Darwin Biodiesel plant future uncertain By Alice Plate
Friday, 07/03/2008
Have you tried Territory biodiesel yet?
Chances are it maybe hard to get your hands on future supplies because Australia's biggest plant, in Darwin, has ceased production.
Natural Fuels limited didn't want to speak to the ABC, but according to the ASX, it's made a $40m loss in the last six months of last year.
And since inception, the company's share price has dropped from $1.50 to just 15 cents.
It's got the opposition's Terry Mills worried.
"Sadly, it doesn't look good, there are a number of reports that the production of biodiesel has almost reduced to a trickle and they are now relying on a byproduct called glycerine to keep the operation ticking over.
"I've also heard that they've had significant issues getting a supply of gas to run their operation and we've also had advice that the ASX has asked some serious questions regarding the operation."
The cost of the company's main ingredient, imported palm oil, has jumped dramatically.
"The time that the enterprise was embarked upon, the oilseed market, particularly palm oil was at a very different status and it was affordable, but soon afterwards the whole market changed. The value of oilseed increased threefold and with their expectation that there would be a stream opened up with the supply fo oilseed from the Northern Territory and that was not forthcoming."
He says he thinks the plant can recover, as long as there is research into growing more Territory oilseeds, such as soybeans, to supply it.
The Natural Fuels Australia plant had already made a deal with Perth-company Energy Crops Australia to trial plant 350 hectares of soybeans in the Daly, to produce biodiesel.
But, Managing Director of Energy crops Australia Terry Nichols says they're not worried because the deal was not binding, and they can find other buyers.
"We have a letter of intent that they will take it at a certain price if we wish to sell it to them. But they probably can't afford to deal with us because the world price of our product is well in excess of their ability to buy."
He says they have people ringing they on a daily basis to find out when they'll have soybeans available because Australia imports 450,000 tonnes of soybean meal and many thousands of tonnes of oil a year. He says the prices of soybeans has trebled in the last six months to $1,400 a tonne.
But, Energy Crops Australia were more concerned with what's happening in the Douglas Daly because they can no longer afford to invest there.
"The Douglas Daly has been crucified by the managed investment scheme where the price of land has escalated beyond all reality. Come By Chance sold for $15 million dollars, purchased for $1.4m four years ago. It's out of anyone's price range who hasn't got massive tax deductibility."
He says these companies will crucify the community and have devastating social implications.
"The Douglas Daly as a farming community is finished. When people are getting that sort of money they're just taking the money and running so there'll be no farming in the Daly, there'll be just trees."
He says he's aware of Great Southern Plantations, Timbercorp and another two forestry companies buying up land in the region.
Mr Nichols says their company will now look at planting in the Katherine area, but they need to ask their shareholders for more capital to do so.
In this report: Terry Mills, Country Liberal party; Terry Nichols, Managing Director, Energy Crops Australia
