The PM2 paper machine at the Norske Skog mill at Kawerau will close on January 9, a Norske Skog spokesperson confirmed today.

The closure of one of the mills newsprint machines, which produces 145,000 tonnes of 685cm newsprint and improved newsprint each year, will halve the production of the mill.

The Norske Skog mill in Kawerau. Image: Google Earth.

The mill employs 290 staff and the closure is likely to result in layoffs, although the mill will not disclose how many people will lose their jobs.

'At the moment we are under consultation with many areas of the mill. It is inappropriate comment on how many and when, it's quite an involved process we have to go through. A lot of decisions haven't been made about that yet.”

There are also no plans in place about the future of the PM2 newsprint machine. The spokesperson is unable to say if it will be simply turned off and left, or removed.

The permanent shut down of half the mill's capacity was announced by the mill's Norwegian owners in September.

They say the closure is required to create a better balance between demand and supply for newsprint in the region. There is today considerable surplus capacity of newsprint in the region.

Tasman mill general manager Peter McCarty says the decision is driven by falling demand and unfavourable exchange rates that make large scale exports into Asia unprofitable.

The mill will continue to produce newsprint for the New Zealand, Australian and Pacific Island markets.