MERCER INTERNATIONAL INC

We have continued to make capital investments designed to increase pulp, green energy and chemical production, reduce costs and improve efficiency and environmental performance at our pulp mills. The improvements made over the years have increased the competitive position of our pulp mills. Since the acquisitions, we have also made capital investments to optimize sawmill production at the Friesau mill and Torgau facility.

The following table sets out the total capital expenditures by segment (excluding any related governmental grants) for the periods indicated:

(1)

Includes expenditures to rebuild the wood chip conveying systems at the Stendal mill which were damaged by a fire in 2022. The rebuild was financed with insurance proceeds, of which $12.2 million was received in 2023.

In our pulp segment, capital investments at the Stendal mill in 2024 and 2023 primarily related to completing the rebuild of the wood chip conveying systems that were damaged by fire in 2022 and other maintenance projects.

Capital investments at the Rosenthal mill in 2024 primarily related to the purchase of a digester evaporator and maintenance projects. In 2023, capital investments at the Rosenthal mill primarily related to completion of the lignin plant and maintenance projects.

Capital investments at our Canadian pulp mills in 2024 primarily related to enhancements to soot blowers at the Peace River mill and for both mills, improvements to the wood rooms and maintenance projects. In 2023, capital investments at the Peace River and Celgar mills primarily related to wood room upgrades and maintenance projects.

In our solid wood segment, capital investments in 2024 at our Torgau facility primarily related to log yard improvements and sawing and planer machine upgrades. For the Friesau facility, capital investments in 2024 primarily related to sorter line upgrades and maintenance projects. For our mass timber facilities, capital investments in 2024 primarily related to production and sorter line upgrades. In 2023, capital investments primarily related to optimization projects, including sorter line upgrades at our Friesau mill and Mercer Spokane facility, log yard improvements at our Torgau facility and other maintenance projects.

Qualifying capital investments at industrial facilities in Germany that reduce pollutants in the effluent discharge can be used to offset wastewater fees that would otherwise be required to be paid. For more information about our environmental capital expenditures, see “– Environmental”.

In 2025, excluding amounts being financed through government grants, we currently expect our total capital expenditures to be approximately $100.0 million to $120.0 million, principally comprised of maintenance projects at our pulp mills and sawmills and optimization projects, including upgrades to the wood room at the Celgar mill, the digester evaporator at the Rosenthal mill, the sorter line at the Mercer Spokane facility and log yard improvements at both the Friesau facility and Torgau facility.