CANADA (From news reports) -- Domtar is nearing the final stages of its feasibility study for a potential new pulp mill in Liverpool, Nova Scotia.

The company, working in collaboration with the province, expects to make a public announcement in the first quarter of 2025, ahead of a court hearing in March.

The decision to proceed with the project is contingent upon meeting a 14% return on investment over 20 years, as outlined in the May 2024 court-approved settlement agreement with the province.

The feasibility study evaluates several key factors including construction costs, the price of wood, operational expenses, and the market potential for pulp and other bioproducts. According to Domtar, these assessments are essential for determining whether the project can move forward.

In a statement, Natural Resources Minister Tory Rushton emphasized the potential economic impact of the project, noting that a new mill in the region could create construction jobs and long-term, well-paying positions in the forestry sector. The project would also provide a market for low-quality wood and chips, benefiting the local supply chain.

The proposal aligns with broader provincial goals of supporting resource development and creating economic opportunities across Nova Scotia. The company's feasibility study is a critical step in this process, with a decision expected by early 2025.

Domtar's subsidiary company, Paper Excellence, entered into a settlement with the provincial government following the closure of the Northern Pulp mill in 2020. As part of the settlement, which resolved a $450-million lawsuit filed by Paper Excellence against the provincial government over closure, Domtar agreed to explore the viability of opening a new mill in Liverpool.

Local reaction to the proposal has been mixed, with some expressing concern over environmental impacts, while others see it as a necessary boost to the local economy.