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Kangaroo Island Plantation Timbers secures AU$5.5m grant for pellet plant

Australia’s only listed timberland company, Kangaroo Island Plantation Timbers Ltd (KIPT) has recently announced that It has secured an AU$5.5 million bushfire recovery grant to support the establishment of a biomass pellet mill on Kangaroo Island, South Australia (SA) capable of processing fire-damaged timber. The plant would be at the company’s timber processing hub at Timber Creek, a site that was damaged by the fires of last summer.

Australia’s only listed timberland company, Kangaroo Island Plantation Timbers Ltd (KIPT) has recently announced that It has secured an AU$5.5 million bushfire recovery grant to support the establishment of a biomass pellet mill plant on Kangaroo Island, South Australia (SA) capable of processing fire-damaged timber (photo courtesy KIPT).

KIPT manages a wholly-owned portfolio of around 25 000 ha consisting of 14 200 ha of hardwood (Eucalyptus) and softwood (Pine) forestry plantations on former agricultural land and around 7 300 ha of remnant native vegetation on Kangaroo Island, South Australia.

The company also owns Kangaroo Island’s only sawmill and owns a potential port site at Smith Bay. The Smith Bay site is considered suitable as a site for a deep-water wharf that can be used as a bulk log or chip export facility.

Over the past 12 months, KIPT has worked to secure diversified markets for dry product – logs produced from forests that have been damaged by bushfire, beyond the tolerance of traditional export markets.

Develop a pellet plant for damaged wood

KIPT said on December 22, 2020, that has been advised by Senator Jonathan Duniam, Assistant Minister for Forestry and Fisheries, that its application to the Forestry Recovery Development Fund has been successful. The AU$5.5 million grant will support the development of a biomass pellet plant on Kangaroo Island, capable of accepting the fire-damaged logs and any other logs that cannot be sold into export markets.

Biomass pellets are a sustainably produced, carbon-neutral form of fuel used for electricity generation in established markets in Japan, North America, and Europe. There is growing interest and trade in biomass pellets as an emissions reduction strategy. New purpose-built plants are capable of generating power from 100 percent biomass pellets.

The plant would be at the company’s timber processing hub at Timber Creek, a site that was damaged by the fires of last summer. The pellets would be exported using the chip-handling facility at the proposed Kangaroo Island Seaport at Smith Bay.

Due diligence work on the pellet proposal continues with project partners and KIPT aims to have internal approval for the project in the first half of 2021, subject to regulatory consent.

Benefits for Kangaroo Island would include a small-scale biomass power plant to support the pellet mill, which is capable of dispatching base-load power to the electricity grid. Biomass-generated electricity is carbon-neutral, supporting Kangaroo Island’s brand values as a tourist destination and provider of high-quality agricultural produce.

On the first anniversary of the tragic Kangaroo Island fires, I commend the Commonwealth government and Assistant Minister Duniam on their vision and foresight in supporting this exciting project proposal. Although I am confident that lessons learned from the wildfire will reduce the risk of conflagrations of the extent and intensity we saw last summer, the proposed pellet and power project would provide a market outlet for all plantation growers on Kangaroo Island who might experience fire damage in the future. This re-builds confidence for the sector and the Island economy, said Keith Lamb, Managing Director KIPT.

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