pulp mill hurdles

As a local I have watched goings on with Gunn's with interest and unfortunately often with disgust.

Here my opinions, given freely but probably overpriced.

Gunn's under Gay, Gray, McQuestin were part of what I would call the problem. An old boys club at best - Far worse according to many.

I suspect that Gunn's now, under shareholder influence and L'Estrange Management is a totally different beast. But still many don't fully recognise the change.

Rightly or wrongly we now have a copious amount of plantations growing. The MIS economics and cronyism that saw productive farmland and native forest converted to plantation should never be repeated but we also should not waste the resource that now exists.

I would have been on the picket line to stop the old Gunn's from building any Pulp Mill, but I'm willing to give the new Gunn's a lot more leeway. An appropriate sized mill fed by current plantations without the need to increase crop size and allowing for some declining replanting as productive farmland is reclaimed is sensible.

Some real stumbling blocks remain:
Convincing people that Gunn's has changed its spots and can be trusted to build a pulp mill that is in all stakeholders interests, especially as both sides of state politics don't have the moral authority to be considered regulating custodians on the public's behalf. Without going through what would be seen as a new legitimate state approval process this is going to be an ongoing issue and the Pulp Mill will continue to be a hostage of toxic political history.

The location is really dumb for a very large number of stakeholders; there are about 100K people live in the Valley. The inversion layer is real. Launceston air quality is crap during winter and sticking a Pulp Mill under there is just nuts. Consideration of Log Truck movements got bypassed with the fast track approval process but there is serious consideration needed on this point as well considering the population density and road infrastructure.

If they try to build it now, in earnest, in its current location I suspect there would still be immediate numbers in the range of 1-2K people (families with kids, small business owners little old ladies etc.- not just traditional greenies) who would be prepared to get arrested to stop it. No way can Tasmania's legal enfrocement system handle these sorts of numbers inconspicuously and the temporary systems would be under all sorts of national scrutiny, exposing all the weakness of the original political process that approved the mill and the lack of moral authority the state would have to prosecute. The society would split on political lines and the Pulp Mill would be the casualty of politics.

Get the political protesters out of the picture via a new approval process, get the local community protesters out of the way by moving it out from under a densely populated inversion layer and get the moderate environmental activist out of the way by building a plantation fed world class mill. Gunn's are addressing the last point but not yet the first two. I'm not sure if the Mill would be viable at Hampshire but it would be much more palatable to many people. Selling the Triabunna mill to Green interests, getting out of native forests and giving the old forestry clique the cold shoulder are all positive steps to get a social licence but without an approval seen as legitimate by the majority of Tasmanian they have their backs against the wall.

There's finally a glimmer of hope in the Tasmanian Forests. The demarcation of Green against Timber hid the reality that chipping had moved from by-product to the main game and in the process consumed sawmilling. If the Greens and Timber can work together then chipping can become the economical use of by-product that supports a truly sustainable sawmilling industry. Despite the mud that is thrown this is an outcome that the moderate majority aspire too.

Gunn's now is positioned to add value to the plantations in the ground. But location and political history still need to be dealt with. The future has to be separated from the past, enough has already been lost. For mine, I think Gunn's wants to be part of the future and I hope they survive. Until both finance and a social licence is obtained the risk to getting a pulp mill built is still large, although the share price probably reflects fair odds for those that are prepared to place a stake I'm not at this stage. The events that will de-risk the project and increase the share price are a financing announcement and a substantive start (post financing) without large scale national publicity protests. My approach will be to look at the investment proposition if we get to that stage knowing that I will be paying a higher price but for lower risk.