Tiwi Islands – Northern Territory

Archive for the ‘Tiwi Islands’ Category

Tiwi Land Council wanted More Govt $ for Disgraceful failure -300 sq km of Acacia Mangium Weeds- But No Go –

Posted by tiwiccbb on March 19, 2010

Tiwi jobs dream dashed by funding knock-back

By Phoebe Stewart

Updated Thu Mar 18, 2010 3:05pm AEDT

A forest plantation on the Tiwi Islands.

The Tiwi Land Council says it needs funding to keep the plantation going.


A plan to create hundreds of jobs on the Tiwi Islands and resurrect the collapsed Great Southern plantations project has been scuttled by a funding knock-back.

The Tiwi Land Council’s Andrew Tipungwuti says the Tiwi Islands have asked for funding from the Aboriginal Benefits Account to keep thirty workers to maintain the plantation over the next four years.

He says the funds would also have been used to hire an extra 180 local workers to harvest trees.

He says the Tiwi people are disappointed the Indigenous Affairs Minister, Jenny Macklin, has not stepped in.

“We’re trying to secure the lives of the Tiwis but unfortunately it didn’t fall in our favour,” he said.

“Maybe the minister thinking that economic development isn’t such a good thing on Aboriginal communities.

“We’ve just been told the funding has been declined by the minister, there has been no apparent reason for it.

“Overall it’s just disappointing.”

A media release from Ms Macklin’s office said the Tiwi Plantations Corporation had asked for funding while they sought private investment but the commercial risks involved in the forestry project were substantial and best left to the private sector to assess and manage

Posted in Abetz, Christine Milne, environment, Global initiative on Forests and Climate, Great Southern, Howard, Indigenous, Landclearing, Northern Territory, Rudd, Tiwi Islands, Tiwi Red, Uncategorized | 1 Comment »

Who is “Tiwi Plantation Corporation” ?

Posted by tiwiccbb on February 12, 2010

Tiwi forest trades hands

By Lorna Perry

Monday, 25/01/2010

Tiwi land owners have taken complete control of the forestry plantation once owned by Great Southern.

A deal for the equipment was signed late Friday with administrators McGrath Nicol accepting the offer put forward by the recently formed Tiwi Plantation Corporation.

Managed Investment Scheme company Great Southern collapsed mid last year leaving the future of the 30 000 hectare timber plantation in doubt.

But that’s no longer the case and Roger Smith from the Tiwi Plantation Corporation says it’s a good outcome.

He says they are still seeking commercial investment in the plantation.

“In the meantime we’re also talking to Aboriginal Benefits Account, people from Indigenous Land Corporation and people from Indigenous Business Australia as to how they can assist in the process.”

Operations on site have been proceeding as normal since the collapse of Great Southern and Mr Smith says up to 13 Tiwi people are employed.

He is confident that the plantation will be able to stay viable for a while despite the absence of commercial investors.

“We have to resolve… commercial invesment so that will be the main priority for the next two/three months.”

In this report: Roger Smith, Tiwi Plantation Corporation

Posted in Christine Milne, environment, Global initiative on Forests and Climate, Great Southern, Indigenous, Landclearing, Northern Territory, Tiwi Islands, Tiwi Red | Leave a Comment »

Bruce Maluish-on Pirntubula Board from (at least)2006-09, Matilda Zircon Director

Posted by tiwiccbb on November 21, 2009

Friday, November 20, 2009

Matilda Zircon to double zircon processing capacity at Tiwi Islands

High grade mineral sands developer Matilda Zircon (ASX: MZI) has commissioned a new slurry separation unit to facilitate the doubling of processing capacity to 300 tonnes per hour at its advanced Tiwi Islands Zircon Project, located about 50km north of Darwin.

Matilda Zircon Chairman Mal Randall said the new $500K unit would boost processing plant capacity at the high-value zircon project from its current capacity of 150 tonnes per hour to some 300 tonnes per hour.

“With the doubling of processing capacity, we will also reduce the unit cost of production,” Mr Randall said.

“Tiwi Island is our most advanced project and this investment demonstrates our commitment to restarting production in the near term.

” We plan to start-up again in the first half of 2010 after the coming wet season, with production for the calendar year planned at 45,200 of concentrate.”

The project is the company’s most advanced project, with plans to commence zircon production in 2010.

It has historically produced 46,000 tonnes of high-value zircon concentrate containing 48% zircon and 29% rutile, for export into the Chinese market.

“We have had an increasing number of inquiries recently for off-take of the concentrate which has earned a reputation in that market for its high grade and low impurities,” Mr Randall said.

“The spate of inquiries underpins our confidence in the Tiwi Islands Project going forward.”

Matilda Zircon, which is developing a suite of mineral sands projects in the Northern Territory, Queensland and WA, has an expanding zircon producing operation in Indonesia.

The Company was formed through the combination of the mineral sands projects of Olympia Resources (ASX: OLY), with zircon assets formerly owned by Matilda Minerals which were acquired in 2009.

Bruce Maluish, Director Matilda Zircon – 09






Senator SIEWERT—I am sorry to take you back to the beginning. I just want to work out
the relationship now between Matilda Zircon and the land council. You made some comment
that I missed, and I apologise for that.
Mr Maluish—Part of the transfer of assets included the assignment of the agreements that
Matilda originally had with the land council. Now Matilda Zircon operate under the original
agreements for exploration and mining.
Senator SIEWERT—So all the arrangements that were put in place previously still exist?
Mr Maluish—Yes.
Senator SIEWERT—Thank you for that. Can we go back to the issue around the wharf. You
said that it went into disuse in 2007. Do I interpret what you said correctly that you have had no
feedback on the plans for repair or expansion?
Mr Maluish—We have had none at all. We have no idea. Anecdotally, we have heard rumours. But we have had no official explanation of why it collapsed or any plans to re-establish it.
Senator SIEWERT—Under what conditions did you use it previously? Was there an arrangement with the subsidiary of GSL?
Mr Maluish—Yes. We had a port access agreement with PenSyl, which was a subsidiary of
GSL, and we paid wharf fees through PenSyl. They had a lease agreement with the Tiwi Land
Council. I think Pirntubula are the commercial arm of the Tiwi Land Council.
Senator SIEWERT—You were on Pirntubula at one stage, weren’t you?
Friday, 14 August 2009 Senate ECA 51
Mr Maluish—Briefly, yes…”

(Actually Bruce Maluish was on the mysterious “Pirntubula” company Board, with Tiwi Land Council CEO John Hicks as company secretary,  for at least 3 years, according to easily obtained ASIC documents.  3 years does not constitute “briefly” as Maluish stated, in Federal Parliament during the recent Senate Inquiry – see link http://www.aph.gov.au/hansard/senate/commttee/S12232.pdf.



Tuesday, 19 May 2009 Senate ECA 7

Senator CROSSIN—Mr Hicks, can you then explain this to me: Pirntubula is the business arm of the land
council. Is that right?

Mr Hicks—No, it is not.
Senator CROSSIN—How did that come to be established, then?
Mr Hicks—Pirntubula was established at the behest of the of the Northern Territory government in 1986
when they realised that the land council could not engage in commerce and they needed a vehicle to transfer
the assets of pine trees to a Tiwi entity. The distinction between the land council, which is a statutory authority established for the benefit of the land owners, and Pirntubula, which is a trustee company established for the benefit of the landowner’s commercial interests, goes back to 1986. It is not a creature of the land council. The land council has no shares in it. It is wholly owned and structured by the landowners. Yes, the land council does provide suggestions of things to invest in, like the health board, the training board, the marine ranger program, ceremony, culture and some books that the leaders would like to give you before you leave. But all those things are part of their initiative, and the land council has neither the resources nor the legal capacity to be involved in those.
Senator CROSSIN—But there are directors of Pirntubula that are not landholders; in fact they live on the
mainland and they are non-Indigenous. Is that right?
Mr Hicks—There are no shareholders. There are two directors, yes.
Senator CROSSIN—And you are the secretary of that company?
Mr Hicks—Yes, I am.
ECA 8 Senate Tuesday, 19 May 2009
CHAIR—How many directors are there in total?
Mr Hicks—There are now five. In the last week there have been three resignations. The five directors are: Mr Tipungwuti; Mr Kalippa, our chairman; Mathew Wanaemirri; Craig Phillips, of late Great Southern; and Ian Sylvester, who used to be the CEO of Perkins Shipping. Pirntubula has barging interests. He is a chartered accountant also.
CHAIR—Why did three directors resign last week?
Mr Hicks—We accepted their resignations. Bruce Maluish was one of the directors associated with Matilda Minerals, which disappeared. Tony Rokov was an accountant with Great Southern and Bill Headley was a past employee of Great Southern…”


Sands explorer to expand operations on Tiwi Islands

By Fleur Leyden
August 7, 2004

Mineral sands explorer Matilda Minerals has successfully petitioned the Tiwi Land Council to have vetoes on land in the Tiwi Islands partially lifted so it can mine zircon and rutile deposits.

Matilda Minerals is offering 22.5 million shares at 20 � each to raise $4.5 million, with plans to waltz onto the Australian Stock Exchange next month. The offer represents 66.34 per cent of issued capital.

Rutile is the pigment used in white paint, while zircon is used for ceramics. Both are worth about $650 to $750 a tonne.

Matilda Minerals managing director Barry Bolitho said the rapid expansion of the Chinese economy had made a big difference to the zircon market in the past few years.

“Zircon is the one that is in demand, and in supply deficit at the moment because of the very rapid increase in the urbanisation in China and a lot more tiles being used for kitchens and industrial uses,” he said.

Mr Bolitho, the former managing director of Magnetic Minerals, which was swallowed up by mineral sands miner Ticor in 2002, said the company was granted a single exploration licence and had applied for nine more licences covering the north and west coasts of the Tiwi Islands.

He said the Perth company had also reached an agreement with the Tiwi Land Council, representing traditional Aboriginal landowners, to explore and develop mineral sands deposits.

The Tiwi Islands, consisting of Bathurst Island and Melville Island, are 60 kilometres from Darwin.

“Nearly all Bathurst Island and a part of Melville was covered with a veto,” Mr Bolitho said.

“Another group had applied for large tenements up there previously for bauxite exploration and the Tiwi Land Council knocked that back . . . they thought it would change their lifestyle too much,” he said. “When we went to apply for some tenements the veto was still there so we negotiated . . . and asked that part of the veto be lifted so that we could apply for tenements.”

Matilda Minerals, the only Australian company exploring for and developing zircon and rutile deposits, is confident of starting production by the middle of next year following a feasibility study.

Mr Bolitho said the Ann Bay project, on the north-west coast of Tasmania, had been assessed to have a mineral sands inventory of 200,000 tonnes of heavy minerals containing zircon and rutile.

(John Hicks business mates always seem to have the same … how do you say… stench)

Wednesday, 21 October 2009

Kiernan: from security guard to larger-than-life mining character

Former Consolidated Minerals boss Michael Kiernan is one of the Australian mining industry’s most colourful figures. That is quite an achievement given the mining sector is not one unfamiliar with larger-than-life characters. In fact, the former security guard appears to be developing a sort of “black widow” reputation in the industry. On Friday, October 9, a small mining company called Australian Zircon was placed in voluntary administration. Kiernan was appointed a director of the company in February this year, but insiders have told Crikey that his influence is considerable.

The voluntary administrator appointed to Australian Zircon is Pitcher Partners who have acted in the past as administrator of other companies with which Kiernan has been involved.

Australian Zircon owns a mine located 150 kilometres from Adelaide. It had in place contracts to sell its product to an Austrian company called DCM. DCM was also a substantial shareholder in Australian Zircon.

That Australian Zircon collapsed in itself is not especially peculiar. The minnow reported a loss of $34 million for the six months ending December 31, 2008, reported operating cash outflows of $17 million and had only $1.2 million in the bank. Last year the company managed to lose $14 million on foreign exchange derivatives by selling US dollars. This was particularly impressive given that its revenue was only about half that amount. Australian Zircon also reported $15 million in “other expenses”, which shareholders may have been forgiven for thinking deserved further explanation.

However, the happenings at Australian Zircon are not without precedent in Kiernan’s business history.

In fact, Kiernan has found himself a director of several companies that experienced difficulties. In June 2008, he was appointed managing director of Monarch Gold. A month later, the company was placed in voluntary administration. The administrator appointed was Pitcher Partners. A year later Monarch was purchased by a company called Stirling Resources Limited. The managing director of Stirling just happened to be Michael Kiernan (Stirling was previously called Crawley Investments and was Kiernan’s family company).

Kiernan was also a director of Matilda Minerals until June 24,  2008. Matilda owned an iron ore mine in the Tiwi Islands as well as a prospect in Cape York and some exploration licences. The company was placed in administration in October 2008. Lo and behold, in May this year, it was announced that Kiernan’s company, Stirling Resources, had purchased Matilda for $4.5 million.

Kiernan has also been involved with other struggling miners Redbank Mines and Olympia Resources. However, Kiernan’s controversial past is most associated with the company he is credited with building, Consolidated Minerals.

Kiernan quit Consolidated Minerals in 2005 after institutional shareholders had the audacity to reject a proposal to hand Kiernan potentially tens of millions of dollars worth of “in-the-money” incentive shares.

A year later, Kiernan displayed a knack for selling shares at the right time. In May 2006, he collected more than $2.6 million from the sale of one million ConsMin shares for an average sale price of $2.66 per share. Shortly after Kiernan had sold his sizable parcel, the company announced a profit downgrade and the shares dropped significantly.

Michael Kiernan was not the only family member who displayed good judgement. Kiernan’s son, Laurence James Kiernan, sold 540,000 shares of Great Western Explorations at 49 cents per share and a further 1.02 million shares at 41 cents per share in 2006 (shortly after Michael had been appointed to the board). A a month later, Great Western’s share price had slumped by 23%.

Kiernan once told the Sydney Mining Club, that “to some I was a star. To others I was just an arsehole”. As the number of companies that  collapse under Kiernan’s watch grows, it would appear that the group of “others” may be expanding at quite a rate.


Kiernan empire continues to bemuse

The empire of mining entrepreneur Michael Kiernan continues to bemuse. The intrigue is furthered given the cornucopia of companies with which Kiernan associates appear to spend more time in administration than US-based airlines.

Kiernan made his reputation at Consolidated Minerals until he departed in acrimonious circumstances in 2005 after institutional shareholders refused to endorse his multimillion grant of options. ConsMin had been a market darling  — its share price skyrocketing under Kiernan’s guidance after the former truck driver recapitalised Valiant Consolidated Limited (which was then under administration) and reopened the Woodie Woodie manganese mine. While his tenure at ConsMin was a success, since his departure Kiernan’s Midas touch appears to have disappeared.

Earlier this year, a company called Territory Resources teetered on the brink of insolvency (its shares were suspended from trading on the ASX for several months). In 2007, Kiernan (who was Territory’s chairman) planned to use the company as a vehicle to regain control of ConsMin (Territory was ultimately outbid for ConsMin, which was later bought by Ukrainian-backed Palmary Enterprises). After its failed bid for ConsMin, Territory encountered a few problems of its own. The company staggered under the burden of a substantial debt, flawed hedge book and a range of losses on investments in other small mining companies. Territory was also hit by the iron ore price slumping from more than $US114/tonne to less than $US50/tonne.

Many of Territory’s losses coincidentally related to investments in companies associated with Kiernan. For example, in 2008 Territory wrote off more than $35 million in loans and investments in Monarch Gold. Territory also lost money on stakes in Matilda Minerals (which was partially owned by Kiernan’s Crawley Resources), India Resources (of which Kiernan was vice-chairman) and Olympia Resources (later acquired by Kiernan and chaired by Mal Randall, another associate of Kiernan). In total, Territory lost about $120 million in 2008 and 2009  — the company relisted last week and is currently valued by the market at about $70 million.

The current chairman of Territory is Andrew Simpson, who would probably know Kiernan pretty well, having been on the boards of Consolidated Minerals, Matilda Minerals, Windimurra Vanadium and India Resources with the former ConsMin boss.

As Crikey noted last week Monarch Gold (the company that caused Territory to write off $35 million) was placed in administration in July 2008, soon  after Kiernan had been appointed managing director (he had previously been a director until 2006). In 2009, Monarch was purchased by Kiernan’s Stirling Resources from the administrator. Territory’s 2009 annual report noted that Monarch has repaid $2.9 million to Territory and claimed it would pay the $25.5 million it owed the iron ore miner, less proceeds from the sale of several mining projects.

While Kiernan’s web is confusing, it appears that Territory Resources served as a sort of cashbox for companies associated with Kiernan (specifically Monarch Gold but also India Resources) before almost imploding. Territory was only saved by the generosity of the Noble Group, Kiernan’s long-time backers from the Consolidated Minerals days, which agreed to purchase Territory’s $17.6 million in loans last month.

Another common thread in Kiernan’s follies appears to be an accountant,  Brian Hughes. Hughes is the managing director of Pitcher Partners’ Perth office and served as administrator of Monarch Gold, which was sold to Kiernan earlier this year. Hughes also was the administrator of predecessor of Consolidated Minerals (which was sold to Kiernan in 1998) and Croesus Mining (a gold mining company that was chaired by Kiernan before being placed in administration in 2006 and that  sold the Davyhurst gold mine to Monarch, another Kiernan company).

Posted in Abetz, Blogroll, buffer, Christine Milne, environment, Global initiative on Forests and Climate, Great Southern, Howard, Indigenous, Landclearing, Mining, Northern Territory, Rudd, Tiwi Islands, Tiwi Red, Uncategorized | Leave a Comment »

Senate Inquiry Report – Tiwi Forestry – 29 October 2009

Posted by tiwiccbb on October 30, 2009

Senate Inquiry Report – Tiwi Forestry 29 October 2009


link below to hearings on Tiwi Islands, Darwin and Canberra




Tiwi timber plantation in dire straits

By Gina Marich

A Senate Committee has tabled a grim assessment of the commercial forestry plantation on the Tiwi Islands.

The acacia plantation takes up almost 30,000 hectares and was facing criticism long before the collapse in May of the corporate partner in the project, Great Southern Limited.

Earlier this month, the Tiwi Land Council took over the plantation.

It was hoped the trees would return almost $700,000 annually to traditional owners.

But the Senate inquiry has found the plantation will be completely unprofitable without a massive injection of cash.

The inquiry found major hurdles to selling any of the timber, including the high costs of maintaining the plantation, a need for major infrastructure before harvesting can start and problems with the trees themselves, which are not growing properly.

The Green’s spokeswoman on Indigenous affairs, Rachel Siewert, says the scheme was badly planned.

“We are not convinced that this project is sustainable,” she said.

“We are very concerned that it will not provide the returns that were hoped for when this project first started.

“And given the fact that the proponents of the project in the first place have gone into receivership and the administrators say that the project is unviable, I think that raises very major concerns about the future of that project.”

Posted in Abetz, Blogroll, buffer, Christine Milne, environment, Global initiative on Forests and Climate, Great Southern, Howard, Indigenous, Landclearing, Northern Territory, Rudd, Tiwi Islands, Tiwi Red, Uncategorized | 2 Comments »

Australia’s shame Part 2: Tiwi Forestry – 30,000 hectares of “bankrupt monoculture”

Posted by tiwiccbb on October 28, 2009


Australia’s shame Part 2: Tiwi Forestry – 30,000 hectares of “bankrupt monoculture”

October 28, 2009 – 8:20 am, by Bob Gosford

The Northern Territory has seen a number of what might politely be called “adventurous” broad-acre agricultural schemes that have resulted in inglorious failure.

Readers will know that I have borrowed the name for this blog – The Northern Myth – from a favourite book of mine of the same name published in 1965 and written by the distinguished agricultural scientist and economist Dr Bruce R. Davidson.

Davidson was a man well before his time and of whom many of the current boosters of the mantra of “develop the north” should take notice.

He was highly sceptical of the overblown claims being made by politicians, commentators and other boosters in the 1950’s and 1960’s of the potential of the north as an unburdened paradise for broad-scale agricultural development.

Davidson’s The Northern Myth presents a brutally clinical assessment – based on good science and thoroughly researched economics – of the prospects for many areas of agricultural and pastoral development across the top one-third of the Australian continent.

Parts of Davidson’s book are of course somewhat dated – but I’m sure that Davidson would be just as sceptical of some of the current claims being made – by the same classes of people – about the apparently bountiful future of agriculture in the north.

The most well-known of the failed experiments in northern broad-acre farming in the Top End was the Humpty Doo rice farm project.

The good folk at the Litchfield Shire Council provide this useful snapshot of the rice project – and of the mood of the time that is strikingly similar to some current views:

Rice grown at Humpty Doo was going to feed the starving millions in Asia. The Northern Territory could become the world’s food bowl – and the post-war world desperately needed food. With new skills, new markets, big money, and big ideas, northern development would become a reality, not just a hollow cliché. Certainly there had been failures before, the optimists admitted. But things were different now, they reasoned. Past failures were attributed to bad luck, bad judgment, inadequate capital investment, and similar reasons. Now, all these limitations and reasons for failure could be swept aside by a new wave of large scale capital development. And the Territory’s coastal plains would at last live up to all the hopes which had been held for them since explorer John McDouall Stuart in 1862 said of the area “it could be the finest colony under the Crown – capable of growing any and every thing.”

It didn’t quite turn out that way.

Suddenly, in the 1950s, the area became the focus for national ambitions to develop the north. The spectacular failure of these ambitions made the name “Humpty Doo” part of Australian folk lore.

In 1954 the junior Menzies government Minister Harold Holt infected the American mega-millionaire Alan Chase with enthusiasm for rice growing at Humpty Doo. Chase formed a grand plan for planting half a million acres to make the NT the world’s biggest rice producer. Chase declared that the Territory would be a food bulwark against communism. “Hunger in Asia breeds communism, and I believe that we have here the means of removing that hunger.” A specially commissioned film, “The Miracle of Humpty Doo” was produced and widely shown.

Chase formed a company Territory Rice which began experiments and plantings. By 1959 there were 5,500 acres under cultivation. It was proposed that the rice growing area would be subdivided in to 400 small farms, with housing and townships.

Magpie geese got the blame, but there were many more fundamental reasons – the project was always undercapitalised; no allowance had been made for rainfall and sunshine variability; soils were poor and drainage unsuitable; costs were high and poorly controlled; and marketing was never properly organised.

A few years later the land-clearing bug was still afoot in the Top End.

This excerpt comes from the NT Government’s Department of Infrastructure, Planning and Environment report, Land Clearing in the Northern Territory, written by E.J. Hosking in 2002:

In 1967 the first large-scale clearing project occurred in the Northern Territory on Tipperary station by the Tipperary Land Corporation (TLC) and at the time was believed to be the one of the biggest single agricultural projects in the world (NT News, 24/07/1967). The scheme planned for 79,000 ha to be cleared over 5 years, however, poor management, seasons and trying to do too much too soon eventually sent the Texan-based company broke (Mollah, 1980). Not learning from these mistakes, the Agricultural Development Corporation (ADC) undertook a similar feat in the early 1970s on Willeroo Station. An estimated 48,600 ha was recorded as cleared, with only 16,000 ha ever being farmed (Fisher, 1977).

With self Government in 1978, the NT launched the Agricultural Development and Marketing Authority (ADMA) in 1981/82. This Authority assisted private cropping developments (Sturtz, 2000) that helped establish the NT horticultural industry, and resulted in further clearing on Tipperary station in 1988/89 and development of the Douglas Daly research farms.

The Senate Environment, Communications and the Arts Committee is currently having a close look at forestry and mining operations on the Tiwi Islands just off the coast from Darwin. The Committee was scheduled to submit it’s report by Monday 26th October but there is no sign of the report at the Committee’s website and it has yet to be tabled in Parliament.

I’d heard a few weeks ago that the Committee would not make that deadline, in part due to the sheer complexity of the matters it has been charged with investigating, and also because there is a fair likelihood of separate reports from the Committee members.

You can see the Committee’s Terms of Reference here.

I’ve previously examined the mess that is left of the Tiwi Forestry operations here and here.

Most recently I looked at the predictable failure of the MIS schemes promoted by Great Southern Plantations, the operators of the large-scale Acacia mangium plantations on the Tiwi Islands that have been left to rot after its collapse in May this year.

It is clear, to me at least, that the collapse of the forestry operations on the Tiwi islands represents not just a failure of an ambitious agricultural scheme but also a failure of good corporate governance and highlights the need to conduct appropriate risk, economic and environmental analyses of the overall project – particularly in environmentally and culturally sensitive areas.

And it is not just in Australia that the Tiwi Forestry operations have drawn attention.

In late September Verlyn Klinkenborg editorialised in the New York Times and pointed to the broader impacts of the collapse of the forestry scheme on the islands:

…this is not just another forestry project gone awry — 75,000 acres of bankrupt monoculture where there used to be native tropical woodland…What’s left behind is a sense of desolation and distrust. I talked with several Tiwi Islanders — over a dinner of mud crab, local barramundi, local mussels and magpie goose — and it was clear that many of them doubted the good faith not only of Great Southern and the Northern Territory government but also their own Tiwi Land Council, which had encouraged the partnership

The question that night at dinner wasn’t just the economic loss involved — the loss of jobs and royalties and individual investments. It was the meaning of this failure, its demoralizing effect on a people who have been striving to find a way toward economic self-determination. Like traditional owners on the mainland, the Tiwi have had to struggle with the cruel vicissitudes of Australian policy toward its aboriginal population — everything from the brutality of official racism to the confused tolerance that has come in more recent times with cultural and political empowerment.

Apart from the social fallout from the failure of the arrangements between the Tiwi Land Council and Great Southern Plantations there are the very real questions about what will happen to the trees in the ground – will they be left to rot or is at least some part of the project capable of being salvaged?

On 16th May 2009 Administrators were appointed to Great Southern Group. Subsequently, on 18 May 2009 McGrathNicol were appointed Receivers and Managers of Great Southern Limited and certain subsidiaries of Great Southern.

In September McGrathNicol issued Circulars to Investors advising that the Tiwi Island forestry schemes (which consisted of a large number of tree-plots leased by small investors) would be unfunded after 30 September.

On 2 October McGrathNicol issued a further Circular to Investors in the Tiwi Leases, advising that:

The Tiwi Island operations are commercially unviable. The operating costs and capital expenditure requirements are extremely high. As we have been without funding for the Tiwi Island operations from 30 September 2009, we have commenced cessation of these operations. We also wrote to the landlords, the Tiwi Land Council, on 30 September 2009 advising that we will not be accepting any liability for the lease costs from 30 September 2009.

On 1 October 2009 the Tiwi Land Council terminated all head leases on the Tiwi Islands, relying on a clause contained in the head leases which entitled the landlord to terminate in the event of the insolvency of GSMAL.

In June the Tiwi Land Council had told the ABC that it needed a total of $120 million in order to:

…make the forestry plantations on the Tiwi Islands viable following the collapse of Great Southern Plantations…the land council’s Cyril Kalippa says he has asked the Federal Government for help because Great Southern’s account estimates show substantial money will need to be found to keep it going. “We need about $80 million for the next three years – that’s for the wages and the things that we need to operate the forest. “And also we need $40 million to extend the wharf or the jetty so that 50 tonne ships can come in and pick up the chip wood.”

Apart from the huge sums to keep the trees in the ground and alive – and the money to rebuild a ruined jetty – there remain very real questions about the viability of the whole scheme and who might front the large sums of money in a very tight market to a project with a troubled past and a far from certain future.

In early October The Australian reported that the Tiwi Land Council was optimistic that the project was still viable:

Despite the withdrawal of support from a banking consortium last month, Tiwi Land Council chief executive John Hicks said global demand for woodchips indicated the scheme was “clearly a viable operation”. “We have got it debt-free,” Mr Hicks said. “And it has a minimal rate of return of between 15 and 30 per cent.” The plantations will be harvested on decade-long cycles and landowners now have title to all fixed assets, including the camp headquarters, sewerage farm, port infrastructure, and airstrips. The TLC estimates it will need $80m to manage the plantation to maturity in 2013 and fix the Melville Island wharf so the trees can be exported.

Mr Hicks said at least 15 private investors had indicated they were prepared to support the group in the run-up to the first harvest in 2013. Mr Hicks said the 20 staff on the operation had been retained and that the plant had the potential to create 660 jobs in associated industries.

The controversial venture has already fallen victim to a cyclone and Great Southern was last year ordered to pay $4m for breaching environmental guidelines.

On 2nd October – the same day that McGrathNicols described the Tiwi Forestry project as “commercially unviable”, Dr Judith Ajani gave evidence to the Senate Committee’s Inquiry at Hearings in Canberra.

Dr Ajani is an economist specialising in forest and plantation research at the Fenner School at the ANU, where she has worked since 1996.  She is the author of ‘The Forest Wars‘ (MUP 2007) and is well placed to comment on the Tiwi forestry schemes.

Dr Ajani’s evidence to the Senate Committee centred on her assessments of the short-term propsects of Australia’s woodchip production and exports, the likely demand for the low-grade woodchips from the Tiwi Islands over the period 2010 to 2014 and the looming glut in supply caused by the rapidly increasing supply of plantation hardwood chips from plantations planted under the MIS schemes.

This is a glut that Dr Ajani says will require Australia to double the volume of sales into a flat market (Japan) where we export up to eighty-five per cent of out chips and where we  already supply about one-third of their intake – and that this will commence as soon as early in 2010.

Responding to questions from Greens Senator Rachel Siewert, Dr Ajani told the Committee that:

Dr. Ajani: What we have at the moment, and it is the really crucial issue here, is a very big volume of hardwood chip resources coming on stream from [Australian] plantations and we also have the native forest resource hanging in there as a continuing significant supplier of hardwood chips.

So what we are looking at here is Australia’s plantation chip resource increasing from our current level of production of around 4 million cubic metres per annum—that is the volume of that resource that we export currently from hardwood plantations—to around 14 million cubic metres per annum by 2010-2014. Native forest resources in there at the moment are supplying around 5½ million cubic metres. We have inevitably some very big resource volumes coming on stream very quickly. Some people might say that this is not a glut situation. I think they are not being open in their assessment of the reality here.

…with a glut we have a problem that happens in any commodity industry. Lower quality resources are the ones that always struggle to get market share and, in particular, to get market share at the price they expect.

…the Tiwi Islands chips using Acacia mangium are of a lower quality. They are of a lower quality, according to Great Southern plantations, because they have a lower pulp yield—in other words, you need more wood to make the same volume of pulp—and they are of a lower quality in terms of the additional costs that are required with respect to bleaching for paper production. That is information that Great Southern itself presented.

NT Labor Senator Trish Crossin asked Dr Ajani how the Tiwi might deal with their very real practical problems – they have trees in the ground that will cost a lot to maintain before they can be harvested and sold into an uncertain market:

Dr. Ajani: …it is a complicated problem…the Tiwi Island issue is embedded in a much bigger problem, which is the plantation MIS arrangements as a whole. The first job is to contain the problem. It is not just for the Tiwi islanders but also Australia wide—that is, in my view we should terminate the plantation MIS arrangements, because the last thing we want is greater havoc being played because we have more investment going into these operations while we are facing the market as I have described. The issue you raise is: what then happens to the trees?

…given the information that Great Southern itself provided some time ago and given the market conditions, there should be a great care about further expanding the plantation estate.

Liberal Senator Ian McDonald, in previous governments a Minister that provided no small measure of support for the plantation industry in general and MIS schemes in particular, asked a number of forceful questions of Dr Ajani, concluding with a question that revealed his belligerence and inability to comprehend her evidence:

Senator IAN MACDONALD—Chair, I am at a loss to understand the evidence Dr Ajani is giving.

Chair of the Committee is the Liberal Senator for South Australia, Simon Birmingham asked Dr Adjani about the prospects of the world hardwood chip market.

CHAIR— Dr Ajani, is the global hardwood chip market still growing?

Dr Ajani—The global hardwood chip market is largely flat…The trade figures are largely flat. The current downturn also is not presented in this graph on page 4. I do not see the hardwood chip trade globally recovering to such an extent that the wood volumes that we have coming on stream, virtually immediately, are going to be cleared easily and without putting pressure on the price.

Dr Ajani—…We are seeing globally a very strong separation of wood into wood products—paper and sawn timber—and the actual production trends of those products. In other words, what we are seeing globally are resource saving technologies coming through such that the strong growth in wood products is not flowing through to strong growth in wood input.

CHAIR—Recycling technologies and so on are substituting for plantation and native woodchips—is that your contention?

Dr Ajani—Yes. The main play here in the paper market is the role of recycled paper dampening the demand for wood despite strong growth in paper consumption.

Senator McDonald returned for one last unsuccessful shot at Dr. Ajani:

Senator IAN MACDONALD—What is your concern about the Tiwi Islands, from the Tiwi Islanders’ point of view?

Dr Ajani—I think they have a product which is not well placed in the play that is going to unfold over the next few years as our hardwood plantation resource comes onto the market.

In short, it seems that the Tiwi have been landed with a white elephant of monumental proportions – large swathes of pristine, high conservation-value tropical forest have been stripped and burned – or sold off in curious deals that have only made a loss to date.

The Tiwi have now been forced to go cap-in-hand for money from a cautious market and Governments that, understandably, have little inclination to throw good money after bad for a resource of dubious sustainability and diminishing value.

Many think that Tiwi Forestry is just another Northern Myth – an ambitious but poorly-researched and managed scheme that will – if it has not already – see large tracts of precious tropical forest land laid to waste for no good end.

As I indicated above, the Tiwi Islands forestry case is complex and I have only just touched the surface here.

I don’t expect everyone to agree with me – so if you have a view contrary to mine please register, and leave a (hopefully constructive) comment.

Similarly if you feel you may have something to add to or support my comments then please do the same.

You can read some background material (from a blog run by the NT Environment Centre in Darwin) here.

And I’d encourage you to read the Submissions and Transcripts of Evidence given to the Senate Committee at the Committee’s website here.

Thanks for taking the time to get this far!!

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