$700m Ord sugar deal closer

Brad ThompsonThe West Australian

The State Government is on the verge of announcing the next step in a deal that clears the way for a huge investment by Chinese interests aimed at establishing sugar as the cornerstone industry for agricultural development in the east Kimberley.

The move could see a Chinese-owned company begin site work as early as next month on clearing prime agricultural land on the Ord River irrigation scheme in what the Government hopes will be a major economic boost for Kununurra and the port of Wyndham.

Shanghai Zhongfu, trading in Australia as Kimberley Agricultural Investments, was named the preferred developer of the Ord land in November under a proposal to invest $700 million over the next six years.

KAI is well advanced in talks with the Miriuwung Gajerrong Corporation on an Aboriginal development package and is believed to be close to a deal with the Government. That deal is due to go to the Cabinet within weeks.

Details of the final deal with the Government remain unclear, but the initial proposal was for KAI to lease and develop about 11,500ha into irrigated farmland.

It also planned to build a state-of-the art sugar mill with co-generation capacity near Kununurra and the Northern Territory border.

KAI also revealed it wanted to grow sugar cane in the NT to make the mill economically viable based on plans to extend the irrigation scheme over the border.

All the major players in the long-term plans, including KAI chief executive Jian Zhong Yin, Regional Development Minister Brendon Grylls, NT Chief Minister Adam Giles and Federal Resources Minister Gary Gray, will be in Kununurra this weekend for the Kimberley Moon celebrations.

Mr Grylls has visited China twice for talks with Shanghai Zhongfu and its president Pui Ngai Wu, who founded the company in 1992. The Government invested about $300 million of Royalties for Regions funding in the Ord-East Kimberley Expansion Project, which involved extending the main irrigation channel by 31km and building sealed roads.

Under a national partnership agreement, the Federal Government spent $195 million on social and community infrastructure in Kununurra and Wyndham.

In its initial pitch to the State Government, KAI said it could produce up to four million tonnes of sugar cane a year and employ more than 400 people by 2021. Its plans remain subject to environmental approvals.

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