A woodchip export business, touted as the driver for the controversial Port Melville development, is believed to be on the brink of collapse just one year after its first shipment.
It’s expected the NT government will announce on Saturday the Tiwi Islands forestry project, which sent off its first woodchip shipment in November last year, is likely to cease operations, Guardian Australia understands.
The venture had received a $6m grant from the federal government and a $2.8m loan from the NT government to buy equipment and upgrade infrastructure to get the first plantation to harvest. It’s unclear what will happen to the NT government loan.
The project was expected to provide between $140m and $150m in export income over the next five years, and create 60 to 80 jobs on the Tiwi Islands.
Tiwi traditional owners took control over tens of thousands of hectares of old Acacia plantation land in 2009, and with government support turned it into a community-supporting economic venture.
At the time, the Indigenous affairs minister, Nigel Scullion, said the venture showed “the great potential of how northern Australian communities can benefit from the business opportunities of the north”.
A spokesman from Plantation Management Partners declined to comment, but said they had made bookings for woodchip vessels recently.
In 2014, Tiwi leaders signed a memorandum of understanding with a Japanese company, Matsui & Co, to on sell the Tiwi woodchips.
Matsui & Co could not be reached for comment.
Shipment of the woodchips has been repeatedly cited as the raison d’etre for the controversial Port Melville development, which was approved without an environmental impact assessment, despite the company Ausgroup touting it as a hub for the oil and gas industry.
The decision by the federal environment minister to approve the $130m infrastructure project was overturned in October.
The ruling by Justice White quashed a decision by a delegate of the former minister Greg Hunt to allow the development without an environmental assessment.
Justice White’s ruling said the delegate’s “exercise of the power was ... uncertain”.
