MercoPress. South Atlantic News Agency

Uruguay's Botnia plant opening delayed on Spain's request

At the request of Spain Uruguay at last moment postponed the effective start-up of a 1.2 billion US dollars Finnish built pulp mill which has been at the heart of an acrimonious two-year controversy with neighboring Argentina.

The sprawling plant has met all regulatory requirements but was not yet authorized for production following a last minute phone call from President Tabare Vazquez currently on a professional and business visit to California. Housing and Environmental Minister Mario Arana, speaking Thursday at a news conference, said the Botnia cellulose plant passed final technical hurdles of government regulators. But the formal authorization for the effective start-up of the plant will be delayed "some more days" at the request of Spain, which is playing a leading role as a "dialogue facilitator" in the dispute with Argentina, Arana said. The minister offered no deadline, but later authorities said a decision was expected after the Spanish King and Latin American presidents meet next week for an Ibero-American Summit in Chile. Top authorities from the Finnish consortium including CEO Erkki Varis from Oy Metsa-Botnia AB and Kymmene Corporation arrived this week to Montevideo given the imminence of the green light for the pulp mill to begin production of a million tons of cellulose annually. However for over two years Argentina has raised concerns about pollution by the plant in the river that marks the border with Uruguay and has taken the litigation to the International Court of The Hague. Argentina argues Uruguay has ignored a 1975 accord which established the joint administration of the river Uruguay and its waters. Furthermore Argentine demonstrators have repeatedly blockaded three Argentine bridge crossings to Uruguay in the past two years, interrupting major ground transportation routes. Argentine demonstrators and pickets say Uruguay's pulp mill will cause lasting environmental damage and undermine tourism in a pristine region of soybean and citrus-farming plantations. But Uruguay said its studies show there will be no such damage and pollutants will be kept within legal limits. King Juan Carlos of Spain has served for a year as a "dialogue facilitator" between Presidents Vazquez and Argentina's Nestor Kirchner. According to Arana Spanish Foreign Affairs minister Miguel Angel Moratinos rang President Vazquez in the name of the King and President Rodriguez Zapatero. On the imminent announcement of Botnia opening from Buenos Aires Argentine Foreign Affairs Minister Jorge Taiana again accused Uruguay of persisting in its "abusive attitude towards the River Uruguay Joint Statute and contrary to the no innovation recommendations from The Hague International Court so as not to aggravate the controversy". Taiana said the announcement of the imminent start-up of Botnia are "a provocation and reflect Uruguay's unilateral actions which ignore the rule of the law and environmental questions", plus the fact they "affect the King of Spain's efforts, efforts which Argentina much values and appreciates". According to reports from Uruguayan journalists in California, President Vazquez admitted to a Los Angeles business forum that the Botnia pulp mill dispute will have "to follow its legal course in The Hague". The Botnia plant actually has been ready to begin production since mid October but in consideration to last Sunday's presidential election in Argentina, Uruguayan authorities were hopeful that with elected president Cristina Kirchner a "new start" or possibly a "fresher attitude" towards the issue could be expected from Argentina. The 1.2 billion US dollars Botnia plant investment is the largest private undertaking in Uruguay in the last half century. Uruguay's GDP is estimated at 18 billion US dollars.