Contract Variation to Accommodate Pulp Mill Construction

Forestry Tasmania has agreed to a request from Gunns Limited for a variation to two long term wood supply agreements to provide for flexibility in the start of on-site construction work for the Bell Bay pulp mill.

Managing Director Bob Gordon said the contracts contained ‘conditions precedent’ that required both parties to agree in writing to a variation if construction had not commenced by June 30 2008.

Gunns has advised that for a range of reasons that were not foreseen when the contracts were executed in December, commencement of on-site works would most likely occur after 30 June 2008.

Mr Gordon said Forestry Tasmania and Gunns had agreed to vary the date for commencement of construction by five months to November 30 2008.

“I should emphasise that Gunns has advised that it still expects the mill to be operational before the end of 2010, as stated in the contracts.

“As far as Forestry Tasmania is concerned, the variations are minor and do not affect the functioning of the agreement."

Forestry Tasmania and Gunns signed the two contracts on December 20 2007. One contract was for 1.5m tonnes of pulpwood annually from plantation and regrowth forests for 20 years to supply the proposed mill.

The second contract was for 10 years for the supply of sawlog and other associated products.

“In line with the open and transparent approach adopted by Forestry Tasmanian and Gunns in relation to the wood supply agreements for the pulp mill, the variation to the contracts has been posted on the www.forestrytas.com.au web site,” said Mr Gordon.


David Tuck, Corporate Relations 6233 8249
ENDS
17 June 2008


Link - Wood supply Agreements