Conifex to Curtail Production at Its Mackenzie, BC, Sawmill and Temporarily Reduce Power Plant Output

On Tuesday, Conifex announced that in light of imminently expected transportation challenges that will affect all Canadian lumber producers for an unspecified period, together with existing unfavorable market conditions, Conifex is reducing its sawmill operating schedule at its Mackenzie, British Columbia, site to a one-shift basis for the foreseeable future and temporarily curtailing its power plant, each commencing on August 26th. Conifex says it anticipates an end to the curtailment of at its power plant by September 30th.

In a statement, Conifex President and COO Andrew McClellan said:

“Unfortunately, a reduced operating schedule at the sawmill is necessary for the foreseeable future due to the combined impact of our inability to ship production on a two-shift basis to end markets for an unspecified timeframe, reduced demand for our lumber products, low lumber prices, and punitive lumber export duty impositions. … Conifex will closely assess and adjust the sawmill operating schedule as supply chain and market conditions evolve. We are working on a priority basis to position Mackenzie for long term sustainable production and will be seeking to mitigate the impacts on our employees as much as possible.”

While it is difficult to quantify the impact that the reduced operating schedule will have on production capacity, the power plant curtailment is anticipated to impact power production capacity by approximately 24.6 GWh, Conifex said. If there is a near-term resolution to the imminent transportation challenges, Conifex may be in a position to end the curtailment of the power plant before the end of September.

In addition, Conifex announced that as of August 19th, the allowable annual cut (ACC) of Conifex’s Forest License A15385 and Forest License A93631, in which Conifex owns a 50% interest, have been reduced by 117,172 cubic meters and 55,576 cubic meters, respectively. The new AACs for the licenses are 515,328 cubic meters and 244,424 cubic meters, respectively, or a total available sawlog supply of 759,752 cubic meters annually.