Maine Gov. Baldacci: Paper mill to stay open

Baldacci spokesman David Farmer said the governor spoke to company officials, who told him they have decided not to close the mill. How long it stays open, they said, depends on cash flow and customer orders. The company officials were not identified.

Wednesday's announcement "is good news for the workers there," Farmer said.

Fraser Paper operates Katahdin's mills in Millinocket and East Millinocket. Katahdin announced in late May that it planned to close the Millinocket mill because of record high oil prices. The East Millinocket mill, which makes paper used in telephone directories and employs more than 400 people, was to remain open. The mill uses a wood-fired biomass boiler to power its papermaking operations.

In June, Katahdin officials said they were trying to figure out how much time and money it would take to install a biomass boiler to provide fuel for its Millinocket mill and ease its reliance on oil so the mill could remain open.

The Katahdin mill, which produces paper used in newspaper inserts and for years operated as Great Northern Paper, remains one of the few in Maine that relies almost entirely on oil to generate heat and steam for the paper-making process, Baldacci said in a statement after the closing was announced.

He said at the time his administration "is fully engaged in an effort to see the mill reopened. I believe the company's energy problem can be solved."

The two mills employed more than 1,000 workers before Great Northern Paper Co.'s owner filed for bankruptcy in 2003. The mills were renamed Katahdin Paper Co. after being purchased by Brascan Corp., now Brookfield Assets Management Inc., of Toronto. Fraser paper manages the mills.