News

Harvest plans take shape

New growth at Macgill plantation

Kangaroo Island Plantation Timbers has advised the three levels of government about its plans to start harvesting of the fire-damaged plantations on Kangaroo Island.

Salvage harvesting will begin in the area of fire-damaged pine trees which is most at risk of decay, to recover the higher value logs. Advice to the Company is that these logs must be harvested within two years of the bushfires and stored under water or sprinklers in order to preserve value. This strategy will allow the company to maximise recoverable volume, as it awaits approval for the KI Seaport facility at Smith Bay.

An Expression of Interests (EOI) process started in 2019 for provision of harvest and haul services and the Company is now received proposals from a number of operators to start initially in the pine and then move to the bluegums. KIPT is also in discussions with independent growers on the Island regarding harvest of their fire-damaged trees.

Early work will start this calendar year prioritising trees along power lines, in consultation with SA Power Networks. It is expected that the pine harvest will start early in 2021.

The Company expects to salvage a total of 3 million tonnes of timber with sufficient value to support building of the KI Seaport. Other uses are contemplated for a further 1.5 million tonnes of timber which is not considered suitable for log export.

The salvage harvest is expected to generate in excess of $200 million in economic activity for the Island over the next four years, excluding the beneficial impact of the port.

Managing Director Keith Lamb noted that in the December 2019 company accounts the Board took the prudent step to reset the shareholder value of the fire-affected crop to zero, but this does not mean the crop is worth zero. There is, in our estimation, sufficient residual value to justify the cost of harvest and transport, as well as building the KI Seaport at Smith Bay. This in turn presents significant benefits for the island economy through the creation of new well-paid skilled jobs in forest production.

The alternative, to chain and burn the 4.5 million tonnes of standing timber, would not benefit anyone and likely cause significant environmental impact through the release of smoke, ash and carbon dioxide.

The Board has made the decision to move forward with salvage harvesting, taking into account the need for timeliness in order to maximise recoverable volume. The stockpiling strategy will be managed carefully to take into account company cash reserves and value-at-risk, while the approval process for the KI Seaport is completed.

“We look forward to working with all stakeholders to maximise the benefits of the forestry industry for Kangaroo Island,” Mr Lamb said.