N.L. government agrees to buy power from struggling Corner Brook paper mill

The Newfoundland and Labrador government has announced an agreement to purchase additional power from Corner Brook Pulp and Paper, which it hopes can stabilize the struggling newsprint mill.

According to a press release, the six-month agreement will see Newfoundland and Labrador Hydro buy excess energy produced at the Deer Lake hydroelectric station, one of the mill's assets. The purchase of power won't affect power rates for residents, the release added, as the electricity will come from an existing source.

In turn, the press release says the mill will explore new revenue sources involving "wood-based bioproducts projects."

Wood-based bioproducts can include things like cellulose used in products like textiles, concrete, biofuels and wood pellets.

The deal also comes with a commitment from the mill to sell saw logs to other mills, which the government press release called "essential for the stability of the forest sector."

The mill, which is owned by Kruger Inc. and employs about 300 people, has faced challenges in the 2020s as the newspaper industry evolves.

It closed for seven days in November and went through a similar situation in 2019 when it closed for two weeks at Christmas due to a weak market for the product.

Corner Brook Pulp and Paper received a $110-million loan from the province in 2014, but CBC News learned in November that it owed over $117 million as payments haven't been made and interest has accumulated.

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