Uruguay paper plants halted over water pollution fears

The construction of a giant paper mill project in Uruguay was halted on Tuesday after long-lasting protests in neighbouring Argentina, whose inhabitants claim the development would pollute their water.

Finnish company Metsae-Botnia and Spain’s Ence agreed to suspend the $1.6bn project for 90 days while Argentina and Uruguay study the environmental impact of two mills planned on the banks of the Rio Uruguay, the river that separates the two countries.

Metsae Botnia, Europe’s biggest eucalyptus pulp producer, decided to halt the construction of a planned $500m pulp plant on Tuesday, following Ence’s announcement on Sunday that it will suspend the construction of a $1.1bn plant.

The total investment of $1.6 would be the biggest in Uruguay’s history.

The affair caused political friction between Uruguay and its richer neighbour.

On March 1st, Argentinean president Nestor Kirchner had asked Uruguay to suspend construction for 90 days, objecting that Argentina had not been consulted on the project, and that this breached international treaties.

After Argentinean protesters concerned about water and air pollution blocked a major highway into Uruguay for months, affecting the country’s economy, Uruguayan president Tabare Vazquez had agreed to ask the companies to wait for an environmental assessment in exchange for a halt to the blockades.

Blockades were lifted last week as protesters await a meeting between the presidents, scheduled for Wednesday, when the next steps are to be decided.

By Goska Romanowicz

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