JOHN DAY, Ore. — A logging company is floating a plan to save the town’s floundering lumber mill but says it needs government backing to make the deal pencil out.

Iron Triangle LLC has signed a letter of intent with Prineville-based Ochoco Lumber to explore the possibility of buying Malheur Lumber, the John Day sawmill that is in the process of shutting down. The deal would include Restoration Fuels, a torrefaction/biochar/pellet fuel facility on the mill site that closed on July 15.

Under the plan, Iron Triangle would operate the sawmill and contract with an outside entity to run the torrefaction plant. 

The proposal, outlined in a white paper being circulated to government officials, does not specify a purchase price for the transaction. However, it calls on the federal government to provide a package of grants and loans to cover some of the costs of the deal. It also asks for state assistance in the form of workforce development and other programs.

Iron Triangle spokesperson King Williams declined to provide specifics about how much money the company is willing to put into the transaction or how much federal and state assistance it is seeking, saying those details were being negotiated.

Williams said the white paper should speak for itself.

“At this time,” he added, “Iron Triangle has no further comment.”

Ochoco Lumber, Malheur’s parent company, announced on July 23 it would permanently shutter the John Day sawmill after it finished working through the logs it had on hand, a process expected to be completed late this year or early in 2025.

Company officials cited multiple factors in the decision to scrap the 41-year-old mill, including a shortage of willing and drug-free workers, a lack of housing to recruit employees, poor market conditions for lumber, rising manufacturing costs and burdensome government regulations.

The announcement sent shock waves through Grant County’s 7,200 residents, who have watched the once-thriving local timber industry contract for decades under pressure from federal logging restrictions and other forces.

The Prairie Wood Products sawmill in Prairie City, which reopened in 2022 after a 15-year hiatus, laid off most of its staff on March 1 and has yet to reopen. The only other wood products manufacturing facility in the county is Iron Triangle’s post and pole plant in Seneca, which makes fenceposts and other products from small-diameter logs.

The Oregon Employment Department is September released an analysis that estimated the closure of Malheur Lumber would have economic ripple effects far greater than the loss of the mill’s 76 jobs and annual payroll of $4.5 million.

Altogether, the analysis found, shutting down the sawmill would take 207 jobs and $58 million out of Grant County’s economy.

Building on that analysis, the Grant School Board calculated the mill’s closure would lead to the loss of at least 60 students as impacted families opted to leave the area, costing the district more than $700,000 annually in state and federal support while triggering staff layoffs and cutbacks to athletic and academic programs.

The school district and the Grant County Chamber of Commerce have called on government leaders to take action to keep the mill running, and Oregon’s U.S. Sens. Jeff Merkley and Ron Wyden have asked the U.S. Forest Service to provide financial assistance to Malheur Lumber.

The white paper, a copy of which Iron Triangle provided to the Blue Mountain Eagle and is attached to the online version of this report, attempts to make the case for government assistance to help the private logging firm purchase Malheur Lumber.

The five-page document outlines a history of public-private partnerships — including some involving Iron Triangle — that it says have helped keep the struggling timber industry afloat in the southern Blue Mountains while meeting forest restoration goals on federal lands in the region.

It also cites the potentially devastating economic impacts to Grant County if the mill shuts down and argues Malheur Lumber has been a crucial component in Iron Triangle’s stewardship work with the Forest Service to restore forest health and reduce wildfire risk in the region.

“Indeed, the benefit of this work was clearly demonstrated in the 2023 Black Butte, 2024 Falls, Upper Pine and Telephone fires; these wildfires started in untreated areas and burned with high severity until the fires moved into areas that had been treated, where the fires changed behavior and severity and produced the types of restorative effects we intended,” the white paper states.

“Without a mill to process the byproducts of restoration that led to these results, our forests and the communities that depend on them will suffer socioeconomically and will be at increased risk from catastrophic wildfire.”