Two proponents secure Ord land

Listed sandalwood producer TFS Corporation and China-backed Kimberley Agricultural Investment (KAI) have been selected as the preferred proponents to develop 5,000 hectares in the Ord River irrigation area.

TFS and KAI are already the largest landholders in the area.

KAI has been selected to develop about 4,000ha of arable land in an area known as Mantinea. 

This will be additional to 13,400ha it was granted in 2012 - development of this land is expected to continue next year after KAI obtained final regulatory approvals last month.

TFS has been selected to develop about 1,000ha in the Ord West Bank area.

It already has 3,800 of Indian sandalwood plantations under cultivation in the Ord River irrigation area and a further 1,900ha nearby at Kingston Rest.

Managing director Frank Wilson said he was very pleased that TFS was selected, saying the soil conditions in the Ord West Bank area were highly prospective for Indian sandalwood.

KAI and TFS will have an opportunity to gain freehold tenture over the land parcels, under a phased approach.

The state government plans to initially offer KAI and TFS an option to lease the land to allow the completion of approvals. 

This will be followed by a development lease (if the option is exercised) that contains conditions and performance milestones to develop and farm the land. 

Subject to satisfactory performance under the development lease, the proponent will have the option to convert to freehold tenure.

Regional development minister Terry Redman said the successful development of 5,000ha would be another major step in unleashing the region’s potential.

“The Ord-East Kimberley expansion project is one of the most significant and exciting investments made in agriculture in this State’s history, and I look forward to seeing the Ord further evolve into a world-class agricultural precinct,” Mr Redman said.

“The land release will increase the size of the Ord irrigation scheme area to 35,000 hectares, and will further contribute to sustainable performance of the Ord region.”

The Ord-East Kimberley expansion project involved the investment of $517 million of state and federal government money in irrigation channels, roads and other infrastructure.

The 35,000ha total includes about 14,000ha of established agricultural land, with nearly 6,000ha devoted to sandalwood plantations managed by TFS and private company Santanol and the balance devoted to small-scale horticulture.

It also includes the 13,400ha awarded to KAI in 2012 and about 1,700ha in the Ord West Bank to provide up to 25 new locally-run farms.

KAI’s long-term plan was to develop a sugar mill at Kununurra.

That would require the planting of at least 30,000ha of sugar cane and would only be possible if KAI was able to secure 14,000ha on the Northern Territory side of the border.

The NT government is in the early stages of negotiating land releases and gaining relevant approvals.

In the interim, KAI is planting grains and sorghum, starting in the Goomig area, where clearing of 6,600ha was due to be completed this year.

The company has spent most of this year gaining relevant approvals so it can proceed with the next stage of its land clearing at Knox Plain.

This included approvals under the federal government's Environmental Protection and Biodiversity Conservation Act, an Aboriginal Development Package as required under the area's native title agreement, a bat survey and an acquatic management plan.

The final conditions were met in late November and KAI is expectedto commence clearing on Knox Plain during the 2016 dry season, according to the Department of Regional Development.

In a letter sent to state MPs earlier this year, KAI said future investment was “at risk” unless the government addressed its concerns, including a desire to gain freehold tenure.

Business News was unable to contact KAI for comment today.