Monday, December 17th 2007 - 20:00 UTC

Second pulp mill in Uruguay breaks ground Januay 16

A second pulp mill is to break ground next January 16 in Uruguay, following an agreement reached between the Spanish corporation ENCE and the Uruguayan government, revealed the country's Deputy Housing and Environment minister Jaime Igorra.

The new mill will be built on the River Plate coast in Punta Pereira, in the county of Colonia, just fifty kilometers from Argentina's capital Buenos Aires Igorra said that the company's environmental impact assessment blueprint is under consideration by the Ministry and at the latest in March, "if all is OK", ENCE will be authorized to actually begin constructing the plant after having cleared the area. ENCE officials showed the Uruguayan government the pulp mill's timetable: mid 2008 civil engineering work begins ending in early 2010, which means that by the second half of that year the plant should be in condition to begin exporting pulp. The whole project plus forested land could reach 1.5 billion US dollars, a significant boost for the Uruguayan economy with a GDP in the range of 18/19 billion US dollars. Last October ENCE officially presented three basic requests for its mega project, after weeks of uncertainty. ENCE is partly owned by the Spanish government and the books were exhaustively audited when the current Socialist Rodriguez Zapatero took office in 2004. Following the audit the most of the main posts were replaced. The requests include allowing ENCE to function in a "free port" area plus the building of a specific terminal in the River Plate for the loading of pulp. Almost all the ENCE pulp will be exported. ENCE anticipates the new plant should be operational by June 2010, will have an annual production of a million tons of pulp and will generate, from the discarded wood, "140 MW of renewable energy, 60 of which is to be incorporated to Uruguay's grid". The Spanish corporation was the first to arrive with its pulp project to Fray Bentos, Uruguay, where the controversial Finnish Botnia mill is now producing. However problems inside the corporation and the Spanish government delayed the project which finally was relocated, --along the River Plate-- following on Argentine pressures. Argentina objects to pulp mills on the shared river Uruguay which acts as a natural border between the neighboring countries alleging legal and environmental reasons. Spain is one of the main foreign investors in Argentina and following the 2001/02 melting of the South American country economic, (privatized) public utility rates have been frozen. Spanish companies and the Spanish government have insistently lobbied in defense of their investments, to limited avail so far, and have had a velvet gloves policy towards the Kirchner's couple presidencies.

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