Abitibi-Consolidated to Build Biomass Energy Generator at Fort Frances, Ontario, Mill

Montreal, Quebec, Canada, 08 March 2007 -- /PRNewswire/ -- Abitibi-Consolidated Inc. today announced an investment of CAD 84.3 million in a new biomass energy generator to be located at its Fort Frances, Ontario, pulp and paper mill. Construction is scheduled to begin in the summer of 2007, and the generator is anticipated to be in operation during the fall of 2008.

The equipment will use renewable, cost-effective fuel from wood waste to generate steam and 45.5 MW of electricity for the mill. The new biomass boiler will burn mill-generated wood waste and primary sludge, as well as harvest slash from woodlands operations and wood waste from area sawmills.

"The new equipment will be instrumental in our strategy to reduce our energy costs and improve the overall competitiveness of the mill," said Alain Grandmont, senior vice president, Commercial Printing Papers. "With this boiler, the mill will be less dependent in the future on market energy pricing and better equipped to compete in the fiercely competitive global marketplace," added Grandmont.

The project has received solid support from mill employees and unions, along with the Ontario government and the local municipality of Fort Frances.

In January 2007, Abitibi-Consolidated and local unions agreed to contract extensions, which will provide the company with labor stability. "This agreement will enable us to deliver on the full potential of the mill and position it among the best in terms of safety, environmental performance, customer satisfaction, productivity, and financial measures," said Doug Murray, Northwestern Ontario regional manager.

The Government of Ontario provided a significant contribution to the project through the Forest Sector Prosperity Fund. The municipality of Fort Frances provided great support at every phase of the project, notably facilitating the necessary zoning changes. "A collaborative spirit made this project a reality and so very much reflects the shared commitment of all stakeholders. This simply would not have been possible without everyone's extra efforts and support," Grandmont concluded.

The Fort Frances mill annually produces 285,000 metric tons of commercial printing papers and 116,000 metric tons of market kraft pulp. The mill employs 650 people, while 350 individuals are contracted for its woodlands operations.

Abitibi-Consolidated is a global leader in newsprint and commercial printing papers as well as a major producer of wood products, serving clients in some 70 countries from its 45 operating facilities. Abitibi-Consolidated is among the largest recyclers of newspapers and magazines in North America, diverting annually approximately 1.9 million metric tons of waste paper from landfills. It also ranks first in Canada in terms of total certified woodlands. Abitibi-Consolidated shares are traded on the Toronto Stock Exchange (TSX: A) and on the New York Stock Exchange (NYSE:ABY)

Source: Abitibi-Consolidated Inc.