Laar-led Estonian government approved construction of pulp mill in 2000

Amid controversy surrounding a €1 billion pulp mill planned to be built near Tartu, the archived minutes of a 25 January, 2000 meeting of the Estonian government have turned up in which the government of Prime Minister Mart Laar (Pro Patria Union) approved state measures for the construction of a pulp mill in Estonia.

The proposals for the measures were submitted by then-Minister of Economic Affairs Mihkel Pärnoja (Moderates), and the government elected to endorse them. The government also chose to task Pärnoja with "solving issues related to the construction of a pulp mill in Estonia."

Added to the minutes in the archive was a letter of explanation in which, among other things, it was stated that a study had been commissioned by the Ministry of Economic Affairs and conducted in 1998 regarding opportunities for building a pulp mill in Estonia.

"The basis was a theoretical new, modern pulp mill with an annual output of 600,000 tonnes and processing 2.9 million cubic metres of pulpwood, with a construction cost of $825 million (12 billion EEK), approximately $450 million of which would go toward imported equipment."

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The same study concluded that Estonia produced enough raw material to support a new, modern pulp mill, and that pulp production in Estonia would be economically viable.

The letter of explanation, which was signed by Pärnoja, highlighed five aspects of the effects a pulp mill on the Estonian economy:

Refining pulpwood would increase Estonia's net exports by up to 4 million EEK annually.

Construction of the mill would allow Estonia to tap a yet unused and economically unviable resource.

The mill would create 500 new jobs directly and up to 4,000 new jobs indirectly

Foreign investments would total up to 12 billion EEK.

The pulp mill would create the preconditions for the building of a paper mill in Estonia, which would increase the value of Estonia's wood experts another two- or threefold.

A coordinating document from the Ministry of the Environment signed by then-Minister Heiki Kranich (Reform) was likewise added to the minutes.

Pärnoja had told the media at the time that based on the Ministry of Economic Affairs-commissioned study, the most logically sound location for the pulp mill would be the Northern Estonian coastal town of Kunda.

Business daily Äripäev wrote at the time that other potential locations for the future mill included Ida-Viru County and the the Northwestern Estonian city of Paldiski s well as the Tallinn area.

In January 2000, Prime Minister Mart Laar (Pro Patria Union) led a coalition government comprising the Pro Patria Union, the Moderates and the Reform Party.

Editor: Aili Vahtla

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