March 8, 2011 / 11:23 PM / in 7 years

UPDATE 1-Conifex plans biomass plant at Mackenzie sawmills

* Adds biomass plant to forestry operations

* Rebuilding sawmills it bought in 2008 and 2010

VANCOUVER, March 8 (Reuters) - Conifex Timber CFF.V will spend C$45 million ($46 million) to build a biomass energy facility linked to the Mackenzie, British Columbia, sawmills it is in the process of re-opening, the company said on Tuesday.

The western Canadian forestry firm also reported a loss of C$3.9 million, or 26 Canadian cents per share, in the fourth quarter, as it worked through the restarting and upgrading of its mills in Mackenzie and Fort St. James.

The results compared with a loss of C$2.2 million, or 52 Canadian cents per share, in the same quarter a year earlier.

Conifex said it hopes the biomass project, with a 36 megawatt steam turbine, will be able to produce 230 gigawatt hours of energy each year by burning waste fiber from the mills and nearby timberlands.

The company is still negotiating with provincial utility BC Hydro for a power purchase agreement, but it hopes to have the plant in commercial operation by the summer of 2012.

Conifex was launched in 2008 when it purchased the Fort St. James sawmill in northern British Columbia, which had been idled by Canfor Corp and Pope and Talbot. It bought the two-mill Mackenzie facility in 2010.

The company said it shipped 49 million board feet of lumber in the fourth quarter, a 35 percent increase over the same quarter a year earlier. Sales were reported at C$18.2 million, a 65 percent increase. (Reporting Allan Dowd; editing by Rob Wilson)

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