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Timber company begins shipping logs off Kangaroo Island ahead of port decision

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Kangaroo Island Plantation Timbers has begun shipping bushfire-affected logs to sawmills on the mainland as it races the clock to deliver wood to market before it rots.

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However, the publicly-listed company says it is still committed to its proposed Smith Bay port on the island’s north coast as the most effective way to quickly move the estimated 4.5 million tonnes of fire-affected timber off the island.

In a statement to the ASX last week, Kangaroo Island Plantation Timbers (KIPT) said it was exploring the “two most practical alternatives” to its proposed Smith Bay port in a bid to quickly ship logs to market.

KIPT managing director Keith Lamb told InDaily the company was hoping to use both the existing ramp facility at Kingscote wharf and the SeaLink passenger ferry service from Penneshaw to transport about $250 million of wood onto the mainland for local structural lumber markets and sawmills as well as export markets.

“It’s been a long time since the fires – those fires came through between 20th December 2019 and 20th January 2020 – and here we are 12 months on, we still don’t have the approval for the port,” he said.

“Through the course of last year I ran these contingency plans, hoping I wouldn’t have to activate them, and here we are 12 months on. We can’t wait; we’ve just got to get on with it.”

It follows KIPT’s first trial load of softwood logs from Penneshaw, on the eastern end of island, to mainland SA using the SeaLink passenger ferry last month.

Lamb said the logs would be transported sawmills for structural timber.

KIPT has also entered a non-binding Memorandum of Understanding with Adelaide-based T-Ports to start barging chips and pellets from Kingscote from mid-year.

Under the MOU, T-Ports will relocate services from Kingscote to Smith Bay if the seaport is approved, to allow for more efficient exporting of chips and pellets to markets in construction, paper and packaging products.

The company said it was also negotiating with its construction partner, Adelaide-based Maritime Constructions, to begin barging from an existing ramp facility in Kingscote, for which Maritime Constructions holds the lease.

But KIPT said physical capacity constraints, cost and the impact on the surrounding communities made both Kingscote and Penneshaw “sub-optimal” routes compared to the proposed Smith Bay seaport.

“I don’t believe, ultimately, the community would tolerate seeing 4.5 million tonnes of timber going across the passenger ferry of Penneshaw or out of Kingscote,” Lamb said.

“I think we would see log trucks backed up for miles, they just don’t have the capacity. That’s not to discredit those as options; they’re only starting options for us.

“We need to have the infrastructure that’s capable of handling the volume we’re talking about that’s rising from these forests.

“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 for the community of Kangaroo Island.”

The proposed deep-sea port, which is about 20km west of Kingscote on the island’s north coast, has been declared a major project and is still pending a final decision from the State Government.

The final documentation for the $40 million jetty and handling facility – the Kangaroo Island Seaport  – was put to the state government in March and a further response document lodged in June.

KIPT has previously said the port was crucial to shipping the bushfire-affected timber that could be salvaged and sold before it begins to rot.

The company has so far received more than $55 million in insurance payouts following the fires that damaged 95 per cent of its crop, which is predominantly on the western half of the island.

It’s estimated it has about two years before its burnt softwood pine trees rotted, while the hardwood blue gums could potentially last up to five years.

“We have a window that’s closing rapidly on being able to economically salvage it. Fortunately, we have lots of different product opportunities and that’s what we’re doing at the moment,” Lamb said.

“There’s fresh wood, so we’re harvesting the wood so that it can be sold into fresh wood markets – things like structural lumber that goes into your houses or landscaping.

“We’re seeing historic highs in terms of demand for timber … because of the housing boom.

“There’s a handful of existing sawmills in the catchment of Adelaide, so we’re looking at supply in those existing sawmills, plus saw millers in the South East, around Mount Gambier, which is a very strong forestry region.”

The building industry across Australia is reporting a shortage in timber due to a residential building boom as supply shortages linger from the December 2019 bushfires that raged across Australia, particularly in New South Wales.

It follows an announcement in December that KIPT had won a $5.5 million Federal Government grant to support the development of a wood pellet plant at the company’s disused Timber Creek sawmill site.

The plant would allow fire-damaged logs that could not be sold into export markets to be converted into wood pellets and sold as a carbon-neutral fuel for power generation, with the pellets to be exported from the proposed Smith Bay port.

Opponents have long pushed for KIPT to find an alternative to the deep-sea port that is proposed near Yumbah Aquaculture’s Smith Bay abalone farm.

Yumbah Aquaculture general manager David Connell said the abalone farm would not be in the clear until the port had been ruled out entirely.

It comes as Yumbah prepares for a $13 million expansion, which includes a $9 million discovery centre and shop and is expected to increase the current workforce from about 30 employees to 70.

Connell said if the Smith Bay port was approved, the farm would begin “winding back” its operations, citing the environmental impact on the business.

Kangaroo Island Mayor Michael Pengilly welcomed KIPT’s decision to explore alternative options to move timber off the island as a “step in the right direction” saying the plan “should kill Smith Bay”.

He said he would be seeking that KIPT “use decent vehicles, quiet vehicles, and no exhaust breaks and as part of the permits to start operating”.

“Penneshaw is the main port on the island anyway and there’s trucks going in and out of Penneshaw, anywhere from about 9pm at night to 4am in the morning and so it’s not going to add to that considerably,” Pengilly said.

“It just takes all of the pressure off Smith Bay.”

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