Town officials in Fort Frances say negotiations between a US company and Resolute Forest Products for the sale of Resolute's idled Fort Frances kraft mill have broken off.

In a news release issued Friday, the town said Expera, a specialty paper business, had indicated "a strong interest" in buying the mill, restoring hundreds of jobs. The statement blamed the failure of negotiations on the fact that Resolute controls the cost of wood in the Fort Frances area, and that Expera Specialty Solutions needs to be able to acquire fibre at a reasonable cost.

The release said that for the past year, Fort Frances district municipalities and First Nations have lobbied the Ontario government for a model that would see all stakeholders participate in forest management decisions. It added that Minister of Natural Resources and Forestry Bill Mauro has indicated that that model needs to evolve over time.

The Town of Fort Frances statement said it understands ministerial orders can be enacted to re-allocate fibre.

Mauro told CBC News he's disappointed the talks have failed.  He said the province offered to secure the wood supply but that was just one of the sticking points. "The security of the fibre would not have been in question for them, but of course the price point was still something they would have had to negotiate on a business-to-business level," he said.

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Resolute Forest Product's pulp and paper mill in Fort Frances, Ont., has been completely shut down since last February. (Resolute Forest Products)

A spokesperson for Expera said in an e-mail to CBC News that the company does not comment on any potential business transaction it is participating in.

Resolute vice-president of communications Seth Kursman told CBC in an e-mail that the company "has made a significant effort to reposition the mill, exploring opportunities with multiple parties for a possible successor owner."

Kursman added that Resolute has also spent over $10 million keeping the mill heated for two winters in order to protect the assets.  His e-mail concluded "We will continue to consider options."