Province offers financial lifeline to struggling pulp mill

The provincial government is preparing to invest millions of dollars into ensuring a troubled New Brunswick pulp mill is able to stay in operation.

CBC News has learned the government will partner with Fraser Papers to invest in the company's infrastructure in Edmundston and Plaster Rock.

The announcement follows newsof a $17.3 million provincial loan for AV Cell Inc. in Atholville.

Natural Resources Minister Donald Arseneault isn't saying yet how much will go to Fraser Papers, but it will likely be more than what AV Cell received.

"We have a very substantial amount of money that we want to invest with Fraser Papers to ensure future success for that operation," Arseneault said. "It all depends on the type of investment infrastructure projects that they want to put in place."

The investment by the government will help maintain 385 jobs at the mill, he said.

New Brunswick's forestry industry is struggling with high energy and wood prices in the province and tough competition in the global marketplace.

Analysts say there may be a turnaround in the forestry sector but it's not imminent and more closures are possible next year.

Of the 61 mills left in New Brunswick, only 16 are operating at full capacity.