Four years ago, Aurora Wood Pellets Ltd. began the development of a 200,000-metric-ton pellet plant in the Northwest Territories of Canada. With two Forestry Management Agreements in hand, CEO Brad Mapes hopes to purchase the site’s land this month.
Mapes attributes the reason the project has spanned over the past few years to how AWP plans to source its feedstock, an increase in the size of the planned property and the government of the Northwest Territories recently pulling their land department out of their Department of Municipal and Community Affairs. “We want to harvest full logs, we’re not going to take it as a byproduct from the mills, so we’re going to debark our material and use mulching of full wood,” Mapes said. “The issue we have is that we have several aboriginal groups all around our area, so what we’ve had to do over the last four years is work out deals with each of these groups so we can access wood out of their areas. That is what has consumed the largest percentage of time in trying to move this project forward.”
AWP has guaranteed a secure supply of timber with the Fort Resolution Deninu Kue First Nation and the Fort Providence Métis Council each signing FMA’s with the government of the Northwest Territories. Originally, AWP was working on landing an agreement with five communities, and now with the largest communities and harvesting areas—First Nation and Métis—onboard, Mapes believes the smaller community governing bodies in Hay River, Kakisa and Jean Marie River will follow by signing FMAs. “The GNWT, the deputy premier and cabinet have been 100 percent behind us, supporting what we are doing and it’s definitely a project that we believe will grow,” Mapes said. “The aboriginal groups are playing a huge part in our project by the fact that they are coordinating all of the harvesting. They are going to bring in experienced harvesters at first and slowly bring in their own people to work on the project.”
AWP has helped the communities come around to the proposed project by offering them an access fee per cubic meter to pay them for the trees in their area, as well as the opportunity to work with the harvest coordinator. In addition, Mapes said the project plans to provide funds for schooling.
Mapes is hoping if land can be purchased in the next few weeks that some groundbreaking can begin this summer by establishing some of the base foundational work. Next summer is when Mapes plans to start the majority of plant construction, and if so, expects the plant to be operational by mid-2017. The capital cost of the project is estimated to be around $19 million to $20 million, which includes the 320 hectares (791 acres) AWP is looking at purchasing for the project site.
The land Mapes is in the process of purchasing is by Enterprise, and logistics-wise is the best site for the company’s future plans. “It’s on the rail link, and it’s also central to our harvest area,” Mapes said. “There are opportunities that we could look at exporting some of our product. We also want to be able to produce a pressed log product that we can sell either in the NWT or export it south into Alberta or elsewhere.”
Initially, AWP plans on targeting the domestic market, but anticipates expanding to others in the future. Last April, delegates of the South Korean industrial company Hyosung Corp. met with Mapes to learn more about the project. “We’ve had players from South Korea who have come up to look at our project,” Mapes said. “What attracts some of the export market is the fact that we have a 25-year window of guaranteed product, so we can go to a larger consumer of the product and state that we can provide them with a long-term harvest supply.”
The plant will use debarked spruce and pine to make its premium pellets. “We are looking at some of the mulching, some of the underbrush, so we can use it for our dryer system to maximize our timber source for the project itself,” Mapes said.
The dryer system is one of the key components that AWP is in the process of exploring. “What I’ve found from touring mills is that a majority of them have undersized their dryer because the cost is so much,” Mapes said. “We have about a year to play with the dryer system, we can build our dryer system larger and basically just add on pellet production, which isn’t an issue. You can basically add 20,000 tons by putting another line on, but you are kind of stuck with that dryer system, so right now we’re just exploring a few more options on the plant design.”
NWT’s South Slave sources its pellets from outside the area. “What we’re doing is basically putting in a project that uses a renewable resource in the NWT, harvests it in a sustainable way and creates a whole new industry for the NWT,” Mapes said.
Mapes adds that there has been logging in the NWT, but very little. “On average in the last six to seven years it’s been less than 5,000 cubic meters a year in harvesting,” he said. Another point Mapes brings up about the feedstock source is the large amount of forest fires that have occurred over the past few years in the area. “We will be able to use some of the burnt wood areas that aren’t damaged to the point where we can’t use them, because we’ll be able to debark.”
Ultimately, Mapes hopes to positively impact the area’s economy with AWP’s proposed pellet plant. He anticipates 25 to 30 jobs for construction, plus the other contracted workers for gravel hauling, cement work, etc. Once the plant begins production, 25 to 30 jobs could be on site, with another 75 jobs for feedstock harvesting. “In the NWT the economy is as low as it’s ever been, and it’s just going to be a big opportunity for people,” Mapes said.