Nfld. & Labrador

Verbal deal on sawmill, biofuel plant 'kick in the arse' for Botwood economy

For the first time since 2009, Botwood may be getting the industrial "kick in the arse" it has been looking for, says Mayor Scott Sceviour, as the town enters a verbal deal to bring jobs to the region.
After failing to strike a deal with Rentech in 2014, Botwood may be on the verge of striking a new deal to bring life back to the town's waterfront.

A verbal agreement has been reached between the Town of Botwood and an unnamed partner, or partners, to bring major industry back to the shipping town.

Botwood Mayor Scott Sceviour confirmed the agreement to CBC earlier this week, but would not say who the town was dealing with.

The venture would include a sawmill and biofuel plant and utilize the town's waterfront.

While the scale of the operation and number of potential jobs is unknown, the mayor indicated it could change the scenery of a town that has been reeling since the departure of AbitibiBowater in 2009.

"This could be the kick in the arse the region has been looking for for a long time," Sceviour said.

While a verbal agreement is in place with the town, no deal has been reached yet with the province for the 280,000 cubic metres of timber rights formerly handled by AbitibiBowater. The province acquired the rights following the departure of the pulp and paper magnate.

Botwood was hit hard by the closure of its shipping port in 2009 when the AbitibiBowater pulp and paper mill closed in Grand Falls-Windsor. Since then, the town has been looking for a new way to create jobs. (CBC)

In 2014, a California-based company, Rentech, was close to acquiring the rights to the timber stand from the province with hopes of building a wood pellet processing plant in Botwood. Those plans did not materialize.

Christopher Mitchelmore, Minister of Business, Culture, Tourism and Rural Development, confirmed talks for the rights have taken place again.

"Discussions are currently ongoing with companies regarding forestry resources in central Newfoundland. These negotiations take time to ensure due diligence is given. Government will be in a position to provide a further update at a later date."

Tennessee connection

Mitchelmore also confirmed an "informal" visit to a biofuel plant in Tennessee during the Southeastern United States-Canadian Provinces Alliance meetings in Nashville, May 26-28.

While officials were mum on the investors involved, a source close to the negotiations did name Jeff Penney as a partner at the table.

Penney, a Corner Brook resident, is listed as president of ABEL Innovations and head of NewGreen Inc., a company dealing with green and sustainable energy. Calls to Penney have not been returned.

The proposed biofuel facility would produce a form of diesel using technology from Proton Power, a company based in Knoxville, TN. The process burns biomass, such as wood fibres, to produce hydrogen, which can then be turned into biodiesel.

Proton Power applied for its first patent in 2008 and started its first major project in 2011, supplying a sustainable fuel system for an American sausage factory.

In 2013, Proton Power acquired a 48,000 square-foot plant on 83 acres of land in Rockwell, TN. The site is scheduled to go online this year and produce 7.2 million gallons of renewable biodiesel per year.

Proton Power's CEO, Dr. Sam Weaver, confirmed he'd been in talks with people in Newfoundland and had visitors to his plant. Weaver wouldn't speak to the scale of the operation, but said his company doesn't deal in small projects, saying, "We build, you know, serious stuff."

Weaver said the company has dealt only with private industry to this point, holding $1.5 billion in signed contracts.

"We kept a pretty low profile," Weaver said. "It's been all commercial. There's no government funding in this (company) anywhere."

Cautiously optimistic

Sawmill operators in the area are waiting to see how the deal will impact their business.

It's nothing new for Kent Roberts, who has fielded offers relating to his Point Leamington sawmill for three years now.
Roberts has spoken with the parties involved, and said he stands to gain from selling his wood fibres, or possibly even his sawmill and timber rights. 

Still, he remains cautiously optimistic.

"It has potential," Roberts said. "I don't really believe anything until I see it, until there's a hole in the ground. But it has potential."