Firm halts Uruguay pulp project

More than 1,000 Uruguayans have been working on Botnia's pulp mill

A Finnish firm has announced it will halt construction of a controversial pulp mill in Uruguay for 90 days because of environmental concerns.

The plant is one of two planned mills on the Uruguayan side of a river shared with Argentina.

Local Argentines say the factories will pollute the river and deter tourism.

But thousands of Uruguayans have expressed support for the project, which they insist is safe and would bring much-needed jobs to the country.

The Finnish company Botnia said it would temporarily halt construction work to give Argentina and Uruguay time to debate the issue.

Last week, environmental activists in the Argentine town of Gualeguaychu ended a seven-week blockade of two border crossings.

The decision came after the governments in Buenos Aires and Montevideo agreed to put on hold the building of the mills until an independent environmental study was completed.

The conflict has strained relations between the two normally friendly countries.

Argentina threatened to take Uruguay to the International Court of Justice in The Hague saying its neighbour had broken international treaties over the management of the river.

But the government in Montevideo dismissed the claim.