The B.C. government welcomed today's news that Hampton Affiliates are one step closer to rebuilding the Babine Forest Products mill.

Hampton Affiliates has said that it intends to rebuild the Babine Forest Products mill subject to certain conditions being met, and that a final decision would be made at its December board meeting.

Hampton has indicated the need for the assurances of an adequate timber supply from the Ministry of Forests, Lands and Natural Resource Operations. In a letter, the minister committed the ministry to certain actions that would help ensure an adequate timber supply, if Hampton is able to formalize relationships with the area's six First Nations and the community of Burns Lake.

The ministry recognizes that while working with Hampton, logging rights of other licensees also need to be respected. If Hampton is able to form business arrangements with other licence holders, enough timber volume could be made available to support a new mill.

Quotes:

Minister of Forests, Lands and Natural Resource Operations Steve Thomson -

"The ministry is committed to continue working with Hampton, the six First Nations, the Village of Burns Lake and other forest licensees on solutions that will allow Hampton to rebuild the mill without impacting the harvesting rights of existing licensees."

Minister of Jobs, Tourism and Skills Training Pat Bell -

"I commend the people of Burns Lake for their resiliency as we continue to work through solutions for the long-term economic viability for the community."

John Rustad, MLA for Nechako Lakes, and Parliamentary Secretary for Forestry -

"The Special Committee on Timber Supply issued 20 recommendations in its recent report, including one specifically on Burns Lake. I'm pleased that the ministry is working with Hampton and the people of Burns Lake in implementing those."

Learn More:

A backgrounder (minister's letter to Hampton) follows.

Contact:

Vivian Thomas
Communications Manager
Ministry of Forests, Lands and Natural Resource Operations
250 356-2475

BACKGROUNDER

Text of minister's letter to Hampton Affiliates

September 11, 2012

Dear Mr. Zika:

The explosion and fire at Babine Forest Products sawmill was a tragedy that brought loss of human life and economic hardship on a scale that threatens the economic sustainability of the affected communities. We are gradually seeing fiber issues emerge that effect a much larger area as well as other communities.

The province convened a Special Committee on Timber Supply that has now submitted its report "Growing Fibre, Growing Value" which emphasizes the importance of a timely response to the situation in Burns Lake and the larger challenge in the interior.

It is my understanding that the owners of Babine Forest Products, Burns Lake Native Development Corp (BLNDC) and Hampton Affiliates (Hampton) are seeking an expression of government's intentions to manage timber supply in the Lakes TSA prior to finalizing a capital investment decision to rebuild the mill. I appreciate that Babine Forest Products and its owners are committed to rebuild and continue the mill in operation for a minimum of 15 years if it can secure an adequate timber supply.

Consistent with the report of the Special Committee, the Government of British Columbia will commit to taking the following actions to assist the owners of Babine Forest Products in their decision regarding potential rebuilding of the Babine Forest Products sawmill.

Securing Timber Supply to support a facility in Burns Lake

• I am prepared to adjust the existing apportionment in the Lakes TSA1 to create a significant new Community Forest Tenure that would;
• Have a current AAC of approximately 150,000 m32;
• Be made available to a community partnership that includes one or more of the Six Nations and would support a manufacturing facility in Burns Lake.

• I am prepared to revise the bioenergy offer that has been made to the Six Nations and issue a new offer that would:
• Have an AAC of up to 380,000 m33 from low volume stands; this volume is sawlog grade located throughout the Lakes TSA4;
• Include additional bioenergy volume (i.e. non sawlog grades) found in these stands which would further improve the economic viability of harvesting these stands; and
• Would be required to support a manufacturing facility in Burns Lake

• I am also prepared to move forward immediately with volume offers to local First Nations under the First Nations Forestry Program. These offers will provide approximately 64,000 m3 of long term volume that would support the creation of First Nations Woodland Licenses or other long term tenures. This volume would be available for the First Nations and at their discretion may support negotiated fibre supply agreements to support a manufacturing facility in Burns Lake:

Increasing fibre supply during the mid term

In addition, the government will take the following steps to manage and potentially increase the timber supply during the mid-term:

• Reconvene a Lakes TSA planning committee by the end of this calendar year to review the land use objectives in a manner consistent with the report "Growing Fibre, Growing Value";

• Take steps to secure financial resources required to sustain a program of fertilization in the Lakes TSA. Staff will undertake a review of stands that could provide a sound business case for return on investment and increased cut allowance;

• Complete a Type 4 Silviculture Strategy for the Lakes to ensure investments result in the maximum overall benefit;

• In order to reduce the harvest of the non-pine stands, implement a partition regulation in the Lakes TSA stands as soon as the amount of pine harvested falls significantly below the partition set by the Chief Forester;

• Complete a re-inventory of the Lakes TSA as soon as possible (the project was initiated this year).

• Direct the Chief Forester to review the AAC as soon as information from the inventory or monitoring indicates that a review will assist in safeguarding the mid-term timber supply.

• Direct the Chief Forester through a letter expressing the social and economic objectives of the Province and emphasizing the importance of timber in the economic recovery of the area.

• Based on the recommendations of the Timber Supply Committee regarding conversion of volume based licenses to area based licenses, we will bring legislation to the House at the next session. Conversion of Babine Forest Products licenses will be one of the first priorities for implementation under any resultant legislation. Babine has submitted a proposal for an area based tenure in historic Babine operating areas and we would expect a portion or portions of this area to be included in the area based licence that would be offered to Babine. The total area that would be offered will be commensurate with the proportion of cut held by Hampton.

• Remain open to the movement of existing licensees to other timber supply areas where mutually agreeable arrangements can be reached.

I believe that together, these steps will help us restore the health of the forest in the Lakes TSA and help us to optimize the timber supply. The specific timing of the various steps will be worked out as we move forward but our overall goal will be to provide an orderly and timely transition that is transparent, inclusive and maximizes business certainty so that you and others can make informed decisions. Clearly we intend to work closely with your company, local First Nations and the community in moving forward. As soon as we have some indication from you of the workability of the above, we will need to enter into significant discussions with the aforementioned groups.

I look forward to a positive response from Hampton Affiliates on your decision to rebuild the Babine Forest Products mill.

Sincerely,

"original signed by"

Steve Thomson
Minister

Contact:

Vivian Thomas
Communications Manager
Ministry of Forests, Lands and Natural Resource Operations
250 356-2475

1 There would be no changes to the volume available for existing Forest License holders or NRFL commitments. BCTS would be maintained at 20% of the long term apportionment which is required to support a competitive market system.

2 This would be converted to an area based tenure.

3 The 380,000 m3 offer will be adjusted downwards due to the issuance of First Nations Woodlands Tenures and Community Forest Agreements.

4 Some of this volume would become part of area based tenures in the Lakes.

------------------------------------------------------------

---------------

------------------------------------------------------------