Bowater Mersey Mill shutting down

Resolute Forest Products says it is idling the mill in Brooklyn, Nova Scotia permanently.

The company made the announcement at a meeting with union executives Friday morning.

Kevin Evans, the president of Communications Energy and Paperworkers Local 141, saidthe news was not unexpected, but a big loss.

"I think probably most people reached a point of feeling it was a question of not if, but when the mill would close," he said. "This was probably much sooner than any of us expected. At least personally, I'm not shocked."

"We've worked with the employees and government to try and save the mill. The economic slowdown around the world has made the situation untenable,"the company's President Richard Garneau told CBC. "We really tried hard to find a way forward for this mill to operate, but we never expected overseas demand would go down by 25 per cent."

Newsprint production will end at 8 a.m. Saturday. The sawmill will continue for another three or four weeks, while woodland operations end Monday.

The company's Brooklyn power plant will continute to operate another three or four months. Resolute Forest Products said an international company has already expressed interest in the power plant.

The company said it has about 320 employees inside the mill. The decision will also affect woodland workers, sawmill employees and the Brooklyn Power Corporation.

Company considers leaving Nova Scotia

The release also said that Resolute Forest Products wants to sell its assets in the province. Those assets include private timberlands, the mill, the sawmill and Brooklyn Power.

"This mill, on the newsprint side, is not going to have a second life," said Garneau.

He estimated the value of its 500,000 acre land holdings at up to $120 million.

The announcement comes on the heels of the company admitting it was putting millions of dollars worth of upgrades at the facility on hold.

Resolute Forest Products was offered a $50 million rescue package in December to secure 2,000 jobs over the next five years.

Of the $50 million offered, $23.75 million wasused to purchase 10,117 hectares of landin five counties in western Nova Scotia.

The company spent$605,000 of the $1.5 million set aside to retain and trainworkers over a two year period, .

The remaining money offered was not used or has been returned to the province.

Half of that money was a forgivable loan to the firm in $5-million yearly portions.It was supposed to keep the mill's two paper machines operating and to help the company make energy-efficient improvements.

On Thursday, Premier Darrell Dextersaid that portion hasn't been spent yet.

With files from the CBC's Paul Withers and The Canadian Press.