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The black hole

By Mike Bolan - posted Monday, 29 September 2008

Gunns Ltd maintains its pulp mill preparations are progressing - despite speculation its plummeting share price would kill off the $2 billion project.

Cheered on by “supporters” who took no risks, Gunns actions have turned out to be self-destructive with:

  • non commercial business models that degrade and waste resources;
  • pulp mill plans that failed to disclose real risks;
  • legal anomalies that threaten its business partners and others; and
  • optimistic valuations of itself and its future.

The following groups are at risk of being embarrassed or put at severe risk including:

  • taxpayers;
  • plantation “investors”;
  • contractors;
  • brokers; and
  • financiers.

Because many of the undisclosed risks were so high, the project has become a “black hole”.

The mill fantasy

Jaakko Poyry has spent two decades selling Australia on the idea of plantations and “industrial forestry” in order to sell us pulp and paper mills that deliver billions to Poyry & partners.

Poyry convinced Gunns that if they ponied up for a mill they’d make considerable money … but where would it come from?

Many people have queried how Tasmania could possibly compete with huge countries like Russia, China and Brazil in a high volume, low margin fibre commodities business.


The plan was to take perfectly good trees that took over a decade to grow and reduce them into chips for fibre (pulp). In the process they’d take clean water, worth real money in today’s climate, and turn it into industrial waste that would then pollute Bass Strait, or be poured into a vast landfill site to threaten groundwater supplies. The clean air of the Tamar valley was to be stunk out with sulfides, mercaptans and various micro fine particulates, while much of our farmland was to be converted into a “permanent plantation estate” that took hundreds of gigalitres of water from our catchments.

For their plan to work, Gunns needed to borrow $2 billion which they would pay off with chips and pulp made from publicly owned trees.

Most people (except our political parties and Gunns) recognised that such business ideas were totally incompatible with the socio-economic situation in the Tamar valley, as well as hostile to our climate and environment, plus grossly wasteful of Tasmania’s increasingly precious resources.

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First published in The Tasmanian Times on September 22, 2008.

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About the Author

Mike Bolan is an independent complex systems and business consultant. Mike worked for the Tamar valley community and others to prepare materials for the RPDC in which he spent about a year visiting Tasmanian communities, businesses and individuals to learn the impacts of forestry operations and the implications of a pulp mill on them. The lessons learned from that period are still relevant today and are used in this story, which is told to inform not to gain income.

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All articles by Mike Bolan

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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