- The company hopes to build a wharf and export facility at Smith Bay in South Australia
- It is in the process of picking up a 173-hectare coastal site to cater for its plans
- South Australia’s Minister for Planning, Transport and Infrastructure has green-lighted a two-month public consultation on the proposed KIS Seaport wharf
- Submissions are due by May 28, 2019
- The proposed facility would be an additional landholding to a 12-hectare site snapped up 5 years ago
What does KIPT do?
Kangaroo Island Plantation Timbers Ltd (ASX:KPT; KIPT) is a recapitalised timberland company in Australia with export ambitions. It hopes to export hardwood out of a KI Seaport to meet increasing demand from global markets, create 250 full-time jobs and bring in more than $50 million to the economy.
It is run by managing director John Sargeant, a market expert and Australian Market and Social Research Organisations (AMSRO) fellow with an undergraduate biological sciences degree and an honours degree in psychology.
The Curly Questions director and former University of Sydney lecturer was a principal behavioural scientist at Transport for New South Wales, chaired the Ipsos-Eureka Social Research Institute and is a past president of AMSRO.
What does KIPT own?
The key asset is the Kangaroo Island plantation project on the island it is named for off South Australia, Kangaroo Island.
The Adelaide and Kangaroo Island-based company has 25,000 hectares on the island, with 15,000 of those hectares being under plantation.
KIPT’s plantation contains 80% eucalypt trees and 20% pine trees, with the trees at or near maturity.
Kangaroo Island itself is 440,500 hectares.
The company hopes to establish a deepwater export facility named KI Seaport at a 173-hectare site it is acquiring on the island and chose Smith Bay as its preferred site 2.5 years ago in 2016.
KIPT’s site selection had followed a report in 2014 that highlighted the bay area had been dredged in the past, creating a deep channel in the bay.
KIPT has prepared a draft environmental impact statement (EIS) for the project designed to be built and operated to protect the environment.
The EIS flags construction and operation of the facility would have no negative effects on a land-based abalone farm at the bay.
South Australia’s Minister for Planning, Transport and Infrastructure has green-lighted a two-month public consultation period for the EIS so community members can share their views and any concerns on the proposed bayside facility.
The public consultation period closes on May 28, 2019, with community members able to download a copy of the company’s draft environmental impact statement for the Kangaroo Island Timber Port at the South Australian Government website.
If the wharf facility plan goes ahead, KI Seaport is expected to bring in more than $50 million to South Australia’s economy and create 250 full-time jobs, most of them on the island.
In September 2018, KIPT signed an exclusivity agreement with a Mitsui & Co Ltd (TYO:8031) (FRA:MTS1) (OTCMKTS:MITSY) (OTCMKTS:MITSF) subsidiary, where Mitsui business would develop, maintain and operate the complete woodchip-handling facility.
The partners would aim to respond to an emerging shortage of quality hardwood woodchips in Asian markets, as demand grows for fibre-based consumer goods and supply is constrained to significant levels.
A circular automatic stacker-reclaimer at Smith Bay could store 80,000 green tonnes at the facility — a greater capacity than the largest-sized woodchip carrier vessels.
Mitsui operates similar facilities at Bunbury port in Western Australia and port of Portland in Victoria.
A stockpile at Smith Bay could be concurrently built up and reclaimed at the same time as chips are added and collected for export via sea.
Export vessels would depart for their destinations via KI Seaport and KIPT would pay Mitsui a per-tonne fee to use the facility.
The South Australian company would then take over ownership of the facility after 10 years.
Mitsui and KIPT’s conditional agreement is subject to a number of terms, such as development approval and the execution of final transaction documents.
In March 2019, Australian-listed company KIPT raised $1 million through a share purchase plan (SPP) that priced shares at $2 each.
It had followed a December 2017 capital raising where $20 million was collected during an oversubscribed placement.
The company had held $4.4 million cash at the close of 2018 and is expected to publish its next quarterly report at the end of April 2019.
Smith Bay wharf public consultation which closes on May 28, 2019
Smith Bay environmental impact statement (EIS) assessment process outcomes
Regulatory approval successes
Financing milestones, including a final investment decision
Chairman Paul McKenzie highlights project’s expected footprint
“The draft EIS and its associated studies demonstrate that the KI Seaport can be built and operated in a way that protects the environment, while providing significant social and economic advantages to South Australia, and to the Kangaroo Island community in particular,” Kangaroo Island Plantation Timbers chairman Paul McKenzie wrote in the company’s latest half-year report on behalf of its directors.
“Importantly, the draft EIS demonstrates that construction and operation of the facility would have no negative effects on the land-based abalone farm that is also located at Smith Bay. It also shows that there would be no significant negative effect on any matters of national environmental significance.
“The KI Seaport, once built, is expected to unlock more than 250 full-time jobs, most of them on Kangaroo Island, and to inject more than $50 million a year into the South Australian economy.
“The project has not changed in scope or scale since it was originally declared a major development in February 2017, although the design of the jetty structure has been modified to reduce the environmental impact of the proposed seaport.”