Resolute Closure in Ontario and Quebec

THUNDER BAY – UPDATED – Resolute Forest Products has announced that the mill in Iroquois Falls is closing. Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) has announced the permanent closure of 465,000 metric tons of newsprint production capacity in Canada. This capacity reduction will be achieved with the permanent closure of the Iroquois Falls (Ontario) newsprint mill, as well as paper machine #1 at Baie-Comeau (Quebec) and paper machine #4 at Clermont (Quebec).

“Devastating news in Iroquois Falls with the shut down of the Abitibi paper mill just before Christmas time,” states MP Charlie Angus. “I have been speaking with the mayor, my provincial colleague John Vanthof and Resolute officials on the transition plan for employees and asking for a guarantee that the wood will not be shipped to Quebec”.

“We will be continuing to speak with effected people to ensure this brutal closing is handled as best as it can be,” added Angus.

Telephone Interview with Minister Bill Mauro

Resolute’s decision to reduce newsprint capacity is a result of the ongoing weakness in the global newsprint business, exacerbated by fiber-related issues, including both availability and costs, as well as transportation challenges. In Quebec, power costs played a role in these decisions, as well as the spruce budworm infestation.

“Market conditions have had a major impact on our newsprint operations in both Ontario and Quebec, and the cost position of these operations has made them vulnerable to the structural decline in newsprint,” said Richard Garneau, president and chief executive officer.

“There is another issue that cannot be ignored in these decisions: the ill-founded attacks of environmental activist groups. Their inaccurate and deceptive campaigning, which misrepresents the company’s forest management practices, was also a factor. These campaigns are based on malicious falsehoods regarding Resolute’s overall compliance with the Crown Forest Sustainability Act in Ontario and the Loi sur l’aménagement durable du territoire forestier in Quebec, and overall sustainability leadership. The provinces of Ontario and Quebec have forest management regimes that are among the very best in the world, and both governments are ensuring compliance. These systems deserve to be respected and defended, and we call upon those provinces to stand up for their standards and to refute these unjustified and unwarranted attacks,” said Garneau.

The Iroquois Falls mill employs approximately 180 people and has an annual production capacity of 210,000 metric tons of newsprint. It will permanently close on December 22, 2014, with closure-related activities running into January 2015. The currently idled paper machine #1 at Baie-Comeau will be permanently closed as of today, and paper machine #4 in Clermont will be permanently closed on or about January 30, 2015. The closures at Baie-Comeau and Clermont will result in the loss of approximately 120 positions and the permanent removal of approximately 255,000 metric tons of newsprint capacity. All statutory notice provisions of the two provinces will be respected.

Resolute understands the impact these decisions will have on employees, their families and local communities. The company will work with union representatives and government officials to respond to the needs of those affected. Local management will also ensure that employees receive support, that the relevant conditions in the collective agreements are respected, and that as many employees as possible are transferred to other company facilities.

“The decision to rationalize our newsprint capacity was difficult, as we are mindful of the impact it will have on affected employees,” added Richard Garneau. “Resolute remains committed to customer service and to the delivery of high-quality products and will work closely with customers to continue to meet their needs.”