July 6, 2010 / 10:39 PM / 8 years ago

UPDATE 1-Catalyst Paper to close 58-year-old paper mill in Sept

* Says would take a charge of C$302 mln in Q2

* Says about 100 employees affected

July 6 (Reuters) - Canadian paper maker Catalyst Paper Corp CTL.TO said it would permanently shut the 58-year-old Elk Falls paper mill in September and immediately close paper recycling operation in Coquitlam, resulting in a charge of about C$302 million ($286.3 million) in the second quarter.

The pulp and paper maker said about 100 Elk Falls mill employees would lose jobs. The mill was indefinitely shut since February 2009.

The recycling operation in Coquitlam that supplied to the company’s Crofton mill, was indefinitely idled in February and all employees were laid off at the time, Catalyst Paper said.

The company said steep decline in commodity paper markets, uncompetitive labour and tax costs could not be overcome, resulting in the closure of these two facilities.

The Elk Falls mill began operation in 1952 and produced 784,000 tons of pulp, paper and kraft paper annually, at its peak, the company said in a statement.

Catalyst Paper has five mills located in British Columbia and Arizona, with a combined annual production capacity of 2 million tons.

Shares of the company closed at 15 Canadian cents Tuesday on the Toronto Stock Exchange. ($1=1.055 Canadian Dollar) (Reporting by Aftab Ahmed in Bangalore; Editing by Vyas Mohan) (aftab.ahmed@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: aftab.ahmed.reuters.com@reuters.net))

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