Officials at Sagkeeng First Nation are crunching the numbers to see whether they should put in an offer to buy the Tembec paper mill in nearby Pine Falls, Man.

Mike Fontaine, who heads Sagkeeng's economic development office, said the First Nation is seriously looking into whether the recently closed mill, about 130 kilometres northeast of Winnipeg, could be a feasible operation.

"We're actively exploring our options, and if it's in our best interest to actively pursue making an offer, then that's something that we'll look at, definitely," he said.

If it is determined the mill could still make money, Fontaine is certain the financing would be there to make an offer to Tembec.

Sagkeeng First Nation is about 30 kilometres north of Pine Falls.

The mill has been idle since Sept. 1 when Montreal-based Tembec locked out about 250 unionized staff.

Contract talks between the United Steelworkers union and the company began Aug. 13, but the two sides were unable to reach a deal. Although they continued talking after the lockout, negotiations definitively came to a halt in October.

The company has been saying it needed a "significant reduction" in labour costs at the paper mill to keep it competitive as demand for newsprint has fallen.

On Tuesday, Tembec officials announced they have decided to sell the mill rather than reopen it. If a buyer isn't found, the mill could be closed permanently.

John Valley, executive vice-president of business development at Tembec, said Tuesday that the company was hoping the operation would survive an industry-wide downturn.

"What we were endeavouring to do was establish a position of cost-competitiveness for the Pine Falls mill that would allow it to be one of the survivors [in the industry]," Valley said. "We were unable to achieve that very necessary improvement in the cost structure of the mill."

The union has said it was willing to accept wage cuts, but sticking points in negotiations were pension plan changes and severance pay.

In the wake of Tuesday's announcement from Tembec, the Manitoba government announced it has set aside $1 million for a "community adjustment committee" to set up projects that will aid workers heading into an uncertain future.

Closure cheered by environmental group

At least one environmental group is pleased the mill might close.

Eric Reder, campaign director for the Wilderness Committee, said the coal-powered plant has been one of the largest sources of pollution in Manitoba for 80 years.

While his group sympathizes with employees who have lost their jobs, Reder criticized the Pine Falls mill for emitting high levels of carbon monoxide, sulphur dioxide, phosphorous and other toxins since it opened.

Tembec's decision to sell the plant moves Manitoba a big step closer to a healthier environment — even if it repoens, he added.

If the plant is reopened with a new owner, it will be required to meet stricter conditions to prevent pollution and protect Nopiming Provincial park and the woodland caribou in the area.

"This is wonderful news for our province. Literally, Manitobans will be breathing easier from now on," said Reder.

Tembec was exempt from such laws because the plant existed long before the legislation came into effect he noted.

"Tembec's mill has been grandfathered to allow things we now consider appalling, from logging in Nopiming to environmental and workplace health conditions resulting from operating antiquated equipment from the 1920s."