Argentina and Uruguay to discuss location of Botnia pulp mill

London, 26 April: Argentina and Uruguay are to discuss the location of the controversial $1.1 billion Botnia pulp mill for the first time, although construction work is 95% complete.

The mill is being built in Fray Bentos, Uruguay, on the Uruguay River, which divides the two countries, and has spawned a diplomatic crisis and strong local opposition. Argentina is concerned it will suffer from pollution caused by the mill, with none of the economic benefits accruing to its neighbour, and has claimed the mill breaks a treaty on development on the river.

Protesters have been blockading the bridge joining Argentina and Uruguay, which sits near to the mill site, since November 2006. Opposition centres on the environmental impact of the mill, which locals worry will pollute the river, although an environmental impact assessment issued by the World Bank concluded that it presents no risk.

Finnish paper firm Botnia, which owns the mill, says that Uruguay will benefit from a 1.6% increase in gross domestic product when it begins operations in the third quarter of 2007.

This latest joint declaration sets out a negotiating agenda which for the first time includes the mill’s location, and was signed by the foreign ministries of both countries. However, construction of the mill is 95% complete, and installation of equipment is around 60% complete, leading observers on all sides to the conclusion that it is unlikely that Botnia will be forced to move its mill.

Jorge Daniel Taillant, president of El Centro de Derechos Humanos y Ambiente (CEDHA), an NGO working on the Botnia mill issue, said: “The likelihood of relocation is questionable at this time.”

However, Taillant said he had little sympathy for Botnia, if negotiations do result in relocation, because he said the firm had failed to take into consideration local opposition before building the mill.

But Marko Janhunen, spokesman for Botnia, said the company is convinced it will not be forced to move the mill. “We are very pleased with the result of the meeting, in the sense that the atmosphere was good and there was the will to look for solutions,” he said.