MONTEVIDEO, May 3 (Reuters) - Finnish pulp and paper maker UPM said on Wednesday it is moving ahead with a project to construct what would be its second pulp mill in Uruguay.
UPM and the government of Uruguay have been in talks for months over the project, which is expected to cost $4 billion.
"We are in agreement with respect to most of the main themes on the negotiation agenda," UPM said in a statement.
The government is negotiating an improvement in road and rail conditions as part of the deal.
"The negotiations between the Government of Uruguay and UPM on the development of infrastructure and other requirements for long-term industrial growth in the country have made important progress," UPM's vice president for business development, Jaakko Sarantola, said in the statement.
Finnish pulp projects in Uruguay have faced difficulties in the past. UPM's current mill in Fray Bentos, originally built by Metsa Group, caused a dispute between Uruguay and neighboring Argentina, while Stora Enso's $2 billion joint venture mill in Montes Del Plata was delayed by strikes and other labor issues before it finally opened in 2014. (Reporting by Malena Castaldi; Editing by Leslie Adler)