Ann: Trading Halt , page-7

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GUNNS' Tasmanian pulp mill project has been cleared to proceed by the state's Environmental Protection Agency.

There had been doubt about whether the state permit for the construction and operation of the $2.3 billion project was still legally valid two years after its issuing.

Under the permit, Gunns had until August 30 this year to complete "substantial commencement" of the project or have the approval lapse.

Anti-mill groups had argued that without construction underway by August 30, the permit had lapsed, while Gunns argued $200m spent on readying the project amounted to "substantial commencement".

After considering a submission from Gunns and solicitor-general legal advice, EPA director Alex Schaap announced his belief that Gunns had done enough to keep the permit alive.

"I have reached the view that substantial commencement has occurred," Mr Shaap said.

"I do not, therefore, feel obliged to seek an order or declaration from a court on the question.

"I will continue to regulate the site on the basis that a valid permit exists unless a court determines otherwise."

Gunns says it has been in discussion with several prospective joint venture partners to enable a start on construction.