GROWER-owned agribusiness Free Eyre is continuing on its mission to build a grain export facility, with the purchase of 140 hectares at Sheep Hill on the east coast of Eyre Peninsula.
The $1.4-million purchase from former port proposal partner Centrex Metals was finalised on Monday and included all state government approvals and previously undertaken feasibility and environmental studies.
Free Eyre chief executive officer Mark Rodda said the company paid the deposit on the land, with the rest paid by a "private investor".
"We will now work with the Department of Planning, Transport and Infrastructure to make variations to the existing approvals because the new business model is for the exclusive storage and exporting of grain - not minerals," he said.
RELATED READING:EP ports draw in strong interest
Overall the development, to be called Port Spencer, is estimated to cost between $140m and $180m to build and will include the latest in throughput technology.
Mr Rodda said they aimed to have debt and equity capital raised by September, after which they would begin contracting for construction.
They would be targeting high net-worth family offices, super funds, institutions and major banks.
"We will also approach our shareholders, who will already have a stake in the development, to see whether they would like to increase their shareholding," he said.
Latest grain technology used
THE proposed Port Spencer development will use the latest in grain shipping technology to ensure it is competitive with the incumbent system, according to Free Eyre chief executive officer Mark Rodda.
The 140-hectare site, 70 kilometres north-east of Port Lincoln, will house 1 million tonnes in bunker storage, 50,000t in silo storage, 100,000t of shedding to allow for fumigation and a specially-designed modular jetty.
It was the jetty technology that Mr Rodda said inspired Free Eyre to continue with its own port development.
"We had considered getting involved in other port proposals in the works, such as the T-Ports trans-shipment project at Lucky Bay and Iron Road at Cape Hardy, but then we saw Rio Tinto using this new modular jetty technology in Qld and we knew we could make it work here," he said.
"There is also an advantage in being a one-commodity port - we don't have contamination issues and can promote a cleaner image."
The prefabricated module design meant the 620-metre jetty could be built for $40 million to $50m - a fraction of a former Centrex Metals proposal at $280m.
"This new technology suddenly allowed us to build a 1mt-capacity port for between $140m to $180m," Mr Rodda said.
Free Eyre chairman John Crosby expected the benefits from the new development to local growers would be threefold - firstly from extra competition in the grain handling industry, freight savings from reduced travel and the ability to transport straight to port.
"Because of the location of Port Spencer, many growers will benefit from a freight saving of a 140km round trip," he said.
"There will also be less trucks heading into the Port Lincoln township, and we will continue to talk with all levels of government in relation to infrastructure requirements, particularly local road upgrades."
The company is aiming to have the site built within 18 months, ready for the 2020 harvest.
"It's a tight turnaround, but it is still doable," Mr Rodda said.
Mr Rodda said they already had 300,000t in preliminary grower commitments and was confident the site would be well patronised.
"About 75pc of the grain produced on the EP is grown by our 475 shareholders," he said.
"Plus, in an average year, more than 1.2mt of grain is grown closer to Port Spencer than any other EP port location."
RELATED READING:Businesses to join up on the EP
- Start the day with all the big news in agriculture. Click here to sign up to receive our daily Stock Journal newsletter.