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OneFortyOne buys forestry assets in SA

A sell-off of more than 250,000 acres of state-owned forestry assets in South Australia for $670 million will not impact long-term supplies of timber and will leave the state’s forestry assets in safe hands, according to the SA government. Source: The Australian, Design Build Source, ABC News

Treasurer Jack Snelling said the state would sell the assets located in the Green Triangle plantations near the Victorian border, to a consortium called OneFortyOne Plantations 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 said 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 that 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 chief executive officer 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 said it would reinvest the proceeds of the sale in roads, schools, hospitals and government infrastructure.

“To put the sale into context, the sale price of $670 million doesn’t even cover this year’s budget deficit of $867 million or next year’s budget deficit of $778 million,” opposition treasury spokesman Iain Evans said.

The new owners, OneFortyOne Plantations, said there will not be any major changes to how operations are managed.

Representatives from the consortium will meet key stakeholders and ForestrySA workers, who will continue to manage the forests for the consortium for five years.

Interim CEO Dave Rumker says he does not believe people will see any big changes.

“So we’ll be spending time in Mount Gambier as well as Adelaide over the next three months and we will locate a transitional office, likely in Adelaide for a period of time, before permanently locating in Mount Gambier.”