A sell-off of more than 250,000 of acres worth of state-owned forestry assets in South Australia will not impact long-term supplies of timber in the manufacturing and construction markets and will leave the state’s forestry assets in safe hands, the SA government says.
Announcing the deal last week, Treasurer Jack Snelling said the state would sell the assets, which are located in the Green Triangle plantations in the southeastern portion of the state near the Victorian border, to a consortium led by the Campbell Group for $670 million.
Under the deal, The Campbell Group LLC (TCG) will oversee the forests for the next three forward rotations – a period covering approximately 105 years. Forestry SA, a state government body, will continue to manage the forests.
Snelling says both domestic supplies of timber and the overall health of the state’s forestry assets will be guaranteed by a number of conditions attached to the deal, which cover areas such as rotation length, commitment to domestic supply, reporting requirements and replanting obligations.
Under these conditions, TCG will have to match Forestry SA’s current level of planned viable domestic supply, exports will have to be conducted through current Forestry SA processes and export contracts will be limited to two years.
TCG will be able to use the land for forestry purposes only and will have to replant areas which are felled or destroyed by fire.
The agreement leaves the government with the power to take back control of the forests if serious breaches of these conditions occur.
TCG president and CEO John Gilleland says the assets in question were among the best softwood plantations in Australia, and that the group had sought quality timber assets in that part of the world for some time.
The government says it will reinvest the proceeds of the sale in roads, schools, hospitals and government infrastructure.