On Wednesday 1 December 2010, 11:36 EST
Forestry Tasmania says it does not want to buy Gunns' woodchip mill at Triabunna but is open to being part of a consortium if one proceeds.
Gunns is exiting native forest logging and has announced it will close several of its Tasmanian mills.
But the timber giant has told shareholders its Triabunna mill will keep operating for the time being.
The chairman of Forestry Tasmania, Adrian Kloeden, has told a parliamentary hearing the mill was a critical piece of infrastructure that must stay open even though his operation did not necessarily want to buy it.
"We at Forestry Tasmania might have been the first to identify the need to keep Triabunna at least in the short term but it doesn't mean that Forestry Tasmania wants to own or operate it," he said.
"In fact we would be reluctant to take that role.
"We are encouraged that a consortium of family sawmillers, forest managers and timber processors have met to consider how they can step in to operate woodchip facilities."
Mr Kloeden concedes that if the consortium proceeds, Forestry Tasmania could be a part of it.
Forestry Tasmania says a deal to phase out most native forest logging in Tasmania is not achievable without its input.
The historic agreement between the ailing forest industry and environmentalists was signed in October.
Forestry Tasmania is not a signatory to the deal.
Mr Kloeden told the hearing it must play a role in implementing the Statement of Principles.
He says it knows more about the state's native forests than any other organisation and change in the industry is inevitable.