Coca-Cola pulls out of Baikal pulp mill project

MOSCOW, April 21 (RIA Novosti) - Coca-Cola has pulled out of an investment project to turn the controversial Baikal pulp mill into a producer of bottled water, the company said Monday.

"Coca-Cola HBC Eurasia carefully analyzed the possibilities and practicalities of converting the Baikal Paper and Pulp Mill into an enterprise producing bottled water as proposed by the Natural Resources Ministry. After expert advice we have concluded ... we cannot fulfill this task," the company's chief spokeswoman said.

The Soviet-era plant, constructed in 1966 directly on the shoreline, bleaches its paper with chlorine and discharges the waste into Lake Baikal, which holds about 20% of the world's total fresh water.

According to a deputy head of Russia's environmental watchdog Rosprirodnadzor, Coca-Cola, which visited the mill to assess the possibilities of converting the site in January, was put off by the required cleanup operation.

"Having seen the overwhelming amount of sludge and rubbish they realized just how much work was needed and considered the project uninteresting for them," Oleg Mitvol said, adding that no other companies willing to buy the Baikal mill have contacted the watchdog.

Continental Management, the company that holds a 51% stake in the Baikal mill, said Coca-Cola has not notified it that it was pulling out. "There have been no correspondence to Continental Management on the issue," spokeswoman Oksana Gorlova said.

Lake Baikal, located in East Siberia, is the deepest lake in the world and home to more than 1,700 species of plants and animals.

Earlier in April, the governor of the Irkutsk Region, Alexander Tishanin, called on the government to remove the pulp mill from the Siberian lake.

"The removal of the facility will be costly. But this cannot be compared with the value of trillions of cubic meters of the purest Baikal water," the governor said.

The Baikal plant has already been involved in a dispute with the Russian environmental regulator which accuses the company of water pollution and working without a license.

Rosprirodnadzor said in late January that contamination of Lake Baikal by the pulp mill would cost Russia 2 billion rubles ($83.9 million) per month.

The plant has promised to switch to a closed water cycle by September 15, submit a planned set of measures to reduce pollution of underground aquifers by April 28 and a draft plan for non-incineration waste disposal by June 28.

The Baikal mill produces 200,000 metric tons of pulp and 12,000 metric tons of paper per year. The mill is owned by the timber industrial company Continental Management (51%), controlled by Russia's richest man, Oleg Deripaska, and the State Property Committee of Russia (49%).

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