GRANGEVILLE - Workers at the Blue North Forest Products mill at Kamiah were notified by letter Tuesday that the mill has been purchased and will be shut down and dismantled.

The letter from owner Michael F. Burns, who operates Blue North Fisheries in the Seattle area, confirmed rumors that began circulating Friday about the purchase of the Kamiah mill by Idaho Forest Group.

"This past year has been very difficult in the lumber business," Burns wrote to employees. A copy of the letter was provided to the Lewiston Tribune.

"It has been especially poor for Blue North. We have had problems trying to buy enough logs to keep the mill busy, and the lumber markets were driven to new lows by cheap Canadian imports," he wrote. "I tried to keep the business going as long as I could until it became apparent that I couldn't sustain any more losses."

Herb Hazen, manager of the Kamiah mill, confirmed the operation has tentatively been purchased by Idaho Forest Group and said the company is in the process of "doing due diligence," meaning looking over the property.

Hazen said there are about 65 employees of the mill, but he could not comment on their future employment status.

Messages for comment from Idaho Forest Group were not returned Tuesday.

In his letter, Burns wrote, "The mill has gone through some tough times over the years. ... I'm sorry to tell you that this is the end. I'm deeply disappointed that the mill's demise has to take place on my watch. The new owners plan to dismantle the mill."

The Blue North mill opened for business in August 2010 on the site of the former Three Rivers Mill. In 2008, the former owners of Three Rivers Mill, William E. and Shirley Mulligan, defaulted on millions of dollars in loans from Wells Fargo Bank because of a depressed lumber market and more than 100 people lost their jobs.

The mill was forced into receivership and the receiver, Inverness Inc. of Portland, Ore., tried to auction the mill for a minimum of $6 million. There were no takers.

The plan was to sell the mill equipment and other assets piecemeal when Burns stepped in and bought the business for $2.65 million, averting a permanent closure.

In his letter to Blue North mill employees, Burns said he knew nothing about the sawmill business when he bought the business but was "smitten by the beauty of the area and the connection of the mill to the Kamiah community. ...

"I felt an affinity for the wood business and the work culture of a mill town with a history going back to the 1940s."

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Hedberg may be contacted at kathyhedberg@gmail.com (208) 983-2326.