Government Sells Forest Harvest Rights in South Australia
On 18 October 2012, ABC News reported that the Australian government revealed the price for the sale of future harvesting rights for forests in the south-east of Southern Australia. The harvest rights were sold for $670 million (£418 million) to a consortium led by the US company The Campbell Group.
**$670 Million Forestry Investment in South Australian Assets**
The Australian government said that it sold the harvest rights for $670 million, achieving a price above the reserve. The buyer is OneFortyOne Plantations, a consortium led by The Campbell Group, a forestry investment advisory company managing over 3.25 million acres in the US and Australia, and representing over $5.8 billion in timberland assets. The forestry assets are located in the Green Triangle, one of Australia’s major forest regions.
As noted in the company’s press release, the agreement will give The Campbell Group the right to oversee the forests, previously owned and managed by the government of South Australia, for the next three forward rotations, or a period of approximately 105 years.
“The Campbell Group has sought quality timberland assets in this part of the world for some time,” noted the company President and chief executive John Gilleland, adding that the acquired forestry assets were among the highest quality softwood plantations in Australia. “We are pleased to have completed the Green Triangle transaction to acquire the forward rotations, which are considered to be the preeminent softwood resource in Australia,” pointed out Mr Gilleland.
**The Sale Raises Concerns**
ABC News reports that the forest assets sale has already raised concerns and attracted protest in the south-east region, amid concerns about both jobs and the future of the timber industry. “There’s job security issues down at the south-east and it really does indicate what a mess the Government’s got the budget into,” notes Liberal treasury spokesman Iain Evans, as quoted by ABC News.
!m[Consortium Led By The Campbell Group Makes $670 Million Forestry Investment](/uploads/story/610/thumbs/pic1_inline.png)In addition, there are also concerns about the price paid by OneFortyOne Plantations, with Rob
Brokenshire, an MP chairing a parliamentary investigation, commenting that the forests have been sold too cheaply although the deal did not include the land. “Having been chair of the select committee we’ve had a detailed look at this, we’ve had expert evidence and the asset is worth a minimum of $950 million and up to $1.2 billion and the Government is clapping its hands saying ‘Look what a good job we’ve done in privatising it for $670 million’,” pointed out Mr Brokenshire, as quoted by ABC News.
The SA government, however, has responded that the price was “substantially” above the reserve, with SA Treasurer Jack Snelling noting that the government had not undervalued the asset.
**South-East Timber Industry in “Safe Hands”**
Mr Snelling also commented that the forestry assets deal incorporated provisions aimed at ensuring the future for the south-east timber industry. “I am extremely confident that with its history as one of the world’s largest timber investment managers that the forests of the south-east are in safe hands,” Mr Snelling said, as quoted by ABC News. “A set of conditions proposed by community and industry leaders has been put in the sale contract to help ensure the long-term future of the industry.”
The Campbell Group is likely to manage its new Australian forestry investment by opening an office in South Australia. It has also indicated that it will work closely with the local community, including by means of the Grow the Good Programme, where local offices are given seed money to invest in non-profit organisations of their choice.
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