Shares in woodchipper Gunns Ltd have fallen sharply after the
federal government declined full approval for Gunns' $2.2 billion
pulp mill in Tasmania's Tamar Valley.

Federal Environment Minister Peter Garrett said on Monday that he
had not approved all operating conditions allowing the Gunns mill to
proceed and wanted further environmental studies carried out.

Mr Garrett said he had approved 13 conditions so far, but three
would not be granted until the completion of studies of potential
marine impacts.

The minister also imposed a new condition allowing civil penalties
of up to $1.1 million per offence for any breach of the
environmental limits for the mill's operation.

"I am not satisfied ... that I can grant final approval for this
mill without fully understanding its potential environmental
impacts," Mr Garret said.

"That includes having a thorough understanding of the potential
impacts of the mill's effluent discharge on commonwealth marine
waters and absolute confidence in the proposed management and
response strategies that are proposed to put in place to protect the
environment."

Gunns now has until March 3, 2011 to re-submit the three conditions
for approval after its environmental impact modelling is completed.

Forest Industries Association of Tasmania (FIAT) chairman Dr Julian
Amos said he was disappointed all of the modules did not gain
unconditional approval.

"Although most of the modules have now been approved, and this is a
positive, the conditions placed on the final three modules will
cause continuing doubt and delay," he said.

"These three modules relate to marine impacts, and it is my
understanding that the minister has approved these in principle,
however, retaining conditions based on a precautionary approach is
unhelpful and will foster further doubt over the mill.

"At this time of economic uncertainty, such an approach will be
detrimental to the Tasmanian economy."

January 5, 2009 - 2:38PM

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