It's no longer news that rising commodity costs (such as oil) have been making alternative commodity sources (say, like tar sands) increasingly cost-effective.

But it is news when the reverse happens.

A paper mill in the central Canadian province of Manitoba is no longer accepting paper for recycling because the price of newsprint has dropped so low that it's no longer cost effective to recycle.

Instead, the mill plans to simply cut down trees to make its paper.

A memo earlier this month, obtained by Recycling Today, from the Tembec (TSE: TMB) mill in Pine Falls, Manitoba to its suppliers said the company will no longer accept the 100 tonnes of recycled paper it had been de-inking and processing every day.

Neither pines nor falls are visible in this photo of Tembec's Pine Falls plant.

The company blames media for becoming increasingly electronic (um, whoops!). Specifically, as more people read their news online, the price of newsprint to make papers has plummeted, Tembec said, and it's cheaper to use new trees to make paper.

Some 200,000 more trees each year are now to be consumed by the mill, undermining arguments by electronic media that their operations save trees.

Yet, as a significant North American forestry company, expect that the company will be held to replanting those trees, of course.

The Tembec mill was the largest paper recycler in the province. Manitoba recyclers are now preparing to ship old newspapers outside the province.

"It's important that things be recycled as close as possible to where they're used and where the material is produced," said Randall McQuaker with Resource Conservation Manitoba. "Shipping stuff long distances really reduces the net environmental benefit of recycling."

Canada-based Tembec is a large forest products company, with operations in North America and France. The company has sales of approximately $3.5 billion and some 8,000 employees. While traded on the Toronto Stock Exchange, it recently recapitalized and has announced plans to de-list.