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Smoke rises from the Abine Forest Products mill in Burns Lake, B.C. Saturday, Jan. 21, 2012.

In a move hailed as a signal that the B.C. forest industry is finally on the rebound, the owners of the Burns Lake sawmill, destroyed in a deadly explosion last January, are starting to rebuild.

The decision announced Tuesday by the mill's owner, Hampton Affiliates, was met with jubilation in the community of Burns Lake. The company has already started pouring the foundation and expects to reopen early in 2014. The new mill will be smaller and offer fewer jobs, but still promises to be the economic lifeblood of the Northern Interior community.

"Since the tragedy on Jan. 20, the town of Burns Lake has been under a cloud of despair," said Al Gerow, chief of the Burns Lake Indian Band, a partner in the mill. "This is fantastic news. Without this, we would be nothing more than a gas stop on the road to Prince Rupert."

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There was relief, too, that the company's board of directors did not balk after learning last week that the cause of the explosion could still result in hefty fines – even jail time. An investigation by WorkSafe BC, the provincial workplace safety authority, has been handed to Crown counsel to determine if civil charges should be laid.

Two workers were killed and 20 injured when an explosion ripped through the mill. The cause has not been identified, but preliminary findings and subsequent cleanup orders from WorkSafe BC point to a buildup of fine sawdust in enclosed spaces.

Steve Zika, CEO of Hampton Affiliates, said the WorkSafe BC report made an already difficult investment decision tougher. "We still don't have an answer about the actual cause," he said. He promised the new mill will incorporate the latest in dust extraction technology, and the company is working on better cleanup routines at its existing mills.

He would not say how much the new mill will cost or how many jobs will be available. As well, the details of the timber supply are still not complete. "There is a certain amount of faith and trust here," Mr. Zika said. "Nobody knows exactly what the timber supply will be. The B.C. government is still doing its inventory."

But in the end, he said, the board decided that there is a business case to rebuild in Burns Lake. After years of tough times – from the softwood lumber dispute to the mountain pine beetle devastation to the collapse of the U.S. housing market – things are looking up. "For the survivors, I think the future is very bright," he said.

B.C. Forests Minister Steve Thomson agreed. "We've come through one of the toughest downturns we've ever gone through in this sector," he said in an interview. "We are starting to see the positive signs – I would say there is a cautious optimism."

The investment decision follows a string of new capital projects. Canfor's sawmill in Radium Springs, which was shuttered for three years, has reopened with $38-million spent on upgrades. West Fraser has announced plans to invest millions on its planer mill in Williams Lake. And Western Forests Products has spent almost $45-million on two mill upgrades on Vancouver Island.

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In the case of the Burns Lake mill, however, the key was a commitment to deliver a long-term supply of wood to a mill at the epicentre of the mountain pine beetle epidemic.

Mr. Thomson said the deal came together because local first nations signalled their intent to use their forest licences to feed the mill and because lumber prices are rising. But it also required a better outlook for the industry.

"Availability, pricing, partnership – it all contributed to this decision," he said.

Amid the cheering, however, the small community is still grieving. "This announcement to rebuild the sawmill will be an opportunity for the community to celebrate," Mr. Gerow said. "But with the loss of life, it will still take time to heal."

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