A TERRITORY investment fund is shaping as a potential major backer of an ambitious $235 million plan to launch a space industry in Arnhem Land.
The NT Industry Development Fund, with its initial $200 million of capital provided by the NT Government from the sale of the Territory Insurance Office, is in the process of completing a due diligence.
The company behind the space proposal is Equatorial Launch Australia.
Documents obtained by the NT News show ELA has been in detailed discussions with the investment fund whose manager, Infrastructure Capital Group, has recommended to the NTIDF not to invest “at this stage” but to continue with assessment.
NTIDF chairman Les Fallick confirmed to the NT News the space base was one of 20 potential projects being canvassed by the fund. He said it was in the top 25 per cent of the fund’s potential projects.
“We have given this investment opportunity significant attention,” he said.
“We have done significant levels of due diligence and if the economics are right it will move up the list quite quickly.”
Apart from funding, two key issues for ELA involve security of land tenure and the demand for service.
NASA and the Defence Department appear likely clients, although a number of private companies including SpaceX, Rocket Lab, Virgin Galactic and Vector Space could also create demand.
NASA has visited the launch site for the proposed Arnhem Land Space Centre, which is located about 30km south of Nhulunbuy.
The site provides a commercial advantage, given the proposed facilities would be 12 degrees from the equator.
The proximity to the equator lowers the launch costs by up to 50 per cent.
The area on Gove Peninsula, near where tracking satellites once operated, belongs to Galarrwuy Yunupingu’s Gumatj clan.
The proposal envisages leasing a larger area to Gumatj Corporation, the traditional owner’s main corporate vehicle, which would then have a portion subleased to ELA.
The Northern Land Council was expected to start discussions soon.
Nhulunbuy is looking for industry to replace the closure of Rio Tinto’s alumina refinery in 2013. ELA is seeking $10.6 million equity funding for its first stage. Stages two and three would cost $225 million.
The space centre would be capable of launching ‘suborbital vehicles’ and some ‘low earth orbit’ satellites during the first stage. The suborbital market is said to be worth US$2 billion and is concentrated in the US.
Adding to ASC’s commercial potential is a backlog of nano/microsatellites during 2016 which needs to be cleared, while demand for service is expected to grow by 23 per cent by 2020.
ELA is founded and owned by Scott Wallis and John Carsten. The company is staffed by former senior Australian Defence Force space industry experts.
The NTIDF is Australia’s only infrastructure fund dedicated to a specific location.
The fund was established in 2015 by the Giles Government with the initial $200 million from the sale of TIO.
The Gunner Government honoured this amount, but a subsequent $200 million commitment by the Giles Government in its 2016 Budget was never agreed upon.
Mr Fallick and NTIDF board member and former chief executive of the Future Fund Mark Burgess have been in discussions with other “regional sovereign funds” to attempt to add another $400 million or $500 million.
Ashley Manicaros, NT News (Northern Territory)