The low-key locals of Kangaroo Island aren’t accustomed to the political limelight, but a controversial development proposal has thrust them into it. In the wake of the 2020 bushfires, Kangaroo Island Plantation Timber (ASX: KPT) is seeking to rush through approval of a 650-metre wharf, chipping mill and export terminal on the island’s picturesque Smith Bay.
The planning council has now received 1,200 submissions in opposition, no surprise when the bay forms part of a coastal conservation zone, and 10 hectares of its seafloor would need to be dredged for the port’s construction. But Kangaroo Island Plantation Timber (ASX:KPT) says it has timber to move, and the faster it can move the timber, the more money it can make.
Bushfires destroyed hundreds of millions of dollars’ worth of plantation timber
Keith Lamb is managing director of Kangaroo Island Plantation Timber. He says they have 4.2 million tonnes of logs to move following the bushfire.
The bushfire destroyed or damaged half of the company’s trees. “The fire-impacted pine has a short shelf life. It needs to be harvested and processed,” says Lamb.
“We have started storing our pine in dams on our properties to preserve it as we await the approval and building of the Smith Bay facility, but we do not have enough water storage. So we must begin exporting.”
In March, KPT’s first 300 cubic metres were exported. The operation involved loading the timber by crane onto a barge, which was then towed the 13km to Port Adelaide. The logs were then loaded onto a container ship and transported to South Korea.
Lamb calls this “proof of concept” for investors, but says the Smith Bay terminal is still their primary objective. “This is a costly and inefficient way to export and won’t be the solution for all of that timber.”
The company is putting pressure on the government to approve the wharf despite community opposition. The main motivation for this is money, since Kangaroo Island Plantation Timber would make lower profits if they export the timber via this slower route.
Fred Woollard and Samuel Terry Asset Management Want To See The Money
Although Lamb blames the bushfire for their current predicament, it really only worsened existing issues. The average age of KPT’s blue gums, which make up 80% of their stock, is now 14 years.
Blue gums can be harvested at eight years and the ideal time is after 10 years.
Samuel Terry Asset Management is currently offering to take over Kangaroo Island Plantation Timbers. No-one would stand to make more money than them, if the whaf is built. However, Managing Director Fred Wollard is potentially underestimating community opposition and environmental concerns. We hope that a natural disaster will not be used to justify a cavalier approach to planning and environmental impact.
In any event, the saga of fund managers versus Kangaroo Island locals is a David vs Goliath battle we will be watching closely.
Follow Christian on Twitter for more news updates.
Feature image courtesy of SA Tourism.