Names of Reporting Persons

Peter R. Kellogg

Source of Funds (See Instructions)

OO

Citizenship or Place of Organization

United States

Sole Voting Power

16,224,508

Shared Voting Power

Sole Dispositive Power

16,224,508

Shared Dispositive Power

Aggregate Amount Beneficially Owned by Each Reporting Person

16,224,508

Percent of Class Represented by Amount in Row (11)

29.1%

Type of Reporting Person (See Instructions)

IN

Names of Reporting Persons

IAT Reinsurance Company Ltd.

Source of Funds (See Instructions)

WC

Citizenship or Place of Organization

Bermuda

Sole Voting Power

15,603,223

Shared Voting Power

Sole Dispositive Power

15,603,223

Shared Dispositive Power

Aggregate Amount Beneficially Owned by Each Reporting Person

15,603,223

Percent of Class Represented by Amount in Row (11)

27.9%

Type of Reporting Person (See Instructions)

CO

This Amendment No. 2 ("AMENDMENT NO. 2") to Schedule 13D is being filed pursuant to Rule13d-1(f) regarding shares of the common stock, par value $1.00 per share (the "SHARES"), of Mercer International Inc., a Washington corporation (the "COMPANY") that may be deemed to be beneficially owned by Peter R. Kellogg and/or IAT Reinsurance Company, Ltd., a Bermuda limited liability company (“IAT"). IAT and Peter R. Kellogg are each referred hereto as a Reporting Person, and are collectively referred to as the Reporting Persons.

This Amendment No. 2 amends and supplements the statement on Amendment No. 1 to Schedule 13D dated December 29, 2010 relating to the Shares. This Amendment No. 2 reflects transactions and developments through December 31, 2012, relating to such Reporting Persons' holdings of the Company. Only those items hereby reported in this Amendment No. 2 are amended and all other items remain unchanged. Terms used herein but not otherwise defined shall have the meanings set forth in the Schedule 13D, as amended.

The class of security to which this statement relates is common stock, par value $1.00 per share of the Company, which is organized under the laws of the state of Washington. The address of the principal executive office of the Company is Suite 1120, 700 West Pender Street, Vancouver, British Columbia, Canada, V6C 1G8.

(a) This Amendment No. 2 is filed on behalf of Peter R. Kellogg and IAT. Mr. Kellogg is the sole owner of IAT’s voting stock, is a member of IAT’s board of directors, and is the President and CEO of IAT. A joint filing agreement of Mr. Kellogg and IAT is attached as Exhibit A to the Schedule 13D filed by the Reporting Persons with the Securities and Exchange Commission on March 25, 2010 and incorporated by reference herein.

(b) The business address for Mr. Kellogg and IAT is 48 Wall Street, 30th floor, New York, NY 10005.

(c), (f) Mr. Kellogg is an American citizen and a private investor. IAT is a reinsurance company incorporated in Bermuda.

(d)-(e) During the last five years, neither IAT, Mr. Kellogg, nor, to their knowledge, any of the directors or executive officers of IAT has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

The Shares were acquired for investment purposes in the ordinary course of business and were not acquired with the purpose or effect of changing or influencing control of the Company. Mr. Kellogg and IAT believe that the Shares represented an attractive investment opportunity. Mr. Kellogg and IAT review their holdings of the Company on an ongoing basis and, depending on such review and on various factors, including, without limitation, the price of the Shares, stock market conditions, the financial position and strategic direction of the Company, and general economic and industry conditions, Mr. Kellogg and IAT may in the future take such actions with respect to their investment in the Company as they deem appropriate, including, without limitation, purchasing additional Shares or selling some or all of their Shares. In addition, Mr. Kellogg and IAT may, alone or with others, pursue discussions with the Company, other stockholders and third parties with regard to their investment in the Company and/or otherwise change their intention with respect to any and all matters referred to in Item 4 of Schedule 13D. Any purchases may be effected directly or through one or more entities controlled or deemed to be controlled by Mr. Kellogg. Any purchases or sales may be in the open market, in a privately negotiated transaction or otherwise.

Except as set forth herein, neither Mr. Kellogg nor IAT have any plans or proposals which relate to or would result in any of the transactions or changes contemplated in Items 4(a) through 4(j) of Schedule 13D.

(a) As of the close of business on December 31, 2012, the Mr. Kellogg beneficially owned an aggregate of 16,224,508 Shares, constituting approximately 29.1% of the Shares outstanding.

(b) IAT Reinsurance is the owner of 15,603,223 Shares, constituting approximately 27.9% of the Shares outstanding. Mr. Kellogg has sole dispositive and voting power with respect to the Shares owned by IAT. By virtue of his position with IAT, Mr. Kellogg may be considered to indirectly beneficially own such shares. Mr. Kellogg disclaims beneficial ownership of any shares owned by IAT. In addition, Mr. Kellogg disclaims beneficial ownership of 330,881 Shares owned by his wife, Cynthia. This statement should not be deemed to be an admission that Mr. Kellogg is a member of any "group" within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

(c) During the past 60 days, the Reporting Persons have not engaged in any transactions in the Shares.

(d) The non-voting stockholders of IAT have the right to participate in the receipt of dividends from, or proceeds from the sale of, the common shares held by them in accordance with their ownership interest in IAT.

(e) Not Applicable

Except as described in Item 5(d) above, to the best knowledge of Mr. Kellogg and IAT, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons enumerated in Item 2 or between such persons and any other person with respect to any securities of the Company, including, but not limited to, transfer or voting of any of the shares, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.

Exhibit A - Joint Filing Agreement between Peter R. Kellogg and IAT Reinsurance Company Ltd., incorporated by reference from a Schedule 13D filed by the Reporting Persons with the Securities and Exchange Commission on March 25, 2010.

Exhibit B - Power of Attorney in favor of Marguerite R. Gorman to sign all 13D and 13G filings on behalf of Mr. Peter R. Kellogg. Incorporated by reference from a Schedule 13D filed by the Reporting Persons with the Securities and Exchange Commission on April 5, 2007.

/s/ Marguerite R. Gorman, attorney in fact