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Portman branches out into timber investment

IRON Ore miner Portman Limited will spend $2 million to establish a new managed investment scheme forestry business during the next 12 months alongside its existing iron ore and silicon metal divisions.

The new timber investment division, which aims to launch its first investment project within six to eight months, is regarded by Portman having the potential to develop into a highly profitable business for a relatively modest capital outlay.

In the longer term, development of a profitable MIS timber division will provide Portman with significant opportunities for vertical integration and downstream processing to support its other projects, particularly sustainable timber supplies for the Lithgow silicon project, which requires charcoal as a key input.

Portman’s objective is to quickly establish itself as a premium player in the Australian MIS timber business, drawing on its potential to access land in strategic locations, its expertise in the marketing of bulk commodities, skills in project management and access to capital markets and investment distribution systems.

Future downstream opportunities include possible woodchip production and export through the port of Esperance, which is being upgraded in conjunction with Portman’s iron ore expansion strategy, and charcoal production in NSW to supply the Lithgow silicon project.

Portman is evaluating long-term timber supply options for the Lithgow project and believes the MIS timber business could provide the opportunity for vertical integration which would significantly enhance the future of the project.

The company aims to acquire land for the first MIS during the second half of this year, with a prospectus to be issued by February 2001.

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