Premier Colin Barnett confirmed one of the worst-kept secrets in WA agriculture this morning when a Chinese conglomerate was officially anointed as the preferred developer of the prized land on the Ord River irrigation scheme.
Shanghai Zhongfu, trading in Australia as Kimberley Agricultural Investments (KAI), will pay the State Government a peppercorn rent on a 50-year lease and develop 13,400ha released under the Ord-East Kimberley Expansion Project.
Mr Barnett announced the successful proponent at the State Reception Centre in Kings Park this morning, flanked by representatives from the Chinese company, Regional Development and Lands Minister Brendon Grylls and traditional Aboriginal landowners the Miriuwung Gajerrong Corporation.
KAI plans to grow sugar cane and build a state-of-the-art sugar mill near Kununurra in the Kimberley.
The company will invest up to $700 million in the next six years to annually produce about four million tonnes of cane and 500,000 tonnes of export sugar crystal.
The Premier said the project was a major step towards the region reaching its full potential.
“This investment in large-scale agricultural industry and downstream processing will be the start of an exciting new era for the East Kimberley and northern Australia,” Mr Barnett said.
The Chinese group will also need to invest heavily in infrastructure and Aboriginal community development, and meet land clearing costs.
KAI will lease and develop 13,400ha of Crown land in the Goomig and Knox Plain areas into irrigated farming units under leases with terms ranging from 10 to 50 years.
Another 1700ha of newly developed land in the Ord West Bank area will also be available for other producers and crops, to provide up to 25 new, locally run farms.
It is the first major step in KAI's plans to farm sugar cane on an additional 15,000ha in the Northern Territory - a venture that depends on water from the Lake Argyle-fed irrigation scheme flowing in the NT.
Food-grade sugar and ethanol produced by the Chinese mill would be exported from Wyndham.
KAI won the development rights from two Australian shortlisted contenders, including Australia's biggest cattle and land company AACo.
The State and Federal government have invested $512 million in the latest Ord expansion.
This morning Mr Barnett praised the Miriuwung and Gajerrong people for the "significant role they played in the process to date".
“I’d like to thank the Miriuwung and Gajerrong for their work with the Government and proponents during what has been a long process,” he said. “This was a significant act of self-determination which will now see them become landholders in their own right.”
Mr Grylls said KAI was one of a number of companies which registered for the expressions of interest process.
“Today’s announcement is a major milestone for the region’s future, which has essentially been constricted since 1972 when Lake Argyle was created,” he said.
“The Liberal-National Government’s decision to invest $311million of Royalties for Regions funding into the Ord-East Kimberley Expansion Project has delivered 31km of new main irrigation supply channel.
“It has also delivered 40km of sealed public roads across land which, under this proposal, will be developed into operating farms.”
Mr Grylls said contract negotiations would be conducted and finalised during the next six months. KAI must also obtain all relevant approvals and be required to fund associated infrastructure.
WA would retain ownership of the irrigation channel, sealed roads and other infrastructure developed within the Royalties for Regions Ord-East Kimberley Expansion Project.