Chinese seal $700m Ord River deal in WA

People arrive by boat on the Ord River, Kununurra. Photo / Supplied

Western Australia says it's ready and willing to hand over more land to China and other foreign investors, after clinching a $700 million deal to lease over 13,000 hectares of prized land in its Kimberley region.

The vast tracts of land in the Kimberley, made viable by the $500m federal and state Ord River irrigation scheme, will be leased for up to 50 years by Chinese conglomerate Shanghai Zhongfu.

The conglomerate will operate in Australia as Kimberley Agricultural Investment (KAI).

The Chinese real estate company plans to build a $450 million sugar mill near Kununurra, which is intended to produce four million tonnes of sugar cane and 500,000 tonnes of export sugar crystal.

With 1700ha in the Ord's West Bank area retained by the state government to sell to other crop producers, and KAI planning to sub-lease 20 per cent of its land to local growers, the ambitious plan for the area to become a national "food bowl" was in part retained.

WA Premier Colin Barnett and Regional Development Minister Brendon Grylls confirmed the deal on Tuesday, after widespread reports last week that the Chinese bid had beaten Australian Agricultural Company (AACo), which wanted the land to grow cotton.

Mr Barnett said the deal, which was done with the input and cooperation of the local Miriuwung and Gajerrong people, was a pioneering move.

"Western Australia is 20 years ahead of the rest of the country in our engagement with Asia and particularly China," Mr Barnett said.

"I think it will be the forerunner of more overseas investment, particularly from China, into the agricultural industry.

"This is one spectacular way of diversifying our economy and developing the north of the state."

Mr Grylls was coy when asked what KAI was likely to pay for the lease in the Goomig and Knox Plain areas, with commercial negotiations to take several more months.

"The rent on pastoral country is not the same as a fully fledged farm. It will be a commercial rent, and the valuer-general will be give us his advice on what that is worth," Mr Grylls said.

"But remember we are looking to attract a $700 million investment, and this land will be retained in ownership by the people of Western Australia."

With federal Special Minister of State Gary Gray looking on, KAI chief executive JianZhong Yin said there were still challenges to overcome in WA and the company had a firm eye on expansion into the Northern Territory.

"There are still significant challenges ahead to develop this project to its full potential and achieve the economies scale KAI requires for this to be commercially viable," Mr Yin said.

"But we have the skill set to overcome the many challenges this project represents."

Edna O'Malley, chairwoman of the Miriuwung Gajerrong Corporation, said the flow of jobs and training for local people would be invaluable.

"We had the American farmers coming through on Ord Stage 1 and were not consulted," Ms O'Malley said.

"On this project we have got now, we are a partner with them and with the government.

"It is a big step for us.

"We have never done this partnership in Australia before with the indigenous people, and with development and farming - this is a new path we are taking, and I believe it is a good one."

- AAP