29/05/2013 - 15:50

Caution on $700m Ord farming deal

29/05/2013 - 15:50

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Caution on $700m Ord farming deal
Premier Colin Barnett with KAI chairman Pui Ngai Wu and MG Corporation chair Edna O’Malley last year at the announcement of the Chinese company’s investment plans. Photo: Annaliese Frank

The state government has given Chinese group Kimberley Agricultural Investment four years to develop active irrigated agriculture in the Ord River region, before it will agree to signing long-term leases.

KAI will also need to develop an agreed Aboriginal Development Package within that time frame before the government signs leases that are expected to range from 10 to 50 years.

These conditions were disclosed today, when Premier Colin Barnett and regional development minister Brendon Grylls confirmed KAI as the proponent to develop 13,400 hectares of farmland in the Ord.

Mr Barnett said the first stage of the KAI proposal involved an investment of $200 million.

"This deal between the Government and KAI is set to deliver the biggest agricultural development in Australia's north in more than 40 years," the premier said.

Overall, KAI has proposed investing more than $700 million in the region, including $450 million to construct a sugar mill near Kununurra and $50 million at Wyndham port.

However, it is understood KAI's initial focus will be on growing sorghum for ethanol production.

KAI cautioned last November, when it was named the preferred proponent, that its full investment would only occur if it was able to secure access to 40,000ha of land, including extra land in the Ord and a large area in the Northern Territory.

Its chairman Pui Ngai Wu said last year there are "still significant challenges ahead to develop this project to its full potential and to achieve the economies of scale KAI requires for this to be commercially viable".

The challenges include gaining state and federal environmental approvals for the Knox Plain area and obtaining environmental approvals and native title agreements with the Miriuwung and Gajerrong people for the land in the Northern Territory.

MG Corporation chairperson Edna O'Malley welcomed today's announcement but issued a reminder that "no deals have yet been done regarding additional MG native title country which lies to the east of the WA-NT border".

"The relevant traditional owners in the NT are continuing talks with their native title representative body, the Northern Land Council, and the NT Government," she said

The KAI proposal follows a $515 million investment by the state and federal governments in roads, irrigation channels and other infrastructure in the area.

Ms O'Malley said that during the infrastructure construction phase, "hundreds of local Aboriginal people have gained access to employment, business, training, up-skilling and personal development opportunities and we'll be working closely with KAI and other parties to ensure this continues".

"MG people gave up their native title rights to allow this important development to go ahead and our expectations regarding employment and economic development opportunities for our peoples will always be high."

The state government said today land will be leased to KAI for terms ranging from 10 to 50 years with options for a 25-year extension, subject to performance.

KAI is required to meet development milestones, including achieving active irrigated agriculture on Goomig and Knox lands and implementing an agreed Aboriginal Development Package, within four years in order to convert to a long term lease.

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