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Forestry company Tembec Inc. says it will put its locked out newsprint mill in Pine Falls, Man., up for sale.

The mill, which has an annual capacity of about 200,000 tonnes, has been shut down since Sept. 1, when the company locked out its 250 workers there in a dispute over wage cuts.

“We have examined a full range of options related to our continuing ownership of this facility and have concluded that it is in the best interest of Tembec and the employees of the Pine Falls mill that we exit that site,” John Valley, Tembec's executive vice-president of business development and corporate affairs, said in a release.

“It is our hope to find a new owner for the site and we are prepared to work with all parties to facilitate a transaction. However, if the sales process is not successful or if it is not completed in a timely manner, we will consider other options, including a permanent closure of the facility.”

Tembec said now that it has announced the sale of the mill, it has told the Manitoba government and the United Steelworkers union it's prepared to end the current lockout, subject to reaching an agreement on some local issues.

However, the company said an end to the lockout will not lead to a reopening of the mill, an important employer in the small Manitoba town of Pine Falls.

Before it locked out workers Sept. 1, Tembec had said it needed an immediate and significant reduction in labour costs at the paper mill to keep it competitive in a radically changed market.

Wayne Skrypnyk, the United Steelworkers' lead negotiator in the Tembec talks, said he hadn't been directly contacted before the company issued its press release but said the president of Local 3-1375 had been given a heads up.

Mr. Skrypnyk said from his office in Winnipeg that there's been little in the way of negotiations between the union and Tembec, with only a few days of direct and mediated talks since August.

“I guess that I'm disappointed, to say the least,” Mr. Skrypnyk said in an interview.

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