PORT ANGELES — Workers are dismantling long-dormant equipment at the McKinley Paper Co. mill to make way for $6.1 million in improvements as the company looks toward reopening the plant by Dec. 31.

The factory was shuttered in April 2017 by Nippon Paper Industries USA, putting 150 employees out of work.

McKinley will hire about 100 workers and is collecting applications, General Manager Edward Bortz said last week.

The company will participate in an Oct. 2 job fair in Port Angeles to generate more interest.

Bortz said the new equipment includes a pulper for processing recycled cardboard into heavyweight bag-grades of paper and corrugated fluting for box liners.

“We’ve got people here working on it right now,” Bortz said Thursday.

“Everything is proceeding. We’ve got our permit from the city, we’ve got our environmental permits, we are getting construction going and getting the hiring going, and everything is coming together.”

The city of Port Angeles approved an industrial-remodel building permit for the project Aug. 15 so a kraft paper pulper and related pulp processing equipment can be installed.

McKinley, the New Mexico-based American subsidiary of the Mexican paper company Bio Pappel, was assessed $40,000 in permit and plan-check fees.

The Olympic Region Clean Air Agency (ORCAA) approved a notice-of-construction air-quality permit for the project Tuesday.

ORCAA’s decision (tinyurl.com/PDN-OrcaaPermit) can be appealed to the Pollution Control Hearings Board by Sept. 27.

ORCAA and the state Department of Ecology sponsored an Aug. 1 public hearing on the permit in Port Angeles.

Six people raised concerns on the project during the hourlong hearing at the county courthouse that ORCAA responded to in writing (tinyurl.com/PDN-PermitComments).

In response to Port Angeles resident Marolee Smith’s query on “what chemicals will be released,” she was referred to a table in the Notice of Construction.

Emissions emitted by the recycle pulp plant and two paper machines include formaldehyde, chloroform, methanol and toluene.

The cogeneration boiler will emit nitrogen oxides controlled by a noncatalytic reduction system and acid gases and particulates controlled by an electrostatic precipitator and a condensing economizer.

“Laws and regulations in Washington do establish acceptable levels of increased health risk from new projects,” ORCAA said in its response document.

“McKinley’s air emissions were evaluated by the Washington Department of Ecology and found to be within these acceptable levels.

“The maximum increase in cancer risk allowed is 10 in one million.

“The maximum increased cancer risk from McKinley’s proposed mill upgrades was determined to be 0.9 in one million at neighboring commercial properties.

“The maximum increased cancer risk to the Port Angeles community was determined to be 0.02 in one million. Both results are well below the acceptable maximum of 10 in one million,” ORCAA said.

In addition, ORCAA concluded that “odors from the project will not be detectable off the property of the mill site.”

ORCAA Executive Director Fran McNair approved the permit in her capacity as hearings officer for the application.

“We all said they were good to go,” McNair said Thursday.

“I’m hoping people will like what they are doing, and I think they are doing a good job.

“They are taking out the old pulper and putting in a new pulper, they are making the cogeneration boiler more efficient and reducing the amount of effluent in the wastewater pond by recycling the fluid,” McNair said.

“They are doing some really good things in terms of using all recycled material.

“They are not cutting down trees, and they are doing a nice job for the environment.”

The recycle pulp plant also will not bleach pulp.

The new recycle pulper will increase production from 700 oven-dried tons of pulp daily to 900 tons, according to the permit.

Gross production of paper grades will increase from 800 to 840 air-dried tons daily.

“McKinley’s increased emissions will not likely contribute to long- or short-term health hazards in the community,” Ecology said in a report on the project.

McKinley will decommission two cooling towers that were used for producing steam and electricity at the cogeneration facility.

McKinley purchased the plant from Japanese-owned Nippon Paper Industries USA in 2017 for $20.6 million, including the $91 million biomass cogeneration plant that Nippon completed in 2013 after initially estimating it would cost $71 million.

After it was installed, the cogeneration facility’s cracked biomass boiler spurred competing breach-of-contract lawsuits between Nippon and the manufacturer, Louisiana-based FSE Energy.

The lawsuit was settled. The settlement terms were confidential.

The cogeneration plant will produce 9.5 megawatts of electricity, half the design rate of the existing steam turbine, which is being replaced.

Asked if McKinley will sell surplus electricity, Bortz responded, “We’re still working on those plans.”

McKinley also is decommissioning a tub pulper that ORCAA approved for Nippon in 2015.

Bortz said McKinley officials hired several new workers at a hiring event July 11 sponsored by WorkSource of Clallam and Jefferson Counties and the Port Angeles Regional Chamber of Commerce.

Several applicants were invited to take a training course at Peninsula College.

Employees will be paid under a five-year labor contract signed this spring with the Association of Western Pulp and Paper Workers, Bortz said.

“We filled a lot of key roles, but we still will have other positions available,” he said.

McKinley also will take applications Oct. 2 at a job fair sponsored by WorkSource and the chamber at the Vern Burton Community Center, 308 E. Fourth St., in Port Angeles.

McKinley Human Resources Manager Peter Johnson said the company has openings for experienced paper machine operators, electrical-instrumentation technicians and multicraft mechanics.

“We have lesser skilled positions,” Johnson said.

Potential applicants should call Patrice Varela-Daylo, a WorkSource business services specialist, at 360-417-2128, for more information.

By Friday, about a half-dozen potential employers responded to inquiry letters for participating in the Oct. 2 job fair, Varela-Daylo said Friday.

McKinley will have its own closed off space to talk with applicants, she said.

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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at pgottlieb@peninsuladailynews.com.