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Last Updated: Wednesday, 12 April 2006, 20:23 GMT 21:23 UK
Bank caution on Uruguay mill cash
Greenpeace protest against the pulp mills
Environmental pressure group Greenpeace has joined the protests
The World Bank is still undecided on about $400m (229m) of funding for two controversial Uruguayan paper mills.

It said it won't agree to the funding until it has more information on the potential environmental impact of the facilities on the Argentinean border.

The World Bank's move comes as Argentina continues to strongly oppose the mills, saying they will cause extensive pollution and deter tourism.

Uruguay says the mills are safe and will provide much needed jobs.

Big investment

The mills are being built beside the Uruguay River - which divides the two countries - by Finland's Metsa-Botnia and Spain's Ence.

Together they represent the largest-ever industrial investment in Uruguay.

Environmental-impact experts had earlier told the World Bank's International Finance Corporation private sector investment arm that the plants could be improved in terms of design, operating procedures and enironmental monitoring.

However, they said that fears of widespread damage were "unsupported".

Argentineans opposed to the mills have blockaded roads between the two countries, and environmental pressure group Greenpeace has also held a number of protests.

Greenpeace blocks pulp mill boat
03 Mar 06 |  Americas
River row divides former friends
15 Feb 06 |  Americas
Argentina river row ends in court
26 Jan 06 |  Americas
Country profile: Argentina
02 Dec 05 |  Country profiles
Country profile: Uruguay
23 Nov 05 |  Country profiles

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