VANCOUVER, B.C. — Conifex Timber Inc. is reducing its sawmill operating schedule at its Mackenzie, British Columbia site to a one-shift basis for the foreseeable future and temporarily curtailing its power plant, each commencing on August 26, 2024 in light of imminently expected transportation challenges. The company anticipate an end to the curtailment of our power plant by September 30, 2024.  

On August 18, 2024, Canadian National Railway formally notified the Teamsters Canada Rail Conference (the "Union") that it would begin locking out Union workers early on August 22, 2024, and the Union issued a 72-hour strike notice to Canadian Pacific Kansas City Rail.

“Unfortunately, a reduced operating schedule at the sawmill is necessary for the foreseeable future due to the combined impact of our inability to ship production on a two-shift basis to end markets for an unspecified timeframe, reduced demand for our lumber products, low lumber prices and punitive lumber export duty impositions,” said Andrew McLellan, president and COO of Conifex.

“Conifex will closely assess and adjust the sawmill operating schedule as supply chain and market conditions evolve. We are working on a priority basis to position Mackenzie for long-term sustainable production and will be seeking to mitigate the impacts on our employees as much as possible,” said McLellan.

Conifex continues to work collaboratively with the Ministry of Forests to implement important policy decisions, including a decision published by the Minister of Forests today, under Section 63 of the Forest Act to align annual harvest volumes with the Chief Forester of British Columbia's May 2023 Allowable Annual Cut ("AAC") determination for the Mackenzie Timber Supply Area ("TSA"). Accordingly, the Minister has prescribed an 18.4% reduction of AACs of Replaceable Forest Licenses to align harvest levels to the current AAC.

Effective August 19, 2024, the AACs of Conifex’s Forest License are 515,328 cubic meters and 244,424 cubic meters, respectively, or a total available sawlog supply of 759,752 cubic meters annually.  

A primary consequence of the Minister’s decision is that Conifex’s internal timber supply will account for a slightly lower portion of sawlog consumption, while open market sawlog purchases will account for a slightly higher portion.

To help ensure that manufacturing facilities in the Mackenzie TSA have assured access to sawlog supply for decades to come, Conifex also expects the Ministry will update its methodology for determining cost allowances and stumpage charge impositions and put additional safeguards in place to ensure harvesting in the southwest partition zone is sustainable. 

“While the decision to reduce our operating schedules was difficult, and we regret the impact this will have on our employees, their families, and the community, we are encouraged by the fact the Mackenzie TSA has the highest sawlog surplus of any TSA in the interior region of BC, and are confident the Ministry recognizes it is in the public interest to strengthen the economic sustainability of the ultra-forest-dependent community of Mackenzie and nearby First Nations communities. We do not anticipate any challenges securing sawlogs to maintain capacity operations in the future once logistical and market conditions permit a return to full operations,” said Ken Shields, chairman and CEO of Conifex.