Months of collaborative discussions have resulted in a new strategic partnership between the Town of Hinton and the company that recently completed its purchase of the Hinton pulp mill from West Fraser for 5 million USD.
Completion of the sale to Mondi took place on Feb. 3. The long-term partnership focuses on the future of the treatment and distribution of the town’s utility systems.
Chief administrative officer Jordan Panasiuk explained that the town operates its water treatment plant located on the mill’s property. This means that the mill itself owns a piece of the process.
“There was a direction to move towards our own water treatment plant standalone in 2007. We have not done that so far.”
Now it has made a 20-year agreement to continue with Mondi, giving the town time to make that move.
“With that relationship, there are no provisions for extension, so in 20 years’ time, we will need to be cutting the ribbon on a new water treatment plant,” Panasiuk said.
The plant also deals with the town’s wastewater, so the town has negotiated a 20-year agreement as an original term that will automatically update as Hinton makes a series of investments that have been agreed to by both of the parties.
The term will reflect the life cycle of the assets or infrastructure that investment represents.
“The idea there is we’re going to be very long-term partners on wastewater for the foreseeable future,” Panasiuk said.
“Water is not quite the same, but we do have an expiry date in 20 years. With wastewater, we have an agreement from the town’s perspective to invest roughly around $16 to $17 million within the next 10 years, and on water, we expect likely within the first five years, we’ll make an investment of around $6 million.”
The mill has the capacity to produce approximately 250,000 tonnes of pulp annually.
Mondi intends to invest in the mill to improve its productivity and sustainability performance. It also intends to invest in expanding the plant primarily with a new kraft paper machine, which will integrate its paper bag operations in the Americas and support the company’s future growth subject to pre-engineering and permitting.
“This is a new unique partnership with Mondi,” Panasiuk said.
“There was a recognition from both sides when we got together that there needed to be a lot of investments into these systems. Mondi is willing to make them on their side of the fence, and we as a town, we also have that desire to move this infrastructure forward.”
“We are delighted to welcome our new colleagues from Hinton Pulp mill to Mondi and look forward to working together to secure the mill’s future and support Mondi’s growth in North America with our portfolio of sustainable packaging,” said Mondi Group CEO Andrew King.
Both parties have a strong desire to tackle community odor with the wastewater treatment, along with ensuring compliance, reducing landfilling and being more environmentally friendly system, Panasiuk explained.
“There’s an alignment on the vision for these for these assets and how we move forward. I think that was key.”
Panasiuk added how the new owner and the new partnership signal a renewed sense of optimism for both the mill’s future and the security of Hinton’s economy.
“We’re very fortunate to have this type of investment.”
