B.C. Forests Minister Katrine Conroy has approved the sale and transfer of forest tenure held by Canfor Corp. (TSX:CFP) to Peak Renewables for the creation of a new wood pellet plant in Fort Nelson.
Peak Renewables, a startup backed by Brian Fehr, former owner of the BID Group, last year announced plans to buy Canfor’s tenure for $30 million. It had already acquired a shuttered Canfor sawmill site in Fort Nelson, with the purpose of building a new wood pellet plant.
Previously, tenure swaps and sales did not need ministerial approval. But in 2019, the NDP government introduced new rules requiring the Forests minister to sign off on tenure sales and transfers – a move driven by concerns that the most of the forestry tenure in B.C. is held by just a handful of large companies.
In a news release today, the ministry said the tenure transfer was supported by the Fort Nelson First Nation and has been approved.
There is a growing demand for wood pellets in places like the UK and Japan, where they are burned to produce power instead of coal. Bioenergy, as it is sometimes called, is considered renewable, since trees grow back, taking up the CO2 that would have been produced when pellets are burned.
The tenure licence in question – FL A17007 – has an annual allowable cut of 553,716 cubic metres.
Fort Nelson is one of the few regions in B.C. with a surplus of harvestable timber. It recently got a bump in its annual allowable cut because it has been under-harvested.
That is partly due to the composition of the forests in the Fort Nelson, which is about 60% aspen, whereas sawmills mostly want spruce, pine and fir for making dimensional lumber.
Peak Renewables has stated the new pellet plant would employ about 50 people, with the woodlands operations employing 300 to 400.