IP plans expansion at mill in Redwood|[07/17/08]

Published 12:00 am Thursday, July 17, 2008

Additional construction at International Paper’s Vicksburg mill planned before a deadly blast at the plant May 3 will begin before full operations are expected back in order, a company spokesman said Wednesday.

The Memphis-based producer of linerboard has applied to the Mississippi Department of Environmental Quality to amend an air permit to install a new burner in the lime kiln to allow the burning of petroleum coke as its fuel. Additionally, IP plans to build a new, 230-ton silo to store the solid, carbon-based fuel.

Unrelated to the repair of its recovery boiler, all of the new construction is expected to be permitted by the state after an Aug. 10 public comment deadline. The pet coke-related items represent an “energy reduction project” to be started in 2009, spokesman Amy Sawyer said.

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“We have asked for a construction permit in order to install the burner while we are down,” Sawyer said.

Company officials assure the project’s construction and operation are within Environmental Protection Agency standards for potentially harmful air pollutants under the Clean Air Act.

One person was killed and 17 were injured when an explosion rocked the plant on Mississippi 3 near Redwood during annual maintenance. All were contract workers. About 400 people, including IP’s 306 regular employees, were at the mill when the boiler exploded.

Three remain in critical condition at Joseph M. Still Burn Center in Augusta, Ga. One contract worker was released earlier this month.

Two of the three, brothers Robert T. “Terry” and Kenneth Townsend, filed a lawsuit June 16 in federal court claiming negligence on the company’s part. Their suit seeks unspecified compensatory and punitive damages.

Another lawsuit, filed by Glenn Rankin, was filed May 14 in Warren County Circuit Court seeking $1 million in punitive damages.

Warren County Circuit Judge Isadore Patrick signed an order June 12 allowing IP to repair the boiler. Plant executives have agreed on down-time pay and insurance issues with union leaders representing about 80 percent of its workforce as the company expects to repair the boiler in six months.

Costs of restarting the plant have not been specified by company officials, though insurance deductibles total about $20 million.

About 555,000 tons of linerboard used in corrugated packaging are produced annually at the Vicksburg Mill, which began operation in 1967.

Shares of IP rose 74 cents, or 3.4 percent, to close at $22.80 Wednesday after Buckingham Research analyst Mark Weintraub upgraded its shares in a client note because improving profit margins are boosting its cash flow.