HILO, Hawai'i — The state gave an Oregon company the go-ahead to harvest timber from a eucalyptus forest on state land near Hilo after the logger secured new funding.

Approval from the Board of Land and Natural Resources pushes the Waiakea Timber Management Area logging project forward after a six-year delay.

It could create jobs for 100 workers at a new peeling mill on the Hamakua Coast.

The venture ran into problems when the processor, Tradewinds LLC, developed financial problems weeks after it received a license in 1999.

Tradewinds recently enlisted a Houston company, Rockland Capital Energy Investments LLC, to provide $1 million in startup funding to get the project going.

The Waiakea Timber Management Area consists of nearly 12,000 acres of eucalyptus and several other varieties of nonnative trees, most of them planted in the 1960s in forests cleared along Stainback Highway.

Tradewinds plans to build a mill to peel logs from the area into veneer sheets that would be dried and shipped to a plywood mill on the Mainland.

Tradewinds president Don Bryan said the site for the Big Island mill could be selected within months if Rockland agreed to the terms set Friday by the land board. He said it would likely be located between 'O'okala and Honoka'a.

The company will be able to log about 7 percent less timber than under the initial plan agreed to six years ago, however, because it abandoned the idea of building a plywood factory on the Big Island.

State officials said the excluded trees — stands of Australian red cedar — will be made available through a public bidding process to companies interested in processing the timber into lumber on the Big Island.

On Friday, the land board voted to approve a variety of other changes to the original timber license, including extending deadlines and adding financial penalties if new deadlines are not met.

Under the latest agreement, the peeling mill must be completed by July 1, 2008.