Temiscaming, Quebec – Tembec today announced the permanent closure of its newsprint mill located in Pine Falls, Manitoba. The mill had been indefinitely idled due to a labour dispute on September 1, 2009. After examining a full range of options, the Company initiated a sales process for the mill in early January 2010. This sales process has proved unsuccessful. After a thorough analysis of the situation, the Company concluded that the permanent closure of the facility was the only viable option. Approximately 230 employees will be affected.

"Although not an easy decision to make, the structural decline of the newsprint market and the cost structure of the mill prompted such a decision," said Chris Black, Tembec's Executive Vice President and President, Paper Group. "The Company intends to act in a manner that will ensure that employees receive their severance pay in accordance with the collective agreement."

As a result of this announcement, a net charge of approximately $8 million related to the closure will be recorded in the quarter ending September 25, 2010.