Chinese-backed agribusiness awarded largest water extraction licence in NT

by | Apr 8, 2021 | Business, News | 0 comments

A Chinese-backed agribusiness company has received the largest groundwater extraction licence in the history of the NT to use 40,000 megalitres of water a year for a major fruit and vegetable project in Central Australia that will mostly supply China.

The NT Government’s granting of the 30-year licence, announced today, makes it the Northern Territory’s single largest private water allocation.

Fortune Agribusiness Funds Management Pty Ltd, who became the owner of Singleton Station in 2016, intends to develop the 294,000-hectare pastoral property in the western Davenport region as one of Australia’s largest fruit and vegetable farms.

In September 2020, the company applied for a groundwater extraction license stating that they are willing to spend more than $150 million to establish a 3,500-hectare irrigation project at Singleton Station, about 150 kilometres south of Tennant Creek.

Fortune Agribusiness chairman Peter Wood had told the ABC last year that they would launch an eight-year development plan to grow a range of crops if their application was approved.

“In the first year we’d be looking to grow some fairly simple annual crops — we’ve got on our list onions and rockmelons, even hay,” he said.

“But our main focus is on some of the longer-term permanent tree crops, like citrus or grapes, and they’ll take some years to get to maturity.”

He said more than 70 per cent of their planned produce would be exported, mainly to Asian markets, particularly China.

However, some native title holders have strongly opposed the licence. The directors of the Mpwerempwer Aboriginal Corporation told The Guardian Australia they want the water to “stay in the country”.

“They can’t take that water,” representatives said. “We need that water to stay there, for the animals and the trees … for bush tucker and bush medicine.”

Environment Centre NT raises concerns

The Environment Centre NT criticised the government’s decision to grant the licence which it says “flies in the face of common sense, as well as science”.

“Despite overwhelming opposition by Territorians, the Water Controller has just approved the Territory’s largest ever groundwater extraction licence, which will permit Fortune Agribusiness to drain an ancient aquifer in the arid interior of the Territory by 40 billion litres per year,” said ECNT co-director Kirsty Howey in a statement this afternoon.

“This decision flies in the face of common sense, as well as science, and is likely to cause irreversible environmental harm.”

The ECNT added that they stand by their assertion that the decision is inconsistent with the declared Western Davenport Water Allocation Plan.

Charles Darwin University hydrogeologist Dylan Irvine told the ABC in February that the modelling he had seen was concerning and pointed to the Murray Darling Basin as an example.

“There’s modelling from Fortune Agribusiness that’s modelled potential drawdown from their operations,” he said.

“The issue with that model is it’s based on scant data, and we don’t know what the impact on salinity is going to be in the shallow aquifer region.

“Once approved, this water’s going to be made available for free, but if this water was being extracted from the Murray Darling Basin, we’d be talking in the order of $20 million a year for that water use.”

Dr Irvine said at 40,000 megalitres per year, the scale of the operation would be immense and eclipse the use of the entire town of Alice Springs, which uses about 9,000 megalitres a year.

According to the NT Environment, Parks and Water Security Department, the current water allocation plan identifies an Estimated Sustainable Yield for groundwater of 168,405ML/year, with 30,000 ML/year allocated to the environment and non-consumptive cultural use and 138,405ML/year available to be shared amongst consumptive users.

The department also said that should Fortune Agribusiness achieve all the necessary legal requirements and meet its licence conditions, at full development, 40,000 ML/yr of groundwater will be released in the following stages:

  • Stage 1 – 12 788 ML/yr for a period of 2 years from the approval date
  • Stage 2 – 22 845 ML/yr for a period of 2 years from the approval date
  • Stage 3 – 31 779 ML/yr for a period of 2 years from the approval date
  • Stage 4 – 40 000 ML/yr for a period of 2 years from the approval date

Northern Territory Controller of Water Resources Jo Townsend said the application was granted after rigorous modelling and data showed the licensed amount is sustainable and can be managed without adversely impacting other users, as well as environmental assets or cultural assets, if conditions are met.

Fortune Agribusiness released a statement welcoming the granting of the extraction licence and pledged to meet all requirements the government has placed on it, including establishing an ongoing environmental monitoring program. The company also said the 40,000 megalitres was “less than 0.03 per cent per annum of the overall aquifer volume”.

“We will continue to engage with our stakeholders, neighbours and the broader regional community to ensure that factual information on the project is easily available as we seek to maximise local economic and job opportunities,” the statement said.

A 30-day review period is now underway with the full notice of decision available here.

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