Pre-feasibility of a mechanical pulpmill complex in Northland

MPI Technical Paper No: 2016/72, Prepared for MPI by Indufor, Nov 2016

Currently only about a third of the timber harvested in the Northland region is processed locally, predominantly into structural timber products such as graded sawn timber and LVL. Given the size of the forest estate in Northland, the region has the potential to absorb additional wood processing capacity.

A 2014 analysis identified the possibility of establishing an integrated sawmilling and mechanical pulpmill processing facility located at a proposed ‘energy park’ within the vicinity of Top Energy’s Geothermal Power Plant near Ngawha. The analysis showed that of all the pulpwood/residue using industries, mechanical pulping appears to have the highest Wood Paying Capability (WPC), while of the sawlog/peeler log activity, sawmilling is most attractive.

The key outcome from this initial research was the validation of a concept for a world class integrated cut-of-log sawmill and mechanical pulpmill to be located at the Ngawha geothermal field near Kaikohe. This was perceived to be the most viable greenfield opportunity of scale for the region's wood processing industry, taking into account the specific need not to detract from the viability of other wood processing facilities in the Northland region.

In its initial or conceptual stage, the facility is envisaged to have a capital value of approximately USD750 million and would use geothermally generated electricity and heat to process 0.8 to 1 million m3 of industrial and pulp grade logs, which are currently exported unprocessed.

This report examines the availability of wood fibre, the markets for the products and the societal acceptability of such a facility being constructed in the area.

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