Iwi buy into Kaingaroa Timberlands

A collective of six central North Island iwi has bought a 2.5 per cent stake in New Zealand's largest forestry business, Kaingaroa Timberlands.

It bought the stake from the New Zealand Superannuation Fund for an undisclosed sum.

The deal reduces the Super Fund's stake in Kaingaroa from 41.25 per cent to 38.75 per cent, but it remains the largest shareholder.

The other shareholders are Canada's Public Sector Pension Investment Board, with 30 per cent, and an affiliate of the President and Fellows of Harvard College with 28.75 per cent.

The six iwi organisations, Ngati Rangitihi, Ngati Whakaue Assets and Te Arawa River Iwi Limited Partnership, Ngati Whare, Raukawa, Te Arawa Group Holdings and Tuwharetoa, formed a holding company - Kakano Investment Limited Partnership - to acquire the stake.

Kakano chairwoman Vanessa Eparaima said the investment ensured iwi were involved in the forestry business itself as well as being the landowner.

Ninety per cent of the Kaingaroa Timberlands tree crop is on the 176,000 hectares of land that was returned by the Crown to eight central North Island iwi in 2008, in the largest single Treaty of Waitangi settlement to date.

"Kaingaroa Timberlands is a successful enterprise which provides not only significant annual returns to shareholders, but which now, through our investment, also further enhances iwi participation at all levels of the forestry business," Eparaima said.

She said that unlike most forestry investments, the size and maturity of the Kaingaroa Timberlands forestry operation meant immediate cash returns would be generated for Kakano from its investment.

Super Fund chief executive Adrian Orr said the involvement of Kakano was consistent with the fund's strategy to co-invest alongside partners with similar objectives and long time horizons.

"Iwi are natural investment partners for the NZ Super Fund and our hope is that this deal opens up further domestic co-investment opportunities with iwi and iwi collectives," Orr said.

The sale of the stake in Kaingaroa comes at a time when Maori groups are voicing increasing concern over falling carbon prices.

Tradeable carbon credits were set up under the Emissions Trading Scheme (ETS) to encourage the growing of trees to absorb carbon dioxide.

Last month the Iwi Leadership Forum threatened to lodge a $600 million Treaty of Waitangi claim unless the Government acted quickly to shore up carbon prices, which fell to just 14 cents a tonne in January.

When the ETS was created in 2008, carbon prices of $25 a tonne were forecast.

A spokesman for the iwi leadership group on climate change, Chris Karamea Insley told Radio New Zealand today that one million hectares of Maori land could be planted over the next decade if Government found a way to stimulate carbon prices.

Fairfax Media