THE Kimberley Agricultural Investment (KAI) company is in the process of developing the Goomig farmlands and seeking approvals for its Knox Plain development.
While greater scale is required by the company to justify the establishment of a sugar industry, progress is still ongoing.
The company is currently seeking approvals for Knox Plain, which will open up a further 5000 hectares of arable land.
Other land parcels that could form part of the required scale could include Mantinea (about 4000ha) and lands in the Northern Territory (12,000ha).
KAI general manager Jim Engelke said while the Goomig farmlands are being cleared and developed into irrigation farms, the Knox Plain approvals were a priority.
While KAI is not active in the negotiations of the Northern Territory land, the Northern Territory Government is leading the process.
The focus on scale is important to KAI, as without scale, a sustainable and economically viable sugar industry would not be possible.
"The WA and Northern Territory land will give us enough scale to develop a full-scale sugar industry," Mr Engelke said.
"We can't build a mill, or have a sugar industry before we have the necessary land to produce the sugar cane."
Mr Engleke said all three land areas would create enough scale for a sustainable industry and hopefully the approvals would go through.
"We do have a lease on the WA side, which we are developing at the moment, but the environmental approvals, Aboriginal heritage and Aboriginal development people have not finished negotiations for Knox Plain," Mr Engleke said.
KAI CEO and director JianZhong Yin said he hoped the 5000ha they needed in the Knox Plain area could be approved soon, so they could start to clear land by September.
"It is a challenge, as we have had to get approval for each land area, so we have had to go through this process each time," he said.
KAI currently has more than 6600ha in Goomig, and another 5000ha in Knox, totalling 11,600ha, but Mr Yin said they would need about 35-40,000ha of land available for production in total to reach full scale.
Mr Engleke agreed and said a sugar industry in the Ord would not be viable with the land they currently have.
"If you don't have scale, you cannot get the efficiency required to operate in a remote region such as the Ord," Mr Engelke said.
"The minimum size mill that KAI will consider constructing is one with a two million tonne capacity, however KAI's preference is to build a mill of 3-4m tonne capacity.
"To produce 2m tonnes you need about 20,000ha of land, as we work on an average of 100 tonnes per hectare per year, which includes a rotation."
If all goes ahead, KAI plan to build a mill to process the sugar into renewable fuels for China, which could be built at the top end of the Goomig development, almost 55km north of Kununurra.
"The mill development is expected to cost about $450m to build, so we need scale first, before we can go ahead with the new mill plans," Mr Engleke said.
"We have the skills in town from the previous sugar industry, we have the machinery and sugar can develop other broadacre industries in the Ord and create further employment for locals."
KAI is an Australian-registered company wholly owned by Shanghai ZhongFu (Group) Co, whose parent company is the major Chinese construction group Shanghai Zhongfu Real Estate Co, and is developing 6600 hectares of crown land in the Goomig farming area, which will convert to 50-year leases.
Jacinta Bolsenbroek
Senior journalist at Farm Weekly.
Senior journalist at Farm Weekly.
