HALIFAX - The $5 million that the Nova Scotia government has promised for the NewPage Port Hawkesbury paper mill will be needed to keep it in a semi-ready state, says a report by the court-appointed monitor overseeing the sale of the operation.
The Point Tupper, N.S., mill was shut down last year but kept in a so-called "hot idle" mode while negotiations continue with Pacific West Commercial Corp., whose bid to buy the mill was selected in January.
A report by monitor Ernst & Young said the mill would run out of its cash reserves during the week ending March 10 without $5 million in funding that the provincial government promised to provide in a letter dated Dec. 30. It said the $5 million would be expected to help the company cover expenses until April 13.
The government did not return a message seeking comment.
The report also said Pacific West Commercial and Nova Scotia Power were working towards a final agreement on power rates, which have been one of the biggest challenges in negotiating a sale.
Ernst & Young said any deal would require the approval of the Nova Scotia Utility and Review Board as well as a review that would likely take at least three months.
The monitor also said Pacific West Commercial had contacted the mill's union to schedule talks for a new collective agreement.
Archie MacLachlan, the vice-president of the Communications Energy and Paperworkers union local 972, said the union heard from the prospective buyer on Tuesday and talks are scheduled for March 9 to 12.
The mill was closed in September, throwing 600 employees out of work and affecting another 400 forestry contractors.
Creditor protection is in place until March 31.
