KIMBERLEY Cotton Company has approved the commencement of construction of the cotton gin at Kununurra in Western Australia, with operation planned to commence in the second half of 2025.
Namoi Cotton holds a 20 percent interest in KCC, and has been contracted by KCC to build and operate the cotton gin.
KCC has been established by local growers to construct and manage the cotton gin. This project is supported by $34 million in non-recourse debt from the Northern Australia Infrastructure Facility, $9 million in direct and indirect grants from the West Australian Government, and cotton supply agreements with growers. The new cotton gin will have the capacity to service the forecast production of 100,000 – 150,000 cotton bales in the Ord River irrigation area.
KCC has obtained development approvals and selected preferred contractors for approximately 65% of the budgeted ~$60 million construction cost, which includes an additional $6 million in construction cost for a variation in scope to meet local air and noise requirements.
To fund construction of the cotton gin, KCC is raising an additional $7M in equity comprising convertible notes and shares, and its board is confident this can be raised from existing and if required, new shareholders.
Namoi Cotton intends to contribute $1.4M to this additional capital raising to maintain its 20pc
interest in KCC and Board representation, increasing its investment in KCC to $4.2M.
As previously announced, Namoi Cotton’s total investment in KCC and cotton gin project is expected to be approximately $7M.