AGOKE LUMBER SIGNS JOINT VENTURE TO RE-START NAKINA SAWMILL

July 9, 2018

By: The Working Forest Staff

An alliance of three First Nations and Nakina Lumber Inc. held an official signing of a Joint Venture Agreement (JV) that sets out a framework for current and future business opportunities related to the Nakina dimensional lumber mill near Aroland First Nation. In attendance at the signing, hosted by Susan Buchanan of Nakina Lumber Inc, were the Agoke Lumber Board of Directors. The Agoke Lumber Limited Partnership (ALLP) is a forestry company that consists of the Aroland, Eabametoong and Marten Falls First Nation. The groundbreaking Agoke JV agreement opens up a dormant multi-million dollar forest sector in Northwestern Ontario. It sets precedents for First Nations on the eastern side of Canada dealing with forestry companies and business to business agreements including a goal to achieve 75% First Nation employment.

“This JV agreement is part of an over-arching Agoke strategy that will help us continue to ensure that local forest resources are protected, managed and developed for the mutual benefit of our First Nation partners and peoples. It will open up much-needed

employment opportunities in the Greenstone region, and add another revenue stream for our First Nation partners,” said Mark Bell, President, Aroland Director, ALLP.

The timing of the JV is crucial as a US lumber shortage has pushed lumber prices to record highs as builders stock up for what is expected to be one of the busiest construction seasons in years. The wood supply crisis is a result of a combination of the US – Canada softwood lumber dispute and tariffs, rail transportation issues and forest fires out west that has impacted fibre supply in British Columbia. These factors have created a perfect storm to open up opportunity for Ontario to increase its capacity to serve the rising US housing demand. It is projected that US housing starts is expected to recover to 1.5 million by 2020.

The new Agoke JV is set to yield revenue sharing, sawmill equity options and first right of refusal for contracts for the construction of forestry roads; log harvesting and delivery; and exploring bio-mass/bio-fuel energy generating opportunities.

“We are proud to pave the way for First Nations in Canada who have a dream of securing forest tenure on their traditional lands and benefiting from the tree stump to far past the mill’s production gates to international lumber markets,” stated Bill Spade, Eabametoong Director, ALLP. “We are hopeful that this model can be replicated in other forests management units with other First Nations and communities across the country,” stated Spade.

The Nakina Sawmill is expected to create 150 new jobs and another 150 woodland operation jobs, in addition to indirect employment. “As the Nakina sawmill expands operations, we’ve got to improve lodging in Greenstone for remote First Nations peoples who want to work and become apprentices in the sawmill”, stated Delia Okees, Marten Falls Director, ALLP. “We’ve got high unemployment rates and our

First Nations population is the fastest growing segment in Canada, as the forest sector’s workforce ages and people retire, our First Nation’s peoples will be the logical choice for employment.

Mark Bell estimates logging contractors could harvest between 400,000 and 500,000 cubic metres of fibre which is sold to Nakina Lumber Inc. An allocation is set aside for First Nation entrepreneurs who have the proven capacity to deliver. “We are developing special programs and procurement policies that support the growth of Aboriginal business and participation in any forestry related contracts,” Bell added.

This JV Agreement comes three months after the March 28, 2018 signing of a historic Forestry Agreement between the Agoke Development LP and the Ontario Ministry of Natural Resources and Forestry to implement an interim forest management arrangement for the Ogoki Forest Management Unit.

Agoke Development LP, which manages the Ogoki Forest, oversees forest access road maintenance and silviculture programs while protecting culturally sensitive areas and animal habitat.

 

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