The Victorian government cannot rule out more job losses at the struggling Heyfield timber mill, despite finalising a taxpayer rescue of the business.
The Andrews administration said in July it would take over the mill after Australian Sustainable Hardwoods and owner the Hermal Group announced plans for a shutdown starting in August due to cuts in timber supply.
About 200 workers will remain after 24 agreed to take voluntary redundancies, but Industry and Employment Minister Wade Noonan on Friday couldn't rule out more job cuts in the medium-to-long term.
"I'm not going to pre-empt any decisions of the board, but clearly we need to think about this within the context of a reduced volume of timber," he told reporters.
"We want to protect as many jobs as we possibly can."
The mill will run at a reduced capacity of 80,000 cubic metres of sawlogs.
The operators have previously said it would need at least 130,000 cubic metres a year to continue.
The government wouldn't reveal how much it paid for the mill, but it's been suggested the deal could cost more than $50 million.
The government purchased the mill in conjunction with five members of Heyfield's existing management group.
Mr Noonan will be responsible for the transition of the mill's ownership, while a new board made up of government nominees and shareholders will establish a plan for its future.
The opposition demanded the government guarantee no more Heyfield jobs would be lost.
The Greens criticised the government for propping up a "dying" industry, and said the mill buyout was a backward step for native forests and would speed up the extinction of threatened species.
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