News Ticker

Snowflake Mill Closes September 30; Hundreds Out of Work

By Ryan Randazzo for The Arizona Republic

Fire-salvage trees are stacked in the Apache-Sitgreaves National Forests above Christopher Creek, northeast of Payson. The timber and slash went to the Snowflake Power biomass plant, which also processed sludge from the neighboring Catalyst Paper Corp. mill, closing Sept. 30. Snowflake Power will remain open.
Photo Credit: Charlie Leight/The Republic

The economically struggling region of Navajo County around the town of Snowflake will see its jobless rate spike Monday when Catalyst Paper Corp. closes its paper mill and puts 308 well-paid employees out of work.

The company announced the closure in July amid bankruptcy proceedings for the Canadian-based Catalyst company, which has three larger paper mills in its home country.

Catalyst estimates that the plant generates another 1,000 spin-off jobs in the local economy, which likely will be affected by the closure. The company reported it paid $30.5 million in wages and benefits to Snowflake employees last year.

Catalyst couldn’t negotiate a sale in time to prevent the closure, so the plant will be disposed of through bankruptcy court, which could yield a buyer who would reopen the facility, but not before the end of the year.

Many residents have indicated they intend to take jobs at the mines while living in mobile trailers or temporary housing, and keep their families in the Snowflake area, he said.

Additional work could open up with potash mines developing in the Holbrook-Snowflake area, he said.

Catalyst officials said they unsuccessfully tried capital investment, service improvements and competitive labor agreements to improve profits.

Another 100 people who are employed at the neighboring Snowflake Power biomass plant will keep working thanks to recent deals to acquire the land under the power plant and needed equipment from the paper mill, according to the plant’s owners, Phoenix-based private-investment firm Najafi Cos.

The biomass plant burns scrap wood from the surrounding forest as well as paper sludge from the mill to generate electricity. Najafi partner Peter Woog said the power plant will endure even without the steady supply of paper sludge that makes running the power plant less expensive.

Because the proceedings are set by the bankruptcy court, there is no chance that Najafi or another buyer will swoop in and prevent the mill’s closing Sunday.

Read more at AZCentral.