Sale of farm for mill allowed

The Overseas Investment Commission has approved the purchase of a Coromandel dairy farm by a Malaysian lumber company.

Blue Mountain Lumber, a subsidiary of Malaysian company Ernslaw One, is buying a 182ha Whangapoua farm, on which it will build a $25 million to $30 million sawmill to process timber from its leased Coromandel pine forest.

Local dairy farmers Jean and Paul Bibby have opposed the sale, saying the mill could hurt the area.

A statement from Blue Mountain Lumber said the farm would remain a working dairy farm and it wanted only 10ha of the land for the sawmill and its related energy plant, kilns and planner mill.

The commission's statement said its approval was subject to conditions, including that the property continue as a dairy farm until resource consents for the mill operation were approved and that land not used for the mill would still be farmed.

Mr Bibby yesterday criticised the approval and said a group was being formed to oppose the site and object to resource management consents.

"The secrecy and apparent ease with which the sale was approved is shocking," he said.

"Negotiations have been conducted with the Thames District Council with what can only be described as extreme secrecy for the last three years.

"Locals only stumbled over the plan by accident."

Mr Bibby said the sale of farm land was not needed as Ernslaw One's leased forest site would be suitable for a sawmill and there was space in Whitianga's industrial area.

He was also concerned about potential contamination of Whangapoua Harbour by chemicals used in the mill process.

"Mills like this give off turpentine gases, use toxic chemicals for wood bleaching and treating and require toxic ash waste dumps for the ash created by the burning of sawdust," Mr Bibby said.

"It appears that settlement ponds for mill run-off may be as close as 10m from the Awaroa River, which feeds into the harbour."

The commission said in its decision that the mill would create new jobs, introduce development capital, increase market competition and productivity and increase processing of primary products.

Since starting business in New Zealand, Ernslaw One now owned or leased about 70,000ha of land - mostly in Coromandel, Hawkes Bay, Manawatu, Otago and Southland.

It also owned and operated the Conical Hill sawmill in Otago and had developed a douglas fir tree seedling nursery there.

- NZPA