Wellington, March 9 NZPA - Reports Australasian packaging giant Amcor is shelving construction of a paper mill at Botany in Sydney has fuelled speculation merger talks involving New Zealand billionaire Graeme Hart could be revived.

Sources said construction of the $A400 million ($NZ515m) mill was "shelved for the foreseeable future" several weeks ago, The Sydney Morning Herald reported today.

Amcor had also made at least 60 managers redundant from across its domestic packaging operations in the past month, according to other sources.

The latest redundancies and the shelving of the Botany mill has raised speculation Mr Hart and Amcor are about to re-enter talks about merging their separate Australian corrugated box and paper businesses.

Mr Hart's Rank Group -- the owner of Carter Holt Harvey -- came close to forming a joint venture with Amcor's corrugated and paper businesses in late 2007.

Mr Hart has done due diligence on Amcor several times in the past five years.

Amcor's share of the Australian corrugated box market has fallen in recent years, as Visy Packaging cemented its dominance.

An Amcor spokesman said the Botany project was proceeding but the company was retendering the work to get the best price possible.

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