Plans to construct the world’s largest prawn farm at Legune Station in Australia’s Northern Territory have been deemed unviable by the ASX-listed Seafarms.
According to news reports, the company’s share price fell by 42 percent on 31 March after a review into Project Sea Dragon revealed that the venture was “not viable in its current form”. Seafarms said that the review highlighted a “number of challenges, as well as opportunities to de-risk the project.”
However, the key finding was that the firm needed to “pilot and prove up” its ability to grow shrimp at the Legune site as the project would “not generate acceptable financial returns” and courted “unacceptable risk[s]” around biosecurity, environmental conditions and the site’s remote location. The report also stressed that Project Sea Dragon’s grow-out ponds were “unproven in Australia”.
When addressing shareholders about the review, Project Sea Dragon’s (PSD) CEO Mick McMahon said that there was no funding to proceed with the project, even if the firm thought it was viable. McMahon, who joined PSD last year, told shareholders, “…it’s fair to say we were shocked at what we found when we came into the business.”
“I feel significant responsibility to shareholders who have invested their money into this company and especially those who have done so since I came into the business. To them I apologise for what we’ve had to present today.”
The project courted its fair share of sceptics when it – and its $2 billion price tag – was first pitched in 2012. The firm often spoke about its plans to produce over 100,000 tonnes of black tiger prawns each year from its remote site in the Northern Territory.
The Legune station site was going to host a smaller pilot project and the company told shareholders that this would take up to three years to “re-scope, construct and conduct with minimum infrastructure” and that funding remained a challenge even for a smaller pilot project.
Phase-one construction at the site began in 2021, with 21 ponds partially built. This work will now be put on hold after the 31 March announcement.
In 2015, Project Sea Dragon received a major project status from the Northern Territory and Federal governments. Reporting estimates that the Northern Territory has spent $50 million on infrastructure to bring the project online.