Integrated forestry company Gunns Limited (ASX: GNS) today announced the Federal Government had granted the final environmental approvals for the proposed Bell Bay Pulp Mills, estimated to require some $2.5 billion in investments.

The fully plantation timber-based mill now has all approvals necessary for construction and operation. Gunns Managing Director Greg L'Estrange said in a statement.

Environment Minister Tony Burke told reporters in Canberra today he has "approved the remaining modules that are required for the environmental approval process for the pulp mill.''

Mr Burke said there were crucial standards and modules focusing on the discharge of wastes from the pulp mill that have to be addressed by Gunns

Mr. L'Estrange noted that the approvals received today will be crucial to the company's capital funding requirements to commence construction.

"It is confirmation that the mill's design and operation must meet stringent environmental standards," he said. "

Gunns has heard community concerns around the mill project since its original approval in 2007, and has attempted to address these concerns. Fundamental to this has been the adoption of a 100 per cent plantation strategy and the adoption of the latest bleaching technology, the ECF Light process, which has allowed a significant reduction in chlorine dioxide usage.

"We will continue to work with the community on transparency, operational improvements and a comprehensive monitoring program that can provide greater and continuing confidence to the community on a balanced outcome of environmental, economic and social outcomes," he added.

Mr. Burke noted that the company would need to treat effluents to be discharged in the bay and improvements would be made on the contract if it will be for better environmental standards.

Gunns is continuing a due diligence process with potential equity investors in the mill.

Shares of the publicly listed Australian firm moved up as much as 13 percent after trading resumed this afternoon, before ending the day up 4 cents, or 6.7 percent, to 63.5 cents per share.