Gunns 'cleared' for mill construction

Timber giant Gunns Ltd has won federal government approval to start construction of its controversial Tasmanian pulp mill.

Environment Minister Peter Garrett on Monday said he had approved environmental modules relating to the proposed mill's construction in the Tamar Valley.

"The nine modules I have approved today relate only to the construction of the mill and its associated infrastructure," Mr Garrett said.

Four modules dealing with the construction of mill workers' accommodation on the Bell Bay site were satisfied last year.

But three modules addressing the impact of mill effluent on commonwealth marine assets remain to be satisfied.

Mr Garrett has given Gunns until March 3, 2011, to satisfy those issues, setting the scene for the controversial pulp mill project to become a federal election issue once again.

Gunns chairman John Gay welcomed the approvals, saying the company had proposed the outstanding marine effluent modelling itself.

"We are now clear to begin construction on the mill, pending financial close," Mr Gay said.

Gunn still needs to find a joint-venture partner to help fund the $2.2 billion mill's construction, a task made more difficult by the global financial crisis.

The Wilderness Society spokesman Paul Oosting said Gunns' bulldozers could be rolling into the Tamar Valley any day, despite the project not having full approval.

"The minister has made it clear that Gunns can begin construction of the pulp mill, even though they have not met the full federal government approval," Mr Oosting said.

Opposition environment spokesman Greg Hunt said the decision allowed mill construction to begin before the 2011 deadline.

"Peter Garrett today did his best to hide the fact that he had given the green light for the construction of the Gunns pulp mill in Tasmania," Mr Hunt said.

Greens Senator Christine Milne said the decision put the pulp mill squarely on the next federal election agenda.

"Gunns are clearly angling for taxpayers to have to pay for the tertiary treatment, and (Prime Minister Kevin) Rudd should unequivocally guarantee that no federal money will be on the table."

Senator Milne said she feared a scenario near the next election where unemployment and flagging investment caused by the global financial crisis would propel a late push by Gunns for public funds to address the effluent issues.

The pulp mill was estimated to create about 3,500 new jobs in the construction phase and a further 1,600 new permanent jobs.

The Forest Industries Association of Tasmania is disappointed with the federal government's failure to fully approve the mill.

The association's chairman, Dr Julian Amos, said he was disappointed all of the modules were not approved after Mr Garrett had approved them "in principle".

"Retaining conditions based on a precautionary approach is unhelpful and will foster further doubt over the mill," Dr Amos said.

Shares in Gunns eased three cents on Monday to $1.15.