The Alberta Forest Products Association (AFPA) announced that as of July 1, Pinnacle Renewable Energy Inc. has joined the Association.
Pinnacle is a manufacturer of wood pellets with seven manufacturing facilities in Alberta and British Columbia and shipping capacity through the Port of Prince Rupert.
“We are very excited to join the AFPA,” said Leroy Reitsma, President and COO of Pinnacle. “The Association has a tremendous history, representing Alberta’s most sustainable industry for 75 years. As a company that is focused on sustainability, we are proud to be part of the AFPA’s future.”
The Alberta Forest Products Association is a private, non-profit industry organization, representing lumber, panelboard, pulp and paper, and secondary manufacturing wood products companies operating in Alberta.

Valmet will supply a biomass power plant to DONG Energy’s Asnaes Power Station located in Kalundborg, Denmark. By converting its electricity and heat production from coal to sustainable biomass at the Asnaes Power Station, DONG will take an important step in reducing its CO2 emissions.

The value of the order is approximately Euro 80 million. The plant is scheduled to be in commercial operation in late 2019.

Valmet’s delivery consists of a 140 MWth biomass-fired HYBEX power boiler plant featuring bubbling fluidized bed (BFB) technology. The parameters for the boiler are 50 kg/s, 100 bar and 540°C. Valmet DNA automation system covers the whole plant and includes also information management and safety related systems.

Headquartered in Denmark, DONG Energy is one of Northern Europe’s leading energy groups.

Valmet is a leading global developer and supplier of process technologies, automation and services for the pulp, paper and energy industries.

Highlights

• Argento has acquired 100% of the share capital of WoodBois, a leading global trader and producer of sawn timber, for $14.6m over 3 tranches including c$4m equity
• Gabon Forestry concession actually 96,851 hectares (vs. 41,278ha initially estimated)
• Potential annual harvest of over 9 million m³ identified by third party inventory assessor
• Sawmill capacity of 42,000 m³ (vs. 24,000 m³) verified by Obtala and consultants
• Credit facility already increased by 36% to support higher timber trading volume in 2H 2017
• Obtala to invest $400,000 to complete 18,000m³ capacity veneer factory by end 2017
• Paul Dolan (CEO) and Warren Deats (COO) appointed to WoodBois Board
• Hadi Ghossein to become CEO of new holding company WoodBois Gabon

Obtala Limited (AIM: OBT), the African focused agricultural and forestry company, is pleased to announce the completion of its acquisition through Argento Limited (its 75% owned forestry subsidiary) of WoodBois International ApS (WoodBois) following the satisfactory completion of its due diligence process further to the announcement of 24 May 2017.

Argento has acquired 100% of the share capital of WoodBois as of June 30, 2017 for a total consideration of US$14.6 million (approximately £11.2 million), and Paul Dolan (CEO) and Warren Deats (COO) have been appointed to the WoodBois board. WoodBois’ founder directors, Zahid Abbas and Jacob Hansen, each of whom are former DLH Group executives with over 20 years’ experience in African timber sales and procurement, will remain with Obtala for a minimum of 5 years, while Hadi Ghossein, a Gabonese citizen who manages operations in Gabon, has committed for a minimum of 3 years.

WoodBois International
Founded in 2004, WoodBois is engaged in the global trading of sawn timber sourced from 100s of exclusive timber producers throughout Africa, as well as the production of sawn timber planks and veneer from its concessions in Gabon. WoodBois is headquartered in Copenhagen, Denmark, with African trading operations based in Abidjan, Ivory Coast, where the company leases warehouse space for inventory. WoodBois maintains a diverse buyer and supplier base with no pronounced customer or regional concentration with sales into the Middle East (33%), Europe (17%), USA & Canada (15%) as well as into Africa (14%), South America (13%) and Asia (9%). WoodBois’ concessions in Gabon now total 96,851 hectares, and are all located within 70km of their 42,000m³ capacity sawmill and 18,000m³ veneer facility in Mouila, Gabon. WoodBois is currently planning expansion into Asia, with joint venture discussions underway with strategic partners in Pakistan, where WoodBois has already secured a contract to provide railway sleepers for the construction of a major railway linking China to Pakistan’s port of Gwadar, set to become the largest port in Asia.  The selling shareholders of WoodBois are Tropican Holding ApS, A2Z Holding Aps and Mr Hadi Mabala Ghossein.

Due Diligence Findings
Forestry Concession
Since Obtala announced the acquisition of WoodBois on 24 May 2017, WoodBois has received approval for a forest management plan for a 20-year concession covering a net area of 96,851 hectares near Mouila, Gabon, 82,703 hectares of which is dense forest. Each year WoodBois may apply to harvest an area of 5,000 hectares, and each 5,000 hectare area may remain open for harvesting for up to three years with no more than three areas in any concession opened for harvesting at any one time. As long as WoodBois has the resources to fell, haul and process the timber, any tree can be felled on the proviso it is in the agreed management plan and has a diameter equal or greater than the minimum exploitable diameter at breast height for that species.

Forest Inventory
Obtala commissioned a third-party inventory assessment to determine the potential annual cut of first and second grade quality timber available to WoodBois in each 5,000 hectare area, based on the timber inventory and government requirements. Over 25 commercial species were identified in the forest, however the inventory assessment focused only on the five primary species WoodBois is currently harvesting. An annual potential first and second grade cut of 8,201,091m³ of Okoume, 527,691m³ of Okan, 153,662m³ of Azobe, 926,940m³ and 186,925m³ of Ovengkol was found. This assumes approximately 3,000 hectares of each 5,000 hectare area is readily accessible productive land, a conservative assumption.

Harvesting Capacity
WoodBois’ current harvesting capacity was assessed by Obtala’s commercial due diligence team and an independent forestry consultant, concluding an annual harvest of 71,280m³ can be readily achieved with existing equipment. Given the extent of the timber resources available in the concession there is scope to invest in increasing harvesting capacity many times over.  Although the inventory resource is considerable in reality the amount we harvest is likely to be drastically less than our allowance due to our commitment to sustainable harvesting practices.

Sawmill Operation
WoodBois’ sawmill in Mouila, Gabon was visited by the Obtala team in June. The volume weighted average recovery rate across all species (January-May) was found to be 57.5%, and a target recovery rate of 56% was measured by a forestry consultant who accompanied the Obtala team on site. Year to date average production cost per m³ sawn timber was found to be $249 per m³, in line with WoodBois estimate of $260, with the operation expected to achieve lower production costs as volumes increase. The annual capacity of the sawmill was estimated at 42,000m³ (vs. 24,000m³) once new equipment (already purchased by WoodBois) is installed.

Veneer Factory
Obtala intends to invest $400,000 to compete the construction of WoodBois’ veneer factory in Mouila. This includes the purchase of additional equipment required to address identified bottlenecks and achieve an annual production target of 18,000m³ of veneer. The veneer factory is expected to be completed by the end of 2017. Obtala’s commercial due diligence team was able to verify all production cost and market price assumptions for the veneer business, which is expected to contribute significant cashflow from 2018.

Trading Business
WoodBois’ trading business, historically the main contributor to annual revenues (~$15m) is headquartered in Copenhagen, where it conducts the sale of wood primarily sourced in Africa to a diverse network of buyers. The Obtala team visited WoodBois’ African trading operation in Abidjan, Ivory Coast, where wood is sourced from regional suppliers, then stored (and typically kiln dried) before shipment. Obtala intends to significantly upscale this business, which has seen its available capital reduced as WoodBois invested in production assets in Gabon, and has already increased WoodBois credit facility, enabling WoodBois to procure a greater volume of wood from African suppliers (and at higher margin via ‘pre-financing’ production) in 2H 2017.

Terms of Acquisition
Obtala has acquired the entire issued share capital of WoodBois, for a total consideration of approximately US$14.6 million to be satisfied by a mixture of cash and new Obtala ordinary shares payable in three tranches.

• Tranche 1: Initial cash consideration of US$3 million (approximately £2.30 million) and the issue of 15,641,499 new Obtala ordinary shares within five business days of completion of the due diligence period on June 30 2017;
• Tranche 2: Further cash consideration of US$3 million (approximately £2.30 million) on the earlier of 30 September 2017 and 120 days after Completion; and
• Tranche 3: Deferred cash consideration of US$ 5 million (approximately £3.84 million) payable over five years in equal quarterly payments commencing 30 September 2017.

The consideration shares to be issued as part of the Tranche 1 consideration, with a value at 17.63p per share of £2.76 million (approximately US$3.59m million), are subject to a 24 month lock up period, with any disposal subject to Obtala’s consent and orderly market provisions. They represent approximately 5.63% Obtala’s current issued ordinary share capital. Any shortfall (or excess) in working capital relative to debt assumed on completion, though not expected to be material, will be offset by a purchase price adjustment to Tranche 2 and Tranche 3 payments. Tranche 2 and 3 payments are conditional on the continued employment of WBI’s two founder directors, Zahid Abbas and Jacob Hansen.

Both the Tranche 2 and Tranche 3 payments are conditional on the successful transfer of WoodBois’ assets in Gabon (including the forestry concession, land and fixed assets) to a new holding company, WoodBois Gabon, which will be 100% owned by Argento Limited. Hadi Ghossein is to be CEO of WoodBois Gabon, with Jacob Hansen, Zahid Abbas, and Paul Dolan as Directors.

During the year to 2016, WoodBois recorded earnings before interest and tax in Danish Krone of DKK 3.53 million or US$496k (vs. DKK 2.53 million in 2015 or US$370k) on turnover of DKK 98.3 million or US$13.8m (vs.  DKK 106.8 million in 2015 or US$15.6m). Profit after tax for 2016 was DKK 2.10 million or US$295K (vs. DKK 891K in 2015 or US$131k). As at 31 December 2016 WoodBois had total assets of DKK 60.45 million or US$8.5m (vs. DKK 56.92 million in 2015 or US$8.3m).

Commenting on the transaction, Miles Pelham, Chairman of Obtala said: “I am pleased and excited to announce the successful and timely completion of our due diligence process and welcome WoodBois to the Obtala family.

Our due diligence team verified substantially all the assumptions upon which our valuation was based, finding on numerous occasions that the WoodBois team had been very conservative. A great deal of trust has consequentially developed between the Obtala and WoodBois management teams, which gives me great confidence in our ability to execute on the business plan.

Clearly, WoodBois’ forest has the potential to support many multiples of current production and is already rapidly scaling. I am equally encouraged by our analysis of the timber trading market. It appears that working capital has been the only thing holding back substantial growth in WoodBois’ trading division and we intend to unlock this potential immediately.”

Commenting on the acquisition, Zahid Abbas, Co-Founder of WoodBois said: “The completion of our acquisition could not come at a better time. With the dry season now underway in Africa, WoodBois can ramp up the production of our forestry businesses in Gabon. The Obtala management team understands the gap left in the global timber trading market after banks retrenched from commodity trade finance following the financial crisis, and have shown themselves capable of raising the capital required to dramatically scale this business through the provision of trade finance, which they have already initiated as of the day of completion.”

Advisors
Financial due diligence was conducted by Obtala’s Group Accountant Carnel Geddes. Independent consultants assessed WoodBois’ harvesting and processing (sawmill and veneer) operations, alongside Obtala’s commercial due diligence team. An inventory assessment and valuation of WoodBois’ forestry concessions was conducted by a company specializing in forestry valuation and investment services.

Obtala’s legal due diligence and structuring advice, as well as the management of Gabonese counsel, was provided by the Leeds and Paris offices of DWF. DWF (France) specializes in providing in-depth knowledge of the sectors vital to the development of Africa, such as energy and infrastructure, natural resources, real estate, and agribusiness industries.

Obtala Limited
Miles Pelham – Chairman Paul Dolan – CEO
www.obtala.com
+44 (0)20 7099 1940

ZAI Corporate Finance Limited (Nomad)
John Treacy / Ray Zimmerman
+44 (0)20 7060 2220

Brandon Hill Capital (Joint Broker)
Jonathan Evans
+44 (0)20 3463 5000

Beaufort Securities Limited (Joint Broker)
Gavin Burnell / Jon Belliss
+44 (0)20 7382 8300

This announcement contains information which was previously inside information for the purposes of Article 7 of the Market Abuse Regulation EU Regulation 596/2014.

This information is provided by RNS

The company news service from the London Stock Exchange

Kaarel Tali has been appointed Mill Director for Metsä Wood’s Pärnu mill in Estonia, effective August 1, 2017. He reports to Jari Tikkanen, SVP, Production & Technology.

 As Mill Director Tali will be responsible for the birch plywood mill operations in Estonia as well as implementing Metsä Wood strategy to the mill level.

 Before the start-up of the mill, Kaarel Tali is involved in the construction project and recruiting personnel for the new mill, and works with local stakeholders.

 Tali has a long career in the wood products industry at Metsä Svir sawmill in Russia. He has worked for example as Purchasing Manager, Production Designer and Mill Manager.

 Metsä Wood provides competitive and environmentally friendly wood products for construction, industrial customers and distributor partners. Metsä Wood is part of Metsä Group.

At its small-diameter timber sawmill in Orrefors, Sweden, Södra is investing about SEK 35 million ($4.1 million) in a new boiler and drying facility, which will enable production increases in the future. The supplier is Fröseke Industriservice AB.

“This investment is necessary for profitability. Currently, there is insufficient boiler capacity, which means we must sell some goods undried. The investment will enable us to increase production and also dry the entire sawn volume,” said Jörgen Lindquist, President of the Södra Wood business area.

The limiting factors for the sawmill’s capacity are the boilers and wood dryers. The two existing biofuel boilers that currently serve the sawmill are to be replaced by a new, larger biofuel boiler of 6 MW instead of todays 2.5 MW.

“The change of boiler will also enable the simultaneous expansion of wood drying through the addition of six chamber dryers. Following the investment, the sawmill will go from a drying capacity of about 60,000 cubic metres to approximately 105,000 cubic metres,” says Jörgen Lindquist.

The new facility will be put into operation in 2018.

About Södra:
Södra is the economic association that unites more than 50,000 forest owners in southern Sweden. The Group’s three business areas are production of sawn and planed timber goods, interior products, paper pulp and biofuel. In recent years Södra has also become such a large producer of electricity. It employs 3,500 people in areas that range from forestry management and environmental conservation to accounting, sales and product development.

BSW Timber has kick-started a major investment programme in its material handling equipment by commissioning 8 new Bulmor side-loader vehicles for its sawmill in Newbridge-on-Wye, Powys, Wales.

In a GBP 900,000 ($1.1 million) contract with UK-based Briggs Equipment, the vehicles will be used to transport sawn timber on site.

Following an in-depth selection process, BSW chose Briggs Equipment following a proven track record of working together in other UK mills – a partnership which has delivered efficiencies and improved safety and fleet management capability as part of a company-wide drive to improve reliability in site operations.

BSW has invested more than GBP 6 million ($7.8 million) into its Newbridge-on-Wye sawmill over the past decade, making it the largest single-site sawmill in Wales, employing 148 staff.

BSW Timber currently produces over 1,200,000 cubic metres of sawn timber each year, mainly for the UK’s construction, fencing and landscaping markets.

Confirming their commitment to environmentally sustainable and socially responsible business, Arkhangelsk PPM and their general supplier of timber, Titan Group, have officially announced their support for the establishment of the Verkhneyulovsky nature reserve in the boundaries close to the ones identified in the Arkhangelsk Region Forest Plan, on an area of at least 350,000 ha.

Given that the established Verkhneyulovsky nature reserve having an area of at least 350,000 ha will be the sixth protected area that covers large parts of forest blocks leased to Titan Group and Arkhangelsk PPM, the companies insist that the condition for complete approval of the Verkhneyulovsky nature reserve in the boundaries close to the boundaries identified in the Arkhangelsk Region Forest Plan, on an area of at least 350,000 ha, should be a revision of the moratorium agreements signed earlier by APPM and Titan Group for the forest blocks located outside of the protected area proposed by WWF Russia.

Arkhangelsk PPM and Titan Group also have to state that the establishment of the protected area in the Northern Dvina and Pinega watershed on the area proposed by WWF Russia (at least 350,000 ha) will inevitably result in gradual curtailing of the operations of Titan Group’s logging companies which harvest timber in the forests located in the proposed Verkhneyulovsky nature reserve over the next 7 years.

In view of the above, Titan Group and Arkhangelsk PPM suggest that the Arkhangelsk Region Government, Arkhangelsk Regional Assembly, and concerned authorities of the Russian Federation should immediately start developing a set of measures that would mitigate the negative social and economic impact for the municipalities located in the Verkhneyulovsky reserve proposed by WWF Russia on an area of at least 350,000 ha.

Titan Group and Arkhangelsk PPM would like to stress that for the period over which Titan’s logging companies will have to curtail their operations in the Verkhneyulovsky reserve area proposed by WWF Russia to extend on at least 350,000 ha, both companies will remain committed to FSC certification, noting however that this certification system is unable to ensure a balance between the interests of the economy, the public and the environment, but rather gives preference for the interests of the environmental organizations.

On June 23, 2017, during a round table held by FSC International in Bonn (Germany), the leading negotiator for the protected area on behalf of Titan and Arkhangelsk PPM, Yury Trubin, emphasized that both companies strictly comply with the Russian forest and environment protection laws. In order to strengthen their position on the global market and confirm that their forest management practice conforms to the international requirements, APPM and Titan were certified in the 2000’s by one of the most widely recognized voluntary forest certification systems, the Forest Stewardship Council (FSC).

Both companies, including a Titan Group member, Lesozavod 25, fully comply with all the requirements of FSC certification, as confirmed by annual audit reports issued by the leading auditor, NEPKon.

In his address in Bonn, Yury Trubin stressed that compliance with the requirements of FSC forest certification includes maintaining high conservation value forests, including preservation of pristine forest areas (PFAs) located in areas leased/subleased by logging companies.

Trubin said that Titan Group, Arkhangelsk PPM, Lesozavod 25 operate in PFAs located in the Arkhangelsk region, and a large part, over 1 million cubic meters of the cutting quota in the leased forests, is located in PFAs. In order to meet the requirements for PFA conservation, logging companies in agreement with the international environmental non-governmental organizations (NGOs), WWF and Greenpeace, have voluntarily assumed the obligations to conserve the parts of PFA located in the leased blocks and signed a moratorium on logging operations in these blocks, and strictly adhere to these commitments. Timber cutting in PFA parts is carried out in compliance with the applicable requirements of the FSC standard for forest management and the signed moratorium agreements.

In addition, Titan Group as a member of FSC Russia is currently involved in the development of a new national standard for FSC forest management in Russia, which provides for partial use of PFA forests by the industry. The standard is being developed with consideration of the international environmental non-governmental organizations’ interests and position on PFAs.

According to Yury Trubin, in the opinion of the environmental NGOs, establishing a protected area in parts of PFA forest blocks leased to Titan Group, Lesozavod 25, APPM, and other timber companies in the region, as well as unleased forest blocks, will lead to more efficient conservation. For this purpose, in early 2000’s the international NGOs initiated the establishment of a protected area in the Northern Dvina and Pinega watershed. The possibility of this nature reserve area being established is reflected in all revisions of Arkhangelsk Region Forest Plans 2008, 2011, 2016, and the Arkhangelsk Region Territorial Planning Scheme.

The Company’s representative at the round table reminded that Titan Group, Lesozavod 25, Arkhangelsk PPM support the protected area in the Northern Dvina and Pinega watershed in the boundaries that would factor in the current situation in this forest land, the operating capacity of Titan Group’s logging companies, and the operating programs for timber supply and development of processing capacities of the processing companies, Lesozavod 25 and Arkhangelsk PPM.

For this purpose and in order to develop and introduce new methods for sustainable forest management in the leased forest blocks, Titan Group, Lesozavod 25, Arkhangelsk PPM with participation of WWF and Greenpeace Russia (as experts) have started to form a new model of forest management, which will be more focused on establishing protected areas in the new boundaries approved by the international NGOs.

Titan Group, Lesozavod 25, Arkhangelsk PPM will continue to operate (harvest timber) in the PFAs which are not included in the proposed nature reserve and the voluntary moratorium areas in compliance with the applicable Russian forest laws.

Titan Group, Arkhangelsk PPM, Lesozavod 25 maintain a continuous meaningful dialog with the international environmental NGOs to coordinate the boundaries of the proposed protected area within their leased blocks, by gradually aligning their positions. A meeting will be held soon to coordinate the boundaries of the proposed protected area in the above companies’ leased bases.

For further information, please contact:
Milena Avada
+7 925 0106625
http://www.titangroup.ru
www.appm.ru

As expected, Canadian lumber producers were hit earlier this week with additional duties on softwood lumber exported to the U.S. The U.S. Department of Commerce on 26 June approved new preliminary anti-dumping duties in the 7% range against Canadian lumber producers. That’s on top of earlier countervailing duties.

Combined, the countervailing and anti-dumping duties add 27% to 31% to the cost of lumber exported to the U.S. B.C. is Canada’s largest producer and exporter of lumber to the U.S., so the biggest impact is in B.C.

For now, the duties have yet to take any major toll on B.C. companies, thanks to high lumber prices, driven by strong demand in the U.S. and a low Canadian dollar. But eventually, they will begin taking their toll.

In the past, international tribunals have ruled that the American duties are unjustified. But it can take years for such rulings, and in the meantime, some of the less profitable mills are vulnerable, which is why federal and provincial governments prefer to try to negotiate a settlement.

Canada’s current share of the U.S. market has been shrinking. Even so, the U.S. still represents about 50% of B.C. lumber exports, with 30% going to Asia. The new duties being imposed on Canadian lumber might be even more punishing if global lumber prices weren’t so high.

Canada’s largest union in the private sector, representing more than 310,000 workers says that the $867-million forestry industry aid package of announced by the Canadian government in May will help cushion the blow, but it is not a long-term solution.

Source: biv.com

Hiab, part of Cargotec, is further accelerating the development of its digital and connectivity offering. Hiab today announced its forthcoming HiConnect(TM), a connected solution that, in combination with its class-leading load handling equipment, will further enhance productivity, efficiency, and safety for Hiab’s customer’s businesses.

“As pioneers in load handling, our mission is to shape the future of this industry. Digitalization is a business reality for our customers across all industries. At an early stage we decided to invest and strategically focus the development of intelligent services and connected solutions supported by a dedicated New Business Solutions unit. Our stated ambition was and remains that, by 2018, all new Hiab equipment will be connected”, says Roland Sundén, President of Hiab. “Connectivity in itself though does not bring value, nor does data. We aim to understand our customer’s needs and develop new solutions together with them, where data-based insights are allowing them to run their business more efficiently and safely,” he continues.

HiConnect(TM) is a new connected service offering, enhancing the productivity of Hiab equipment for fleet operators. Customers will be able gain real-time insights via web-based dashboards showing the utilization, condition, and operation of their connected Hiab equipment. These insights will allow them to reduce unnecessary downtime, optimize performance, and actively manage service and safe operation. Select Hiab customers in several markets are currently successfully piloting HiConnect, with the commercial launch aimed for Q3 2017.

“With Hiab’s Connected Solutions our focus is on working very closely together with our customers to really understand and help address their needs and business challenges. Our customers always want to be a step ahead, and see Hiab as a pioneering and progressive partner. The feedback from our customer pilots is encouraging and highly valuable, helping to further develop our solutions to bring true value to their businesses”, concludes Jan-Erik Lindfors, Vice President, New Business Solutions, at Hiab.

HiConnect adds to Hiab’s connected solutions portfolio. First out was the ground-breaking and award-winning HiVision(TM) for forestry cranes, which lets the operator control the crane from the safety of the truck cabin, using Virtual Reality goggles, controllers, and connected cameras. With this, it provides precise operation, saves time, and increases comfort and safety.

HiVision for forestry cranes is already commercially available and is proving itself in tough everyday usage with timber customers in multiple countries. Hiab is exploring the development of HiVision for other equipment types and usage scenarios.

Hiab is working intensively on further concepts, and will unveil and showcase more of its Connected Solutions offering in Q3 2017.

For more information, please contact:

Connected Solutions: Jan-Erik Lindfors, Vice President, New Business Solutions,
Hiab tel. +358 50 382 3331, jan-erik.lindfors@hiab.com

Marketing & Communications: Nikolaus Scheurer, Vice President, Marketing & Communications,
Hiab tel. +46 706 00 52 37, nikolaus.scheurer@hiab.com

Norway has issued a blunt threat to Brazil that if rising deforestation in the Amazon rainforest is not reversed, its billion-dollar financial assistance will fall to zero. The leaders of the two nations meet in Oslo on Friday.

The oil-rich Scandinavian nation has provided $1.1bn to Brazil’s Amazon fund since 2008, tied to reductions in the rate of deforestation in the world’s greatest rainforest. The destruction of forests by timber and farming industries is a major contributor to the carbon emissions that drive climate change and Norway views protecting the Amazon as vital for the whole world.

The rate of deforestation in the Amazon fell steadily from 2008 to 2014, an “impressive achievement” which had a “very positive impact” on Brazil and the world, according to Vidar Helgesen, Norway’s environment minister.

But in a forthright letter to Brazil’s environment minister, José Sarney Filho, seen by the Guardian, Helgesen said: “In 2015 and 2016 deforestation in the Brazilian Amazon saw a worrying upward trend.” He warned that this had already reduced Norway’s contributions and added: “Even a fairly modest further increase would take this number to zero.”

Helgesen said he had serious concern that controversial moves in Brazil to remove protection from large areas of the Amazon and weaken the environmental licensing required for agriculture would worsen deforestation. Furthermore, he said, budgets for the environment ministry and other departments that protect the Amazon had been drastically cut. Brazil’s president, Michel Temer, is seen as close to the powerful agricultural lobby, which is pressing for cuts in Amazon protection.

Annual deforestation in the Brazilian Amazon jumped by 29% to 8,000 sq km in 2016, although it remains well below the 19,000 sq km seen in 2005. Norwegian officials say that under the rules Brazil itself set for the Amazon fund, a rise to 8,500 sq km would mean no payments from Norway.

Filho, the son of the top landowner in Maranhão state, has replied to Helgesen. “I have made every effort to maintain the course of sustainability with determination and political will,” he wrote.

Filho told Helgesen that the latest preliminary data suggested the increase in deforestation rate may have levelled off. “[It] indicates that we may have stagnated the upward curve of deforestation. We hope that the new data will soon point to a downward trend.”

Temer is set to face protests in Oslo on Friday from rainforest and indigenous rights campaigners, including Sônia Guajajara, a leader from Brazil’s indigenous movement APIB. She said: “Temer violates his obligations and undermines people’s constitutional rights. His attacks on indigenous peoples and the environment are of a magnitude we have not seen before.”

The Amazon fund currently supports dozens of projects which fight deforestation, work on land regulation and the environmental management of indigenous lands.

Norway itself was criticised by environmental groups on Thursday, after offering oil companies a record number of exploration blocks – 93 – within the Arctic circle. Terje Søviknes, minister of petroleum and energy, said: “New exploration acreage promotes long-term activity, value creation and profitable employment in the petroleum industry across the country.”

Source: The Guardian
https://www.theguardian.com/environment/2017/jun/22/norway-issues-1bn-threat-brazil-rising-amazon-destruction
Photo: Vidar Helgesen, Norway’s environment minister.