Catalyst secured court approval to scrap some of the equipment at the Elk Falls pulp mill on Wednesday.
The company filed an affidavit with the B.C. Supreme Court on March 16 to permit the sale of mill assets after a year-long attempt to auction all major pieces of equipment failed.
With the failure of that auction, the company developed a plan to sell the equipment for scrap value and use the proceeds to demolish the non-useable buildings and infrastructure down to slab level, the affidavit says.
But the company then altered its plan and pursued bids from interested companies to scrap and sell most of the assets of the mill but not demolish the key equipment components or buildings.
Schnitzer Steel BC, Inc. was the successful bidder and would begin the work as soon as possible following authorization of the agreement by the BC Supreme Court.
That approval came on Wednesday.
Communications, Energy and Paperworkers Union spokesperson Karen Cooling told the Vancouver Sun that the approval is bad news for Campbell River and the remaining three B.C. mills that Catalyst continues to operate in Crofton, Powell River and Port Alberni.
“It takes away some hope from Campbell River,” she said. “And it raises the potential for all of those mills being shut down and scrapped.”
The company recently reached an agreement with the CEP which represents workers at the three remaining mills.
Catalyst was also seeking court approval to sell its remaining mills if a restructuring plan is not approved by creditors.
Another option the company has is to sell the company for a value of up to $395 million, which is how much debt is held by creditor, the Sun reported.