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Representatives of the three parties, the state development agency and Oregon-based Timber Products Co. met in Juneau last week to discuss the possibility of reopening the plant, which closed in February 2001, one month after it opened.

"We got affirmation from Timber Products that they're still very interested in the possibility of opening the plant," said Jack Phelps, special assistant to Gov. Frank Murkowski. "The big hurdle, to be very blunt, is timber supply."

Sealaska Corp. has said it could provide 8 million to 10 million board feet a year for the veneer plant, Brink said. That leaves the Forest Service to make up the 25-million-board-foot difference. In order to provide that much wood, loggers would have to harvest 125 million board feet, Brink said. The Forest Service tries to sell 70 million to 100 million board feet per year, but in recent years only 30 million to 50 million board feet have been harvested, he said.

Brink said the Forest Service intends to sell 100 million board feet this year and another 100 million next year.

"We're very hopeful we'll be creating a supply that will provide confidence in the industry for saw mills to increase their production," he said. "Once they increase their production, there's more harvesting that occurs, and it creates more grade No. 2 logs."

Roy Eckert, manager of the Ketchikan Gateway Borough, which owns the plant, said the borough is interested in selling the plant to the Alaska Industrial Development and Export Authority.

"There's about a $3 million price tag on some upgrades of equipment and things that have to be available," Eckert said. "That's pretty much what we're looking at right there just to get an operator in."

Eckert estimated the plant would provide about 45 direct jobs, and said a sale could occur by the end of the year.

The borough bought the plant at auction after its previous owner, Gateway Forest Products Inc., went bankrupt.

Jim McMillan, deputy director of credit for AIDEA, said the agency is interested in leasing the veneer mill to Sealaska, which would provide wood, and Timber Products, which would operate the mill. McMillan said previous discussions on the purchase stalled over the issue of obtaining permits from the Environmental Protection Agency for storage of large rafts that hold the logs before they are moved to the mill. Storing the logs on land would be more expensive. But McMillan there's still no guarantee the permits will be obtained.

Rick Harris, Sealaska's senior vice president for resources, was traveling Tuesday and could not be reached for comment. Officials from Timber Products were unavailable for comment.