Kangaroo Island Plantation Timbers Ltd (ASX:KPT) dispatched the first trial load of softwood logs via the Sealink ferry from Penneshaw to the mainland on February 19 2021, for sale to a South Australian domestic customer.
If this trial is successful, the company contemplates regular orders will be dispatched via the Sealink ferry service to domestic customers, and newly emerging export markets from Port Adelaide.
Following the fires of December 2019-January 2020, KPT accelerated plans to build its proposed seaport at Smith Bay to realise the residual value of the fire-affected crop.
In December 2020, KPT was successful in its application for a $5 million Commonwealth grant to develop a pellet mill to consume fire-damaged logs not capable of being sold into conventional mainland and export markets.
The announcement noted that all forest products, including logs, chips and pellet product, would be exported via the proposed seaport at Smith Bay.
The dispatch via the Sealink ferry is part of KPT’s plan to establish alternate routes to market while the company continues to await advice from government on the approval process for the proposed seaport at Smith Bay.
Barging of logs from Kingscote
The two most practical alternatives to Smith Bay for handling chip, log and pellets are the existing ramp facility at Kingscote wharf, and the SeaLink passenger ferry service from Penneshaw.
KIPT is in advanced negotiations with its construction partner, Adelaide-based Maritime Constructions, to start barging of logs from Kingscote in order to meet impending market orders for logs.
The barging service will occur from an existing ramp facility which is subject to a long-term lease held by Maritime Constructions.
Maritime Constructions has recently submitted a development application to state government for the upgrade of the ramp and associated piles, but this does not prohibit immediate use with the appropriate configuration.
“All practical options to export logs off the island”
KPT managing director Keith Lamb said: “The announcement today will not come as a surprise to shareholders and stakeholders of KIPT.
“Following the fires of 2019-20, and while the Company awaits state governments decision for Smith Bay, we must pursue all practical options to export logs off the island.
“The two most practical routes to market via Kingscote and Penneshaw, will present greater impacts to the community and environment compared to our proposed seaport at Smith Bay.
“Neither are capable of handling the entire resource in the time required.
“While we are pursuing these in the short-term, KIPT reaffirms its commitment to developing its proposed seaport at Smith Bay as the best all-round permanent solution for the company and the community of Kangaroo Island.”