ADELAIDE, AAP – A plantation timber company on Kangaroo Island will convert its 18,000 hectares of softwood to an agricultural estate after the South Australian government rejected its plan for a deep-water port on the island’s north coast.

Kangaroo Island Plantation Timbers said it would remove the tree crop from its land beginning immediately in what chairman Paul McKenzie said was a well-trodden and low-risk strategy.

It said a recently commissioned report had put the value of its land holdings at $51.4 million.

The company’s decision came after Planning Minister Vickie Chapman this week rejected the port proposal to ship timber from the island because of the potential for long-term environmental damage.

Ms Chapman said the impact on local businesses and the island’s character had also been factors in the decision to refuse the application from Kangaroo Island Plantation Timbers.


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Her decision came after a State Planning Commission’s Assessment Report found in favour of the application but described it as “finely balanced”.

“This was a difficult decision and one I have not made lightly,” Ms Chapman said.

“The assessment report was line-ball, however, I have come to the conclusion that the possible long-term and irreparable damage the wharf could cause to the Island is a risk I am not willing to take.

“Key factors included the impact on surrounding businesses, the marine environment, as well as biosecurity risks to neighbouring tourism and aquaculture businesses.”

But SA-BEST upper house MP Frank Pangallo said he was astounded by the minister’s decision and called on her to release any advice she received to reject the $40 million proposal.

“This is an appalling call by the minister as it has cost the island’s economy jobs and much-needed revenue,” Mr Pangallo said.

The port proposal at Smith Bay was first declared a development of major environmental, social and economic importance in February 2017.

It was expected to move about 12 shipments of plantation timber off the island each year but was also to be made available to other industries and generate about $42 million in annual economic activity.

Ms Chapman said she was aware her decision would have an impact on the local timber industry.

“However, I am not satisfied that the impacts identified can be monitored, managed or mitigated to a degree that would warrant development approval,” she said.

The minister said she would continue to search for a sustainable solution for the industry on Kangaroo Island and to also find a way to get timber burnt in the major bushfires in early 2020 off the island.

She said the government was exploring all possible options to boost timber supply and meet the current house-building demand.

Kangaroo Island Plantation Timbers said it would continue to pursue any harvest opportunities for its timber provided they offered returns to shareholders.

With its agricultural strategy requiring less capital, the company also announced a buyback of up to 5.6 million shares, or about 10 per cent of its total value.