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Equipment arrives for Gunns pulp mill -

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Equipment arrives for Gunns pulp mill

The World Today - Thursday, 23 April , 2009 12:50:00

Reporter: Felicity Ogilvie

PETER CAVE: The Tasmanian Timber company Gunns still doesn't have the money it needs to build its
pulp mill but it's already buying equipment. A cargo ship carrying some of that equipment arrived
at the mill site in Northern Tasmania today. Supporters say it's a sign the mill will soon be
built.

But Gunns still need final Federal approval and a financial analyst says that Gunns will struggle
to get the $2.2-billion it needs to get started.

Felicity Ogilvie reports from Hobart.

FELICITY OGILVIE: The cargo ship is sailing from Taiwan and will arrive at the Bell Bay port this
afternoon. The port is where Gunns has a woodchip pile and is also the site where the company wants
to build Australia's largest pulp mill.

Gunns isn't commenting on today's shipment but the company has already spent $126-million dollars
on the pulp mill project. The arrival of equipment to build the mill has excited Barry Chipman from
Timber Communities Australia.

BARRY CHIPMAN: It's a great boost to timber-dependent families and their communities right
throughout Tassie that the company has confidence that it can, you know, start to receive
equipment. It is absolutely great news that perhaps, you know, the first step to realising this
dream.

FELICITY OGILVIE: Anti-mill campaigners are preparing to meet the ship. But the Port Authourity has
set up a buffer zone around the ship and anyone who crosses the line will be fined a thousand
dollars. The fine isn't deterring The Wilderness Society's anti-pulp mill campaigner Paul Oosting.

PAUL OOSTING: The Wilderness Society is preparing to respond to the imminent arrival of a cargo
ship which we understand is carrying out a bio-energy facility which would be part of Gunns'
proposed pulp mill. That bio-energy facility is designed to burn Tasmania's native forests, locking
in the destruction of some of the richest sources of carbon on the face of the planet.

FELICITY OGILVIE: Gunns may have bought equipment but it still doesn't have the Federal approval it
needs to run the mill. The Federal Environment Minister Peter Garrett wants Gunns to prove the
effluent it'll pump into Bass Strait won't be harmful.

Gunns is also short on money. It's been almost a year since the ANZ bank refused to fund the
$2.2-billion pulp mill. Gunns is still searching for finance and a joint venture partner.

Financial analyst Tom Ellison is surprised that Gunns has already started buying equipment.

TOM ELLISON: I'd be very concerned if I was a shareholder that there was machinery arriving before
the company had the money to pay for it, before they had approvals, and even before they've
finalised little aspects like a water pipeline that they actually need to operate the mill. It
certainly seems to me to be putting the cart before the horse.

FELICITY OGILVIE: The Forest Industries Association of Tasmania supports the mill but can't say if
it'll ever be built. Julian Amos is the chief executive.

JULIAN AMOS: I can only say that we are hopeful that the pulp mill gets up, that the company is
able to get all its ducks in a row and that their mill can proceed as quickly as possible. It would
be an enormous boon for the industry overall and for the economy of Tasmania so we're very
supportive of the project.

FELICITY OGILVIE: Gunns made a statement to the stock exchange earlier this week saying it's
getting close to finding a joint venture partner. Sydney businessman and anti-mill campaigner
Geoffrey Cousins says he'll be doing everything in his power to stop Gunns getting that partner.

GEOFFREY COUSINS: My message would be to anyone who is thinking of joint venturing with Gunns is
that they would be subjected to the most vociferous opposition. This would go back to the days of
the Franklin Dam or something beyond it because there are so many people around Australia opposed
to this mill being built in this place.

FELICITY OGILVIE: Paul Oosting from The Wilderness Society says that even if the mill isn't built
the equipment that's being delivered today could still be used.

PAUL OOSTING: The equipment that's arriving today is what they call a bio-energy facility. To put
that in simple terms, it's a large power generator which is fed on native forest wood. So we're
concerned that Gunns is trying to hedge their bets with the pulp mill project. If that doesn't go
ahead they'll proceed with a bio-energy facility to burn Tasmania's irreplaceable native forests.

FELICITY OGILVIE: A spokesman for Gunns says the company is looking to build the wood-fired power
station as part of its pulp mill - not as a standalone project. And Gunns says it's confident of
getting the finance it needs to build the mill.

PETER CAVE: Felicity Ogilvie reporting there.