The mediator, Juan Yanez, met with officials from both nations in recent days in hopes of ending the nearly year-long standoff over the proposed mill, El Pais newspaper reported online.

Protesters in neighboring Argentina have demonstrated against the plant, several times blocking a highway connecting the South American countries. Protesters say it would contaminate the Uruguay River, which separates the countries.

Uruguayans maintain, however, that the plant would comply with all federal regulations and would have minimal effect on the environment.

The Finnish company Botnia said the project would be on hold so Argentine and Uruguayan officials could debate the issue.