09/16/2011 11:12 EDT | Updated 01/12/2012 01:36 EST

NewPage paper mill in Nova Scotia shuts down, marking end of an era

POINT TUPPER, N.S. - The NewPage paper mill in Nova Scotia has completed an indefinite shutdown of its two paper machines, marking the end of an era for the 49-year-old operation.

A spokeswoman for the Point Tupper mill said the second of the company's two paper machines stopped running at 8 a.m. Friday.

Patricia Dietz said most of the mill's 600 employees will be laid off after finishing shifts in the next 10 days.

She said that for the next week, the remaining employees will be cleaning up the facility and working their final shifts.

It was Dietz's last day at her job, but she said she hoped to return if a new buyer is found.

"I wouldn't mind at all being the person to provide some good news for a change," she said in an interview.

She said by Oct. 1, a skeleton crew of 50 people will be left to maintain the plant while a new buyer is sought.

NewPage is blaming high power costs, a strong Canadian dollar and rising shipping costs for the closure.

Port Hawkesbury Mayor Billy Joe MacLean said the shutdown is a sad moment in the region's history.

"It's a historic day. I happened to be there on the day the mill started up.... It makes me sad that the greatest industry to hit the province of Nova Scotia stopped today," he said.

But he said he's hopeful that a buyer will be found for the mill, which has lost US$50 million over the last year, according to an affidavit NewPage filed with the province's Supreme Court.

Negotiations are underway between potential buyers and the New York investment banker Sanabe and Associates, with Ernst & Young, the court-appointed monitor for the mill, supervising the talks.

"Let's hope the shutdown is short-lived," said MacLean.

The mill has the capacity to produce 545,000 tonnes of paper a year, and has been an economic mainstay for the community on the Strait of Canso for the past five decades.

The company also owns about 20,000 hectares of land and its woodlands operations have provided employment to about 400 forestry workers.

MacLean said he's very concerned about pensioners in the community who could see their incomes fall sharply if four troubled pension funds are wound up.

He recently spoke to two pensioners who faced reductions of 20 to 25 per cent of their incomes in that scenario.

"I think it's a number 1 concern from all residents in the Strait region. It affects many families that have been retired 10 or 15 years who have left the mill and who looked forward to half-decent lives after working 35 years," he said.

-- Story by Michael Tutton in Halifax