Pulp takes a beating

The construction of two controversial eucalyptus pulp mills on the Argentina-Uruguay border has been halted to resolve a diplomatic crisis over environmental safety.

The presidents of the two countries met on March 11, 2006, following which the decision to halt the construction for 90 days was taken. The two mills -- Finnish Metsa-Botnia and Spanish Ence -- are coming up on the Uruguay side of Uruguay river that borders the two countries. Argentina too, agreed to suspend the months-long roadblocks across the river that Uruguay claimed was badly hurting its economy. The us $1.7 billion project is Uruguay's biggest industrial investment.

The construction of the mill had led to demonstrations by Argentines and environmentalists on concerns about contamination of the river and the impact on tourism and fishing.

Meanwhile, Metsa-Botnia has said it will continue to build the pulp mill pending a formal request from Uruguay. The Uruguay government is hoping for a "gesture" from Mets-Botnia for a way out of the impasse.