June 9, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

The Shenhua aggregation, located on the Liverpool Plains and owned by Chinese mining giant Shenhua, had been earmarked for the development of Watermark – an open cut coal mining operation estimated to have a working lifespan of 30 years, over which time it had the potential to produce 290 million tons of coal. 

However, pushback against the project was strong, with locals fearing it would contaminate the region’s significant water resources and threaten the koala population.

In the end, the New South Wales government struck a deal with the
company last year whereby Shenhua agreed to end its coal mining plans for the land in exchange for A$100 million (US$71.7 million). 

This resulted in more than 16,000 hectares (39,527 acres) near Gunnedah being bought back by 10 local farming families and one institutional investor for A$120 million (US$86 million) after an unpredictable 13-year period.

It has now been made public that Gunn Agri Partners’ Transforming Farming Platform (TFP) was the institutional investor that acquired 6,000 hectares of mixed farming land that was part of this once-proposed coal mining site in New South Wales. 

Although the institutional investor was unidentified at the time, David Goodfellow, managing director with CBRE Agribusiness, who managed the Shenhua sale, said of the investor, “This entity’s investment strategy is also well-aligned to supporting the new koala corridors and regeneration of soils and native forests which may be suitable for projects to create carbon credits which are quickly becoming very valuable given the current demand to achieve targets of net zero emissions.”

The Launch of TFP

Australian ag asset manager Gunn Agri, with more than A$450 million in AUM and commitments, launched TFP in Q4 2021 with a cornerstone investment commitment of A$50 million (US$37.6 million) from the Australian government’s Clean Energy Finance Fund (CECF), and a matching A$50 million commitment from ag impact investor Kempen SDG Farmland Fund.

As Gunn Agri’s second investment vehicle, the platform includes mixed farming assets spanning the major cropping regions of Australia, focusing on capital investments in underperforming small-to-medium sized farms with the goal of lifting productivity and the optimization of land use by integrating row crops, grazing, carbon sequestration, biodiversity conservation, and other natural capital assets at an institutional scale.

To do this, this science-led initiative will avail itself of expert advice from leading agronomists and environmental advisors, including Australia’s CSIRO, to facilitate the adoption of data-driven practices such as regenerative farming methods and the latest land management.

Leveraging data from the CSIRO, including data from their Yield Gap research, the platform will examine cropping systems, crop variabilities, and weather and soil data to transform farms into productive and resilient operations with improved yields, reduced carbon emissions, and with the ability to sequester carbon.

“The Liverpool Plains transaction is a prime example of the execution of our strategy,” said Bradley Wheaton, Gunn Agri’s portfolio manager of TFP. “Of the 6,000 hectares acquired there is some highly-productive black soil cropping, there is significant transformation potential of areas previously underutilized as unimproved pasture and there are areas that will be managed for environmental conservation.  We realign the use to reflect the sustainable potential of the land, improving productivity using regenerative agricultural practices and delivering biodiversity, soil and vegetation carbon sequestration.”

This acquisition brought The Platform’s portfolio to more than 12,500 hectares of mixed farmland, acquired through eight transactions conducted since October 2021.

“As agricultural asset managers for institutions there is complete transparency in our financial performance,” said Wheaton. “What we believe is ground-breaking is that we have embedded the same accountability in the delivery of soil carbon, carbon in vegetation, emissions reduction, biodiversity, inclusive and diverse employment practices and other measures of sustainability.”

Importantly, the deal also enabled the property to be returned to agricultural production, creating significant natural capital assets, including the formation of over 6,700 hectares of Koala habitat conservation areas managed by the NSW State Government.

The acreage acquired by TFP is adjacent to the Koala habitat, with a common boundary stretching 35 kilometers. And in a coordinated effort, the Platform manages a suitable portion of its own land as koala habitat.

“We are pleased to see the rapid growth of the Transforming Farming Platform, and the positive local benefits that are associated with this latest acquisition,” said Rory Lonergan, executive director, CEFC. “We can already see the advantages of this integrated farming model, which has the potential to deliver energy efficiency improvements to farms as well as optimized production, soil carbon, biodiversity, and other environmental outcomes.”

Lonergan concluded, “This is a great demonstration of how a focused approach on regenerative farming practices can deliver a positive outcome for farmers, agriculture, emissions reduction and local landscapes.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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