What’s happening with the Rookwood Weir water

Here’s who successfully bid for Rookwood Weir’s water in the first tender, and what they plan to do with it.

The successful bidders of the first tender for Rookwood Weir water plan to build macadamia orchards on surrounding land, however smaller parties may be able to bid for a share of the water in the second stage.

Two companies, Rural Funds Management and Argyle Capital Partners were the successful tenderers for the first stage of Sunwater’s Rookwood Weir water sales process, completed in December 2020.

A SunWater spokesman said these two bidders accounted for 30,000 megalitres of water.

The second stage of the water tender is expected to take place in 2022.

“A minimum of 7,500 megalitres will be available in smaller lots, capped at a maximum purchase of 500 megalitres,” the SunWater spokesman said.

“[There] has been considerable interest in this tranche, which is aimed at smaller operations that need water to expand or diversify their operations.

“The water is available to landholders and businesses looking to expand or diversify their enterprises, improve productivity and add value to their current production through greater water supply.”

However, bidders from the first stage are also eligible to submit tenders for the second stage.

Access to the water allocation sold through both tenders was expected to be available in 2023, following the commissioning of the weir, the spokesman said.

Argyle managing director Kim Morison said they were examining a range of applications for the water.

“Our intention is to invest additional capital to develop expanded areas of high value crops in that region,” he said.

Mr Morison said Argyle anticipated this would lead to increased economic activity and employment opportunities in the area.

“We typically co-invest with local family farm operators and assist them to expand their operations or increase their productivity,” he said.

He said that separately, Argyle also managed investments in water entitlements across a range of waterways in Australia, which it typically leased entitlements to irrigation farmers over multiple year periods.

“In more liquidly traded water markets, like the southern Murray-Darling Basin, we also sell annual water volumes to irrigation farmers under forward and spot market contracts throughout each year enabling them to manage water supply risk across different seasonal conditions,” he said.

SunWater has tipped that Argyle intends to expand its existing investments in irrigated agriculture in the Fitzroy Basin, including a macadamia orchard.

RFM’s general manager of investment relations James Powell said parent company Rural Funds Group (RFF) exchanged contracts to acquire 21,600 megalitres of water for $32.4 million, as disclosed on the ASX on December 17, 2020.

He said RFM planned to develop about 2,500ha of macadamia orchards near Rockhampton.

RFM announced in August 2020, it had acquired a number of cattle properties in Rockhampton, with the purpose of converting them into macadamia farms.

According to an RFM newsletter, the company plans to lease the cattle properties before converting them to macadamia orchards.

Mr Powell confirmed RFM did not intend to sell the water, which would only be applied to its macadamia orchards.

When asked about whether RFM would bid in the second stage, Mr Powell said, “RFM‘s understanding is that tender two is for parcels less than 500ML, enabling local landholders seeking smaller parcels to participate”.