A fire at a pellet plant outside Show Low began when an excavator moving logs caught fire, Show Low fire authorities said.
Tuesday afternoon's fire at Forest Energy Corporation spread to a pile of logs. As it grew, authorities evacuated some businesses and personnel east of the fire, officials said.
The loss of inventory and equipment is pegged at $1 million, plant officials said.
Air tankers were deployed and dropped water on the flames in efforts to prevent the fire from crossing the road and threatening nearby homes.
Fire officials told CBS 5 News it is "a serious fire," prompting the use of air tankers.
Show Low fire Capt. Brent Mix said the fire is mostly being fueled by scrub oaks and not ponderosa pines.
U.S. 60 remains closed between Highway 77 and Bourden Ranch Road, the Show Low Police Department said.
According to its website, the plant manufactures wood fuel pellets, horse and animal bedding and densified wood fire logs, among other products.
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