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Mayor Crystal McAteer and Council welcomed the recent announcement of a new pellet mill planned on the Tolko site which is expected to add jobs and further diversify the local economy.
“On behalf of Town Council, I would like to thank TOLKO for having confidence in the economic viability of our community,” said McAteer. The news of the new pellet mill and the promise of more employment is truly welcome!”
The new pellet plant is the result of a partnership between Pinnacle Renewable Energy and Tolko Industries, to be built as the Northern Pellet Limited Partnership. The new facility will enhance Pinnacle’s fibre supply, using high-quality wood fibre sourced mainly from Tolko’s existing sawmill in High Level.
Wood pellets are created with sawmilling residuals – sawdust and shavings, which can make up as much as 30 per cent of a harvested log. In the past, those materials were burned off at the site. Those materials, along with harvesting residuals such as branches and tops left behind.
The material is dried and mixed with dry shavings, and then ground down into manageable particles. It is squeezed through a pellet die which pushes out pencil-sized tubes of compressed wood. These tubes are then cut down to pellet size. They are then cooled, screened to remove uncompressed dust, and moved to storage. The pellets are primarily used for biofuel operations.
It is expected the new facility will create between 170,000 and 200,000 metric tons of wood pellets per year, to be sold through Pinnacle’s contracted backlog of long-term, take-or-pay off-take contracts. Under the terms of the Partnership, Pinnacle and Tolko will each own a 50 percent interest in the Facility.
“We look forward to expanding our business relationship with Tolko, growing our production platform in Alberta and further diversifying our regional fibre supply,” said Robert McCurdy, Chief Executive Officer of Pinnacle, said in the announcement release. “We have established a strong working relationship with Tolko through the construction and operation of our jointly-owned Lavington, B.C. production facility, which was completed safely, on-time and on-budget. Our partnership with Tolko offers Pinnacle the ability to diversify the business further and position the Company well to implement our growth strategies.”
“We’re excited to once again partner with Pinnacle Renewable Energy on a project that promises to bring economic, environmental, and employment benefits to both companies and the community of High Level,” said Brad Thorlakson, President and Chief Executive Officer of Tolko. “When commissioned, Northern Pellet Limited will reduce our carbon footprint, secure and increase full-time permanent employment opportunities in the area, and allow us to use all our bark, shavings, and sawdust to produce pellets for growing markets. We look forward to working with Pinnacle on the project and to a successful, on-time, on-budget completion, with start-up in 2020.”
As part of the partnership between Pinnacle and Tolko, Pinnacle will operate the plant and manage customer relations, marketing, sales, and logistics. Tolko will supply heat energy and fibre through long-term supply agreements.
The new pellet plant will be built on the Tolko site and is expected to begin construction later this year. It could be in operation toward the end of 2020. It is expected to cost about $54 million, which will be split between Pinnacle and Tolko.