UPDATE, 12:45pm: The new owner of a South West timber mill says a fire that raced through the mill this morning causing $2m damage is a "body blow".

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Timber fire causes $2m damage
Picture: Tom Edwards/ Manjimup-Bridgetown Times

UPDATE, 12:45pm: The new owner of a South West timber mill says a fire that raced through the mill this morning causing $2m damage is a "body blow".

Auswest Timbers bought and reopened the Deanmill Jarrah mill, near Manjimup, earlier this year after timber giant Gunns shut the near 100-year-old operation in February 2011, devastating the local community.

The mill could be closed for at least six weeks.

The mill's 42 workers have been stood down. It is hoped most will be redeployed at Auswest Timber's Pemberton operations.

Austwest Timbers managing director Gary Addsion said parts of the mill had been destroyed.

It could take months to return to full production.

"It's a body blow and a big disappointment, so soon after reopening," he said.

Mr Addison said he was thankful noone had been hurt and he was doing everything to ensure customers would not be disrupted.

No timber had been destroyed in the fire.

Mr Addison said he did not want to speculate on the cause of the fire, but said it was not believed to be suspicious.

Auswest Timbers employees examine the damage. Picture: Tom Edwards/ Manjimup-Bridgetown Times

The mill re-opened last month.

The sawmill was WA's first operating sawmill and is almost 100 years old.

Emergency services were called to the mill on Maloney Street in the historic timber town about 3am.

A Fire and Emergency Services Authority spokesman said it took about 90 minutes for firefighters to bring the blaze under control.

He said there was considerable smoke and water damage at the property as a result of the fire, the cause of which was accidental.

It is believed the fire was sparked by a welder working inside the mill warehouse.

Auswest Timbers employees examine the damage. Picture: Tom Edwards/ Manjimup-Bridgetown Times

Deanmill resident Cheryl Bannister, who lives a couple of hundreds metres from the fire site, said she was shocked by what happened.

"I got up to go the toilet at 2.30am and I thought I’d left my porch light on because I could see a yellow glow through my window,’’ she said.

"I went outside and saw massive flames above the shed; I couldn’t believe what I was seeing."

She said a group of Auswest employees reacted quickly to get the blaze under control before fire crews from Manjimup and Pemberton arrived on the scene.

"It was lucky I woke up when I did because if I hadn’t there might not have been anything left," she said.

"I hope the damage isn’t so bad that the mill can’t continue operating anymore. Deanmill has had a rough time lately and it’s only just getting back on its feet since the mill reopened again. It’s just not fair."

Many of Deanmill’s residents are employed by the mill and had only returned to work in June following previous owners Gunns closing it more than a year ago due to pressures in the timber industry.

Ms Bannister praised the heroic efforts of the residents who battled the blaze.

"There were quite a few of them who went down there to fight the fire," she said. "The community here is very strong. Fortunately it looked like the fire fighters had it under control fairly soon."