The owner of Australia's last white paper mill is suing a state government over an alleged contract breach that permanently shut down production.
Opal, the operator of the Maryvale Mill in Victoria's La Trobe Valley, launched a lawsuit in the Supreme Court on Monday seeking $402 million in damages from the Victorian government.
Its statement of claim accuses the state government of breaching an agreement, entered into with the mill's former owner Amcor Limited in 1996, to supply pulp wood.
The agreement was not due to expire until June 30, 2030 but was ripped up after the state government announced native logging would end on January 1, 2024.
Opal terminated the supply agreement two days after the announcement in May 2023 over a "breach or an anticipatory breach", the court document alleges.
In November 2022, the Supreme Court ordered state-owned logging business VicForests to scale back its timber harvesting in parts of East Gippsland and the Central Highlands, where two endangered possum species live.
Opal alleges the government advised the now-defunct VicForests would be unable to fulfil its contractual obligations and delivered a reduced supply that financial year.
Production workers were stood down and the Maryvale mill, which opened in 1937, produced its last ream of white copy paper in January 2023.
The closure of white pulp and paper production led to the loss of more than 400 jobs and caused the company, owned by Japanese multi-national Nippon Paper, to suffer "substantial loss and damage".
In a statement, Opal said it had sought to reach a negotiated outcome with the Victorian government to no avail after three years of discussions.
"Opal has been left with no choice but to proceed with a court-determined outcome for the damages owed to it by the Victorian government," it said.
"Opal hopes that ... the matter will be determined fairly and in a timely manner, providing resolution not only for Opal and the Victorian government, but also for the Maryvale Mill, the Latrobe Valley, and the wider Victorian community."
In 2019, then premier Daniel Andrews said a $120 million industry support package would safeguard jobs at the mill after announcing a ban on native forest logging by 2030.
The ban was brought forward six years alongside a $200 million transition package for workers, with the government blaming court decisions and the sustained risk of continued third-party litigation.
The Victorian government has been contacted for comment.
