ESPANOLA—Hopes are on the rise that the offer to purchase the Domtar paper mill in Espanola made by BMI Group will lead to yet another new chapter in the life of the storied facility. The mill, which has been idled since 2023 (although kept viable in caretaker mode with a 34-member skeleton crew), has been on the market ever since the vast majority of the plant’s 450 workers were permanently laid off in November of that year.
Espanola Mayor Doug Gervais said that the proposed deal is “a hopeful situation for the community, for sure.” Mayor Gervais first met with the BMI Group a few weeks ago and said that he was comforted with that company’s vision for the property. “It’s been idle for a year-and-half and it’s a light at the end of the tunnel for us. Sitting there doing nothing is not good and the longer it sits, the worse it gets.”
BMI Group, an business whose expertise is in brownfield development, is currently awaiting regulatory permission to acquire the shuttered Espanola pulp and paper mill from Domtar. In a news release from the developer, the BMI subsidiary Bioveld North announced it has signed an asset purchase agreement with the mill owners. There is no published timeline on when the sale will be completed as the sale is subject to standard regulatory approval—no purchase price was included in the release.
The proposed sale includes the 16-megawatt hydroelectric generating plant and dam that feeds into the provincial power grid and BMI said it is committed to investing to extend the operating life of both of those assets.
“We look forward to working closely with the Town of Espanola, neighbouring Anishinabek communities, as well as federal and provincial governments to realize the competitive advantages of this remarkable region,” said BMI Group CEO Paul Veldman in a news release announcing the proposed deal, adding that, “The knowledge and skills of the people here are second to none. Their expertise will be critical in shaping the next chapter.”
The BMI Group is headed up by three brothers of the Veldman family, John, Justus and the aforementioned Paul, and markets itself as a real estate development and revitalization firm specializing in adaptive reuse and repurposing of old industrial and commercial properties—generally referred to as “brownfields.”
The Domtar property will add to BMI Group’s extensive holdings that include paper mill sites in Iroquois Falls, Fort Frances as well as the former Norampac cardboard plant in Red Rock. This is not the first Domtar purchase for BMI, as the company previously acquired another shuttered Domtar paper mill in Port Huron, Michigan and yet another mill in Baie Comeau.
The Red Rock mill closure sent shock waves through the North Shore of Lake Superior when it was announced in 2006, but since then BMI has been working on community development plans that would see upgrades to the housing stock in that region, while revitalizing the adjacent harbour in collaboration with the Red Rock Indian Band and a mining company—aimed to place a lithium refinery on the cleared mill property.
BMI has a number of successes under its belt in redeveloping brownfield properties, having successfully convinced a Japanese electric vehicle battery supplier in 2024 to build a $1.6-billion lithium-ion battery separator plant on one of its properties in Port Colborne. BMI was awarded for its repurposing of a former Thorold mill into a “multi-modal facility.”
While it is unlikely that the former Domtar site (which was first established in the late 1800s) will return to being a pulp mill as much of that infrastructure at the site has aged out, Mr. Veldman has said the mill site still has value. BMI’s vision, he said, is to transition the site into a “bio hub,” that would leverage value-added technology into a space that could produce biofuels from wood fibre.
Mr. Veldman has indicated that BMI Group is in conversations with several technology providers with an eye to grouping them together so they can share the infrastructure the Domtar site would be able to offer as a bio-hub facility. It is a model that has already proven successful for the company, as Char Technologies, which produces a bio-coal product derived from scrap wood for the steel industry is currently operating at BMI’s Thorold site.
BMI eventually hopes the Espanola mill site will host 20 tenants with focus on the burgeoning bio-fuels sector. Although many of the mill’s pulp-oriented buildings are slated for eventual demolition, others, such as the warehouse facilities, remain in good condition, a factor Mr. Veldman largely attributes to the work of the caretaker crew.
Should the deal be approved, among the first order of business will be the upgrading of the power facilities—work that is currently already ongoing. The mill has a power agreement with Ontario Power Generation.
In any event, Mr. Veldman assured that there would be ongoing consultation with the Espanola community—something the company has come to realize is an integral part of ensuring such project’s success—and they are taking a “whole community approach” by establishing a joint commission comprised of local municipalities, area First Nations and government stakeholders.
“You see opportunity, but opportunity isn’t real if it means not everybody’s bought into it,” he said. “We’re learning that every day.”
