Australia's last white paper manufacturing plant will close over a shortage of timber supplies, leading to job losses.
Opal Australia will withdraw from producing graphic paper at its mill in Maryvale in Victoria's Latrobe Valley, citing the sudden and unexpected suspension of wood supplies stemming from an ongoing court battle.
"The company and Opal has been considering alternative wood supplies in order to continue graphic paper operations," Opal's Japanese parent company Nippon said in a withdrawal notice.
"But has concluded that alternative procurement is not feasible and has decided to discontinue the graphic paper business at the MV Mill (permanent suspension of some manufacturing assets)."
White paper production at the mill was impacted in December after state-owned supplier VicForests was ordered to scale back harvesting in parts of Victoria.
The Victorian Supreme Court found VicForests failed to adequately survey logging coupes for two protected possum species.
VicForests is appealing against the decision, with a hearing in the Court of Appeal on March 23.
The disruption led to 49 production workers at Opal being stood down, although their pay was guaranteed until the middle of this month by the Victorian government.
Nippon expects to post a $21 million loss from the closure.
"With the withdrawal from the graphic paper business, Opal will focus on the packaging business, which is expected to grow in the future, and will strengthen its integrated packaging supply strategy in Oceania by transitioning the MV Mill into a sustainable packaging paper mill," it said.
The Victorian Greens have seized on the mill's imminent closure to call for an immediate end to all native forest logging in the state, ahead of the scheduled deadline of 2030.
"We simply shouldn't make paper out of endangered species habitat but the Maryvale mill closure shows the complete failure of the Victorian Labor government on logging," the state party's deputy Ellen Sandell said.
"They could have brought forward an orderly transition out of logging to protect workers but chose not to."
The Victorian government was informed of the decision by Opal and will work with the company to minimise redundancies.
"We stand with Opal workers at this difficult time and have activated our dedicated Opal worker support service to deliver immediate tailored support services to affected workers," a government spokeswoman said.
The Construction, Forestry, Maritime, Mining and Energy Union has been contacted for comment.
