Jobs at the Shoalhaven Paper Mill will be lost and operations scaled back if the federal government does not commit to buying more paper from the business, the employees' union says.
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The closure of parts of the mill could mean documents such as passports and birth certificates, now made at the Shoalhaven mill, would be made overseas.
The Shoalhaven Paper Mill is the only Australian producer of security grade papers used to make Australian passports and birth certificates.
The CFMEU's Pulp and Paper Workers Nowra Sub-Branch secretary Jack Evans - who has worked at the Shoalhaven Mill for 20 years - said a decline in the printing sector had led to a reduction in the mill's customers.
He called on the government to commit to buying 100 per cent of its watermark and security needs from the Shoalhaven mill to ensure the future of the operation.
"At the moment we're struggling with orders for here - we don't make enough passport paper and security paper to sustain the mill," he said. "We need the government to urgently commit to purchasing approximately 20,000 tonnes of paper from our mill in order to save it."
There are about 75 people working at the mill, and Mr Evans said at least 21 jobs would go by the end of the year if nothing changed.
It would also mean the end of production at the mill, which also receives product from Maryvale mill in Gippsland.
Member for Gilmore Ann Sudmalis said she was looking into whether the government could purchase additional paper from the mill.
"I will be trying to get an email away today to the Treasurer to find out what the rules are about procurement."
She said producing high grade security papers and passports are the mill's absolute strength.