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Baikal pulp and paper mill closure program to be submitted to Russian government in Q4 2013

The program has economic, ecological and social sections

Photo ITAR-TASS/Nikolai Ryutin

Photo ITAR-TASS/Nikolai Ryutin

IRKUTSK, July 31 (Itar-Tass) - A program of shutting down the environment-unfriendly Baikal pulp and paper mill will be submitted to the Russian government in the fourth quarter of 2013, the press service of the Irkutsk region government said, citing a deputy head of the regional government, Alexei Zezulya. The program will be part of a comprehensive economic modernization plan of the region’s Slyudyansky district until the year 2020.

A draft document was elaborated by regional authorities jointly with VEB-Engineering company, a subsidiary of Vnesheconombank. “The overall financing of the plan exceeds 42 billion roubles,” Zezulya said, adding that the draft would be adjusted for recommendations from control agencies.

The program has economic, ecological and social sections. It provides for dismantling of the equipment, recycling of the wastes that have piled up over the 50 years of the mill’s operation, and detoxication of lands. Moreover, it is planned to create new jobs in the Slyudansky district to ensure employment of the mill’s redundant workers, and to build a new heat plant in the town of Baikailsk, which is now supplied with heat from the mill’s thermal power plant.The press service said that about 17 billion roubles had been provided in the federal budget to finance winding up procedures.

Baikal's mill was commissioned in 1966. It is the sole major employer for the people of the nearby town of Baikalsk having a population of 17,000. Its annual output is about 200,000 tons of pulp. The state, represented by the State Property Management Agency, holds a 49 percent stake in the mill, while the remaining 51 percent of shares are held by companies controlled by businessman Nikolai Makarov. Since December 2010, the mill has been in receivership. On December 19, 2012, the Irkutsk region court of arbitration imposed bankruptcy proceedings at the mill for the term until June 5, 2013. On February 7, 2013, the same court ruled to replace Alfa Bank and its affiliated offshore companies with Vnesheconombank. Thus, it is now this bank that is the collateral creditor on claims worth about 1.352 billion roubles.

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