SALVAGING WESTAR

The forests minister
is given two deals to cook with —

Westar Timber last week signed two

ble, agreements with two separate buyers to sell

- -.its) Northwest assets, and now all three

_ parties are expecting B.C. Forests Minister

~~ Dan Miller to juggle the bids into a

-’. compromise arrangement that will put the
- operations on some sort of sane footing.

The assets — two sawmills, two forest
tenures, a whole log chipper and a sorting
yard — have been for sale since May 24 of
last year. Both the Kitwanga sawmill and
the Carnaby mill in Hazelton had been suf-
fering from'a chronic shortage of logs,
prompting debt-

Just a memory these days inthe the

saddled Westar to
unload ‘the entire
works. After sev-
eral months of
negotiations with
numerous interests
Westar took the
‘unusual step .of
closing sale agree-
ments with two
companies for
virtually the same
assets. The sale
cannot go ahead,
however, without
Miller’s approval.

Skeena Cellu-
lose signed an
apreement for
purchase of the
Carnaby sawmill, a
log sort in Stewart,
whole log
chipper in Hazel-

Kispiox.

12

Terrace Review — March 13, 1992

ton and a 607,000 cubic metre forest licence
in the Kispiox Valley for $16.1 million, plus
a provision for up to $10 million in “working
capital", a term that refers to closing existing
liabilities off the current account books. The
other sale was to Amma’ghan Forest Prod-
ucts, a consortium of Northwest native bands
and private investors, who agreed to pay
$17.3 million plus working capital for all the
assets, including the Kitwanga sawmill and
Tree Farm Licence 51, two items that SCI
isn’t interested in.

In a 1988 forest licence application Wes-
tar valued those assets at $69.2 million, not
including the timber.

The sale is complicated by the pending
Langforth-Watts report on the Westar oper-
ation, which should now be in the minister's
hands, and a lawsuit launched by the Git-
wangak Band of Kitwanga against the prov-
incial government and Westar that seeks a
court order to force. Westar to re-open the
Kitwanga sawmill in compliance with the
terms of its forest licences.

The Kitwanga mill, the primary source of
paid employment for the Gitwangak people,
has been in a state of near-demise for the
past two years due to log shortages. In docu-
ments filed in court, the Gitwangak allege
that Westar understated the log require-
ments of the Carnaby mill to obtain approval
to build it in 1987, then systematically
starved Kitwanga of timber to keep Carnaby
supplied while the Ministry of Forests failed
to enforce the terms of the company’s forest
licences. The documents say the initially
stated requirement was 560,000 cubic metres
but claim that Carnaby actually uses up to