Shares in Australian timber products giant Gunns remain suspended from trading pending resolution of a compensation deal for the loss of logging rights in Tasmania.
Under a ruling signed on August 7 following discussions between federal and Tasmanian governments, industry and environmentalists, 430,000ha of public forests in Tasmania will become “informal reserves”.
Taking this area out of production, said Gunns, entails it surrendering its rights over 220,000m³ of sawlogs a year. As a result it wants the A$23m it says is due under an agreed compensation package. However, the Tasmanian liberal opposition says its should receive nothing given its previously taken “commercial decision” to exit native forest logging. Earlier Gunns had announced the sale of five of its Tasmanian mill sites as part of this strategic move and to reduce debt.
Gunns company secretary Wayne Chapman said that the company would seek a halt in trading of its shares until it got clarity on the material implications of the forestry package”.
Other Tasmanian speciality timber operators are worried they won’t get the wood they need under the forest reserve deal. Some maintain that there will just not be enough timber coming out of plantations to make up for the loss of native forest material, others that the former is not the same quality.
