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A 2010 file photo shows a pair of Mountain Pine Beetles next to a dime. Crew members of the Mountain Pine Beetle crew set a controlled burn to trees in the area that have been infested by the Mountain Pine Beetle. After determining a tree is infested with mountain pine beetle, control crews will fall the tree and cut it into smaller portions to be piled and burned. Mountain pine beetles are attacking the province's pine trees. Left unmanaged, the beetle could devastate Alberta's pine forests and spread eastward across Canada's boreal region.Chris Bolin/The Globe and Mail

Canfor Corp., will permanently close its sawmill in Quesnel in British Columbia's Cariboo region due to lack of timber.

The company says 209 employees will be offered positions elsewhere in the company when operations in the Cariboo are shut down next March.

Canfor president Don Kayne says dwindling timber supply because of the mountain pine beetle infestation means the company is unable to continue running the mill.

The Vancouver-based company has entered into an agreement with West Fraser Mills for an exchange in forest tenure rights.

It's exchanging 382,000 cubic metres of replaceable forest licence allowable annual cut in the Quesnel timber supply area and nearly 54,000 cubic metres of replaceable forest licence allowable annual cut in the Morice timber supply area.

A statement from Canfor, which primarily produces softwood lumber, says the companies are also exchanging non-replaceable licenses and undercut volumes.

Kayne says the additional fibre the company has secured in the deal with West Fraser enhances the fibre requirements for Canfor's facility in Houston.

Meanwhile, a press release from West Fraser cited the pine-beetle infestation in a decison to close its Houston mill. The company said it would assist employees in transitioning to other operations in B.C. and Alberta.