still be interested given the current state of the economy.