On Thursday 29th October, members of the Business Kangaroo Island Committee met with Senior Executives of New Forests on their recent visit to Kangaroo Island. The purpose of the visit was to provide an update of their assets and proposals with regards to the future of the forestry industry on Kangaroo Island. The following is a summary of their presentation and our questions.
New Forests, a privately owned investment management company, has approx. 10,500 ha of Blue Gum forests on Kangaroo Island.
The Blue Gum plantations on Kangaroo Island are some of the highest quality Blue Gum forests in Australia due to the ideal growing conditions and few pests and diseases.
The blue gums on KI (owned by New Forests) are currently valued at a nil dollar figure, as without a port to ship the commodity they remain virtually worthless. According to an in-depth study by New Forests into the viability of mobilising the timber on KI, the estimated value of the trees is in the vicinity of $400 million over 20 years.
The trees are to be felled and hauled (expected to employ 50 full time employees – FTE’s), stockpiled and shipped to China as logs for processing.
To ship the trees to market New Forests are, currently, proposing a wharf facility at Ballast Head, American River. In selecting this sight they have considered and ranked more than 8 options. There is still considerable work to be done in preparing their application for the State Government, from which they will seek Major Projects Status.
Information provided by New Forests advocates the ideal of ‘investing to create productive and sustainable landscapes to benefit our clients and the communities where we operate’.
With this in mind, New Forests have indicated that they are of the opinion that a sustainable long-term forestry industry is viable on Kangaroo Island. The starting point being the initial harvesting and coppicing for a second rotation, providing timber for the industry for a period of approximately 20 years (initially), but with the scope that they are likely to be replanting in this time too, to perpetuate the forestry industry on the Island.
New Forests are hoping that favourable sea bed tests will enable them to ‘pile drive’ the pylons for the port facility and remove the need for dredging altogether. There is considerable concern with regards to the existing oyster lease in close proximity to the proposed wharf and New Forests have stated that they will be consulting closely with the owners moving forward.
The port facility will be funded by New Forests possibly with some State Government funding (if grants/funding are available). The estimated capital investment for the Ballast Head site is in the vicinity of $25 million. The proposed wharf is likely to be approx. 300m long, a double lane width to enable two trucks to pass, with a turnaround at the end, large enough for B-doubles to turn and be unloaded.
The proposed facility is for a multi-user wharf facility which would enable bulk goods to be loaded on and off a variety of vessels, making it suitable possibly for fertiliser and grains, fuel and other bulk containerised goods.
New Forests have little interest in ‘operating’ the wharf, this would be by a third party. When asked about the cost of using the wharf they indicated that the more freight that used the wharf the more cost effective the price will be for everyone. Their proposals are based upon the notion that there will only be one wharf facility licence granted by the State and that giving that, all forestry materials are likely to be shipped from the one facility (including those owned by other parties, particularly KIPT and individual holdings).
It is predicted that there could be up to 35 B-doubles/day hauling to the port facility from the forests; directly creating job opportunities in both felling and haulage, and indirectly in service and supply industries.
There is the obvious need for some areas of the road network to be upgraded to cope with the increased heavy traffic demands, this is currently proposed and the cost implications and management of this will be worked through as and when the project is firmed up/approved.
There are a number of studies being commissioned in preparation for an application for Major Projects Status to the State Government, hopefully sometime in the first quarter of 2016.
Business Kangaroo Island is seeking clarification of the timeframes from the planning phase to the construction phase (however these are subject to a number of internal approvals). We hope to provide an update as soon as possible
New Forests have had a number of meetings with the State Government as well as KI Plantation Timbers, who own approximately 3,600ha of Blue Gums and Pine plantations on Kangaroo Island.
There is considerable discussions still to be had, not least in determining which site is most likely to get approval – as there ‘will be only one’ site approved and there is further discussions to be had from a stakeholder point of view as well as community consultations.
Business Kangaroo Island will be seeking comment from KI Plantation Timbers and offering them the opportunity to discuss their proposal in a similar format. We will be encouraging both New Forests and KIPT to continue to work together to come to a timely agreement to ensure a positive economic outcome for thee Forestry Industry and Kangaroo Islanders.