The falling dollar and the end of the mining construction boom have improved the economic viability of a Tamar Valley pulp mill, according to a Launceston financial analyst. Source: The Examiner
Polling conducted for The Examiner showed the project still had the backing of a narrow majority in the North, with 51.2% of people in Bass and 52.5% of people in Lyons expressing support.
Receivers for failed timber company Gunns will soon announce a preferred bidder for the pulp mill permits and the 650-hectare Long Reach site.
Financial analyst Tony Gray said the falling Australian dollar and the availability of wood chips made the project more viable than it was when Gunns was still in business.
“The conditions are materially different,” Mr Gray said. “The dollar is now around 74¢ … and there is a plantation estate ready in Tasmania.”
Mr Gray said the end of a construction boom in the mining sector would mean a lower cost to build the mill than what it would have been in the recent past.
“You should be able to get a project built for a lot less than you could have four or five years ago,” he said.
However, Mr Gray said the pulp mill’s divisive past would also play a factor for any potential investors.
“There’s greater sovereign risk with this project,” he said. “Anyone looking at it will see that it does have around half the people supporting it, but around a third opposing it and will ask if it has a social licence.”
State Growth Minister Matthew Groom said the government wanted to see the mill built.
“The market has got to determine the answers to these questions,” he said. “We want to work with the business community to ensure that we are removing barriers in the form of regulation, [and] doing all we can to support confidence in Tasmania and its future.”
