June 15, 2012 / 1:32 PM / 5 years ago

Resolute Forest to idle Nova Scotia mill

(Reuters) - Resolute Forest Products Inc (RFP.N) (RFP.TO) said it would indefinitely idle its Mersey newsprint mill in Nova Scotia due to falling newsprint prices, affecting 320 employees.

The Mersey mill in Brooklyn, a joint venture between Resolute and the Washington Post Co WPO.N, will be idled from Sunday, Resolute said.

The Mersey mill has a capacity of about 250,000 metric tons. The company has a capacity of 3.1 million metric tons, according to its website.

Employees at the Mersey paper mill, associated woodlands, Oakhill sawmill and Brooklyn Power Corporation will be affected by this action, the company said.

"The mill produces newsprint primarily for export markets and is unable to compete due to declining prices in those markets, caused mainly by unfavorable currency fluctuations," Resolute Chief Executive Richard Garneau said in a statement.

Resolute's majority-owned Fibrek Inc FBK.TO said it will close Saint-Félicien mill in Quebec for 12 days to help control inventory.

Fibrek's Saint-Félicien mill has an annual capacity of about 375,000 tonnes of northern bleached softwood kraft pulp (NBSK), and the closure will impact production by about 12,000 tonnes.

Resolute owns majority of Fibrek, after Mercer International MRIu.TO, which had emerged as a white knight for Fibrek, exited the long and controversial take-over battle in April.

Reporting by Shounak Dasgupta in Bangalore; Editing by Don Sebastian

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