MercoPress. South Atlantic News Agency

A second pulp mill begins to break ground in Uruguay

Spanish corporation ENCE begins next week to break ground in the south of Uruguay for the construction of a pulp mill with capacity for a million tons annually. The billion US dollars project is still in the blue print and environment impact assessment stage but the company and the Uruguayan government are confident of the results.

The plant is to be built in Conchillas on the River Plate, a two hours ferry distance from Buenos Aires and 220 kilometers from Montevideo. ENCE originally was going to build the pulp mill in Fray Bentos close to where the controversial Finnish Botnia plant is in full production, but under strong arm twisting from Argentina the Spanish company, which is partly government owned, finally opted to relocate on the River Plate. Neighboring Uruguay and Argentina have been confronted for several years now over the construction of pulp mills along the shared Uruguay River which acts as a natural border between the neighboring countries. Argentina argues Uruguay violated a 1975 water resources joint management agreement, and Argentine pickets question the impact on the environment of the Botnia plant which also has an estimated annual production of a million tons of pulp. However regarding the plant in Conchillas which will attract 11.000 workers during the construction stage and create 5.500 direct and indirect jobs when finished in a couple of years, Argentina has so far not objected in spite of the fact its closer to Buenos Aires than to Montevideo. Besides the million tons of pulp, the ENCE plant is forecasted to produce 140 MW of renewable energy of which 60 MW will be injected into the Uruguayan national grid, sometime in 2010, according to officials from the Spanish company. "This will become the most important single overseas project of Spain", said ENCE delegate Pedro Oyarzabal who added that "we've come not only to plant trees but to develop a long term sustainable productive project". ENCE has purchased 150.000 hectares of forested land in Uruguay. In Fray Bentos Argentine pickets alleging Botnia contaminates, in spite of several studies to the contrary, have systematically blocked bridges linking the neighboring countries to protest the pulp mill project.