News

Seaport update and first logs leave Island

Pine logs are harvested and stockpiled at Gosse West
The first load of fire-affected logs leaves via Sealink at Penneshaw, bound for Morgan Sawmill in Jamestown.

 

A third round of public consultation regarding the Kangaroo Island Seaport development at Smith Bay was completed last week. The Company awaits details of the submissions received by the Department of Planning, so that it can make its response document and the Department can complete its Assessment Report for the Minister.

KIPT had previously prepared contingency plans for establishing alternate routes to market for its fire-affected timber in the event the approval for the KI Seaport was delayed beyond a reasonable time. Compared to the proposed development at Smith Bay, these alternate routes to market are considered sub-optimal in respect to economic returns to shareholders, impacts on the environment and on the community of Kangaroo Island.

During the course of the year certain developments in export markets also caused the Company to examine new products and marketing strategies.

The two most practical alternatives to Smith Bay for handling chip, log and pellets are the existing ramp facility at Kingscote wharf, and the SeaLink passenger ferry service from Penneshaw. Both of these options are sub-optimal compared to the proposed seaport at Smith Bay due to physical capacity constraints, likely cost and impact on surrounding communities. Both involve land transport through towns and in the case of the Penneshaw departure point, increased road distance both on-island and on the mainland will result in higher levels of interaction with tourist and local traffic, and create higher carbon emissions for every tonne of wood produced.

On Friday 19 February 2021, KIPT dispatched the first trial load of softwood logs via the Sealink ferry to the mainland, for sale to a South Australian domestic customer – Morgan Sawmill at Jamestown. If successful, the Company contemplates regular orders will be dispatched via the Sealink ferry service to domestic customers, and newly emerging export markets from Port Adelaide.

KIPT is in advanced negotiations with its construction partner, Adelaide-based Maritime Constructions, to start barging of logs from Kingscote in order to meet impending international market orders for logs. The barging service will occur from an existing ramp facility which is subject to a long-term lease held by Maritime Constructions.

KIPT has entered into a non-binding Memorandum of Understanding with Adelaide-based T-Ports for barging of log, chip and pellets from the Kingscote site, to start as soon as possible. The MOU between KIPT and T-Ports sets out terms for cooperating on services to be offered by T-Ports from the Kingscote site, for the period until the proposed seaport at Smith Bay is approved and constructed. T-Ports will relocate its services to Smith Bay once the Seaport is operating.

“Following the fires and while the Company awaits state governments decision for Smith Bay, we must pursue all practical options to export logs off the island. The two most practical routes to market via Kingscote and Penneshaw, will present greater impacts to the community and environment compared to our proposed seaport at Smith Bay. Neither are capable of handling the entire resource in the time required. 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 the community of Kangaroo Island” said Managing Director Keith Lamb.

Read the full ASX release here, regarding the above matters.