Development of a cotton gin in northern WA is set to proceed after ASX company Namoi Cotton, NSW wheat grower Ron Greentree and the federal government backed the project.
Development of a cotton processing gin in northern WA is set to proceed after ASX company Namoi Cotton, NSW wheat grower Ron Greentree and the federal government backed the project.
Kimberley Cotton Company has raised $14 million through the issue of convertible notes and shares to investors.
In addition, it has signed off on a $34 million loan from the federal government’s Northern Australia Infrastructure Facility (NAIF).
That replaced a conditional $32 million loan announced last year.
Together, the equity and debt will fund development of the cotton gin, which follows years of study on the sector’s potential in the Kimberley.
The key shareholders in the project are Chinese company Kimberley Agricultural Investment, which is already growing cotton in the area, Mr Greentree’s company Prime Grain, whi is also developoing land in the Ord, and Namoi Cotton.
Other shareholders are Ord River District Cooperative, traditional owners through MG Corporation and local family growers in the Ord Valley region.
Details of the $14 million capital raising were included in a recent investor presentation by Namoi, which has acquired a 20 per cent stake in KCC.
Namoi announced in September that it plans to build and operate the proposed cotton gin at Kununurra.
The ASX company said the project would cost $44 million to build.
It would have capacity of 90,000 bales in stage 1, rising to 110,000 bales in stage 2 and 180,000 bales in stage 3.
Namoi added that 11 growers have committed to supply a minimum of 75,000 bales from 2025.
For context, Australia's total cotton production this year is estimated to be 5.6 million bales.
For the sector to realise its full potential in WA, growers will need access to more land.
That appears to be a slow-moving process, with agriculture minister Alannah MacTiernan saying today that negotiations were continuing with Kimberley Agricultural Investment for a development lease at a land parcel known as Knox Plain.
It was 11 years ago that the state government called for expressions of interest to develop Knox Plain and neighbouring land parcels and 10 years ago that KAI was selected as the preferred proponent to develop this land.
KCC chair Gabi Bloecker said the cotton gin would bring diversity to the region and have generational economic benefits.
Kimberley Agriculture Investment spokesperson Jim Engelke said the investment in the cotton gin was the first step in the establishment of a significant industry within the region.
“The cotton industry offer integration with other long-established industry such as the cattle business,” he said.
“The initial investment is significant, however, only the beginning of the development and investment within the region.
“The indirect business activity and employment from the initial investment is in the region of 200-plus jobs in fields including freight, port and logistics, cattle feeding and husbandry, mechanical and support services.
“There will be the need to invest in enabling logistics, export facilities and the incremental increase in cattle management in the region.
“Many of these jobs will be suitable for locally based employees.”
“The direct economic benefits will include 30 jobs during construction and around 43 ongoing jobs when operational.
“The gin will also create on-farm, freight and logistics jobs, plus providing a supplementary feed source to the cattle industry in northern Western Australia through cottonseed.”
The WA government has supported the project by investing $4 million to upgrade the electricity supply and other infrastructure for the gin.
