06:23 AM EDT, 08/21/2024 (MT Newswires) -- Conifex Timber ( CFXTF ) late on Tuesday said it is reducing its sawmill operating schedule at its Mackenzie, British Columbia site to one-shift and temporarily curtailing its power plant, both starting on Aug. 26.

The company cited "imminently expected" transportation challenges affecting all Canadian lumber producers in its decision to update its Mackenzie operations.

The challenges stem from Canadian National Railway formally notifying the Teamsters Canada Rail Conference union that it will begin locking out union workers early on Aug. 22. The union issued a 72-hour strike notice to Canadian Pacific Kansas City Rail.

The reduced operating schedule will continue for the foreseeable future while the power plant curtailment is expected to end by Sept. 30, if there is a near-term resolution to the transportation challenges.

Conifex expects the power plant curtailment to impact power production capacity by about 24.6 gigawatt-hours. The company did not quantify the impact of the reduced operating schedule on production capacity.

Additionally, the Minister of Forests has prescribed an 18.4% reduction of allowable annual cuts (AACs) of replaceable forest licenses to align harvest levels to the current AAC.

Effective Aug. 19, the AACs of Conifex's Forest Licence A15385 and Forest License A93631, in which Conifex owns a 50% interest, have been reduced by 117,172 cubic meters and 55,576 cubic meters, respectively.

The new AACs for the licenses are 515,328 cubic meters and 244,424 cubic meters, respectively, or a total available sawlog supply of 759,752 cubic meters annually.

As a result, Conifex's internal timber supply will account for a slightly lower portion of sawlog consumption, while open market sawlog purchases will account for a slightly higher portion.