Neucel Specialty Cellulose’s bankruptcy will cost the province an additional $9 million to decommission the abandoned pulp mill in Port Alice at the north end of Vancouver Island.
PricewaterhouseCoopers (PWC) has been managing the process since it was appointed as receiver earlier this year. It has already spent $5 million and told the court it would need a total of $17 million to manage the site until March 31, 2021.
Mill operations were stopped, supposedly temporarily, in 2015; Neucel left a handful of staff on site until early 2019 when it shut the doors for good, laying off remaining staff.
The company dissipated with several million dollars of debt owed to the province and local municipality, as well as millions of litres of hazardous waste. Letters and bills for clean up and unpaid taxes sent by the province went unanswered, leading the court to grant a bankruptcy order.
In April, B.C.’s Supreme Court approved PWC to borrow up to $8 million to decommission the abandoned mine. Now it has approved a total of $17 million, which will cover costs until March 2021.
This is on top of the more than $13 million owed to the province, $1.8 million owed to the Village of Port Alice and hundreds of thousands in debts to other creditors. Fulida Holdings, a large private Chinese textiles company, bought Neucel in 2011, and is listed as the largest creditor being owed $235 million.
In its report to the court, PWC detailed what has been done so far, and everything that still needs to be dealt with to de-risk the site.
The mill covers approximately 40 acres of land, including the wharf and effluent treatment systems and all the production equipment. The substation that produced hydro power for the mill was built on mill property; there are several landfills, some without permits, and millions of litres of untreated waste water to be dealt with.
The most expensive cost so far are PWC’s fees, totalling $1.4 million, followed by $1 million to manage effluent and $850,000 to transport the hazardous waste. Going forward, PWC expects the effluent management to cost more than $6 million. This includes dealing with the spent sulfite liquor, known as red liquor, that began to collapse and risked leaking into the ground.
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