Aquaculture in Saline Groundwater Evaporation Basins

A report for the Rural Industries Research and Development Corporation

by Fiona Gavine and Michael Bretherton

July 2007

RIRDC Publication No 07/114 RIRDC Project No MFR-3A

ISBN 1 74151 511 4 ISSN 1440-6845

Aquaculture in Saline Groundwater Evaporation Basins Publication No. 07/114 Project No. MFR-3A

The information contained in this publication is intended for general use to assist public knowledge and discussion and to help improve the development of sustainable regions. You must not rely on any information contained in this publication without taking specialist advice relevant to your particular circumstances.

While reasonable care has been taken in preparing this publication to ensure that information is true and correct, the Commonwealth of Australia gives no assurance as to the accuracy of any information in this publication.

The Commonwealth of Australia, the Rural Industries Research and Development Corporation (RIRDC), the authors or contributors expressly disclaim, to the maximum extent permitted by law, all responsibility and liability to any person, arising directly or indirectly from any act or omission, or for any consequences of any such act or omission, made in reliance on the contents of this publication, whether or not caused by any negligence on the part of the Commonwealth of Australia, RIRDC, the authors or contributors.

The Commonwealth of Australia does not necessarily endorse the views in this publication.

This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. However, wide dissemination is encouraged. Requests and inquiries concerning reproduction and rights should be addressed to the RIRDC Publications Manager on phone 02 6271 4165.

Researcher Contact Details Fiona Gavine Department of Primary Industries Private Bag 20 Alexandra Victoria 3714

Phone: 03 5774 2208 Fax: 03 5774 2659 Email: [email protected]

In submitting this report, the researcher has agreed to RIRDC publishing this material in its edited form.

RIRDC Contact Details Rural Industries Research and Development Corporation Level 2, 15 National Circuit BARTON ACT 2600 PO Box 4776 KINGSTON ACT 2604

Phone: 02 6271 4100 Fax: 02 6271 4199 Email: [email protected]. Web: http://www.rirdc.gov.au

Published in July 2007 Printed on environmentally friendly paper by Canprint

ii Foreword

Inland salinity is a critical problem in Australia that has rendered large areas of agricultural land unproductive and caused a marked deterioration in the quality of surface waters. Large-scale evaporation basins have been built as an engineering response to this issue. These schemes are costly to build and operate and this project investigated the potential role of aquaculture in offsetting some of these costs.

Inland saline aquaculture is still largely in the experimental phase in Australia. The Rural Industries Research and Development Corporation (RIRDC) has been an early investor to-date in keeping with its charter to operate across sectors. Recently, a National Research and Development (R&D) Strategy for commercialisation has been published by the Fisheries Research and Development Corporation (FRDC) and an implementation program has begun to co-ordinate the commercialisation of inland saline aquaculture R&D in Australia.

The specific aim of this research project was to investigate the commercial viability of aquaculture in inland saline waters by setting up and operating a pilot scale system at a salt interception scheme (SIS) in northern Victoria. The results showed that aquaculture could be commercially viable in inland saline waters and would contribute to the costs of operating the SIS, provided the appropriate species and technologies were adopted for the resources available. This research has direct relevance to organisations involved in the management of a SIS as well as regional communities adjacent to the evaporation basins that may be able to capitalise on the opportunity of building a new rural industry.

Australia’s rural industries make a fundamental contribution to the Australian economy and way of life. In addition to the major industries, numerous new and emerging rural industries bring opportunity, diversity and resilience to rural Australia. The Rural Industries Research and Development Corporation invests in new and emerging industries on behalf of government and industry stakeholders. New industries provide opportunities to be captured by rural producers and investors. They also provide avenues for farmers facing adjustment pressure to diversify and manage change. The establishment of new industries contributes to community resilience and regional development. Increasingly, new industries are also contributing to a distinctive regional character in rural Australia.

New industries face a number of challenges – developing product quality and quantity, developing markets and supply chains, and industry leadership. Many of these issues are underpinned by research and development. Often, too, they are hampered by a lack of basic technical information, which is why RIRDC has invested in this report.

This project was funded from RIRDC Core Funds which are provided by the Australian Government. This report, an addition to RIRDC’s diverse range of over 1600 research publications, forms part of our Environment and Farm Management program, which aims to foster the development of agri- industry systems that have sufficient diversity, integration, flexibility and robustness to be resilient enough to respond opportunistically to continued change.

Most of our publications are available for viewing, downloading or purchasing online through our website:

• downloads at www.rirdc.gov.au/fullreports/index.html • purchases at www.rirdc.gov.au/eshop

Peter O’Brien Managing Director Rural Industries Research and Development Corporation

iii Acknowledgments

We gratefully acknowledge the co-investment, support and guidance of the directors of Pyramid Salt Pty. Ltd., Gavin Privet and John Ross who were instrumental in making this project work. Similarly, the staff at Pyramid Salt (including Desne, Danny, Wendy and Pete) provided invaluable support to the staff on site.

The funding support provided by the Federal Government through RIRDC and the Victorian Government through the Ecologically Sustainable Agriculture Initiative of the Department of Primary Industries (DPI), underpinned project activities and is acknowledged. During the course of the project, co-investment was also sought from the Innovation Key Project of Our Rural Landscapes Initiative of DPI to allow the Solar Pond™ technology to be integrated into aquaculture production.

Over the course of the three-year project a number of staff were employed and all of them made valuable contributions that are gratefully acknowledged. Jeff Boylan was the first project officer and was tasked with re-commissioning the site and upgrading the facility. Ben Powell took over after Jeff left and conducted the first technical trials at the site. Anthony Jenyns developed and refined the techniques developed by Ben and also began the arduous process of market development. Finally, Bill Balmer provided a reliable and consistently high-quality product that allowed us to meet the demands of the growing market. Bill was also a pleasure to work with.

The contribution of support staff at DPI Snobs Creek Centre including Morgan Edwards, Brendan Larkin and Geoff Gooley is also gratefully acknowledged.

Abbreviations

ANRA Australian Natural Resource Atlas (http://ea.gov.au/ANRA) AQIS Australian Quarantine and Inspection Service DPI Department of Primary Industries (Victoria) ESAI Ecologically Sustainable Agriculture Initiative (of the Victorian DPI) IAAS Integrated Agri-Aquaculture Systems ISA Inland saline aquaculture MDB Murray-Darling Basin MDBC Murray-Darling Basin Commission NAC National Aquaculture Council NAP National Action Plan (for Salinity and Water Quality) ORL Our Rural Landscapes Initiative of Victorian Government R&D Research and Development SIS Salt Interception Scheme

iv Contents

Foreword...... iii Acknowledgments...... iv Abbreviations...... iv Executive Summary ...... vii Introduction ...... 1 Salinity in the Murray-Darling Basin (MDB) ...... 2 Large-scale salt interception schemes in the MDB ...... 2 Status of Inland saline aquaculture in Australia...... 3 State R&D Programs...... 3 Commercial developments ...... 4 Present study ...... 4 Objectives...... 5 Methodology ...... 6 Links with other projects and initiatives ...... 6 Results ...... 7 Development of a pilot scale inland saline aquaculture facility...... 7 Site selection ...... 7 Market survey...... 8 Literature review ...... 8 Development of a business plan...... 8 The aquaculture facility...... 9 Integration of Solar Pond™ technology ...... 11 Aquaculture production trials...... 14 Artemia production...... 14 Other species ...... 16 Viability of Artemia biomass production in saline groundwater...... 18 Markets and revenues...... 18 Production costs ...... 18 Cost-benefit analysis ...... 19 Links with other agri-business ...... 20 Demonstration and Extension ...... 21 Project communication...... 21 Media...... 21 Farm Walks/ Site visits...... 21 Business planning guidelines ...... 22 Site selection for Artemia biomass production...... 22 Selection of production technologies ...... 23 Government approvals and licensing ...... 24 Developing supply chains and markets ...... 24 Implications and Recommendations...... 25 References ...... 26 Appendices ...... 29 Appendix I: Initial Marketing Study ...... 29 Background ...... 30 Methods...... 30 Results ...... 30 Conclusions and Recommendations:...... 31 Appendix II: Literature review of Artemia (Artemia spp.)...... 32 Life History and Ecology ...... 32 Use in aquaculture...... 32

v Appendix III: Business Plan...... 35 Introduction ...... 36 Proposed aquaculture development...... 36 Production methods...... 38 Production estimates...... 38 Market analysis ...... 39 Cost-benefit analysis ...... 40 Appendix IV: Images showing infrastructure at the site...... 43

vi Executive Summary

What is the report about? This report summarises the outcomes of a project that investigated the potential role of aquaculture in utilising the extensive inland saline water resources that exist in many areas of Australia. Management of these saline resources often involves expensive, large-scale infrastructure. Aquaculture has the unique potential to offset some of these management costs by utilising existing resources (water, salt, land, infrastructure and energy) to produce other value-added commodities. In this study, the intensive culture of brine shrimp or Artemia spp.1 in an indoor tank system was evaluated for technical and economic viability.

Who is the report targeted at? This report is targeted at investors who may be considering inland saline aquaculture as a business opportunity. It provides technical, market and economic information that will assist them with their decision making. It also provides a framework for business planning that includes guidance on appropriate selection of sites and technology. The various government approvals and licences that may be required prior to development. It is also targeted at organisations involved in the management of a SIS as well as regional communities adjacent to the evaporation basins that may be able to capitalise on the opportunity of building a new rural industry.

Background Salinisation of land and water resources is a critical problem in inland Australia that has rendered large areas of agricultural land unproductive and caused a marked deterioration in the quality of surface waters. In the Murray-Darling Basin (MDB), an engineering solution to the salinity problem, in the form of large-scale Salt Interception Schemes (SIS), has been adopted. These schemes work by intercepting saline water flows and disposing of them, usually by evaporation. A number of SIS have now been built across the MDB, with more being planned or built even though these schemes are expensive to build and have high ongoing operating costs.

Aims/ objectives Specifically, the objectives of this project were: • To develop a commercially viable aquaculture system applicable to existing and planned saline evaporation basins throughout the Murray Darling Basin • To develop business planning guidelines applicable to aquaculture in inland saline waters.

Methods used Under this project, an aquaculture production facility was set up and operated at a saline water evaporation basin in northern Victoria. The industry partner in the project, Pyramid Salt Pty. Ltd., currently owns and operates a salt water interception scheme at Pyramid Hill, south of Kerang, that producing various quality grades of salt. Some aquaculture infrastructure was already on-site due to earlier trials conducted by Pyramid Salt, but this had been unused for many years and required extensive upgrading and repair. A staged approach was adopted for the development of the pilot scale aquaculture venture at Pyramid Salt:

• A market survey was undertaken on potential aquaculture species • A literature review was conducted to identify optimal production scenarios • A business plan was developed • The aquaculture facility was upgraded and the demonstration site commissioned and • Solar Pond™ technology was integrated into aquaculture production.

1 Referred to in this report as Artemia.

vii Results/key findings The site was commissioned in March 2004 and the project focussed on the production of frozen 125g blocks of Artemia biomass for sale to the Aquarium industry, primarily in Melbourne. The production methods, yields and revenues of biomass production are summarised in this report and used to assess the future viability of commercial production at the site. Trials were conducted with other species, but they were largely unsuccessful and it was concluded that co-production with fish and crustaceans was not compatible with intensive Artemia biomass production in an indoor tank system.

Potential links with other agri-business that could be developed in an integrated salt production, aquaculture and agriculture venture were investigated. It has been estimated that for every 1 ha of evaporation basin, 50 ha of agricultural land is rehabilitated, which invites the option of moving to higher value agricultural production on the rehabilitated land.

The results of this project have demonstrated that the production of Artemia biomass at salt interception schemes can be viable, with the appropriate selection of sites and production technology to maximise production and minimise costs. The prevailing climatic conditions will determine the extent to which water heating is required over the year and this will have a major bearing on the design and operation of the facility, particularly if there is no ready access to Solar Pond™ technologies.

Implications and recommendations The technology and the production techniques developed under this project are directly transferable to other evaporation basins in the MDB. In addition to the opportunities explored under this project, other options should be investigated to increase the economic sustainability of the operation, including:

• New markets for Artemia biomass: There is a large, unsatisfied market for live Artemia in Melbourne and other capital cities that was not explored during this project. This appears to be a lucrative and easily accessible market if an appropriate supply chain could be developed • Improving yields from production tanks: Although good yields were obtained during the project, these could be improved through the refinement of feeding and water exchange regimes.

It should be noted that the aquaculture venture developed under this project represents only one aspect of inland saline aquaculture applicable to saline groundwater interception schemes. Other aquaculture options that need further investigation include the stocking of Artemia in the evaporation ponds themselves for cyst production. This is more likely to be viable at the larger evaporation basins such as the new development at Pyramid Creek, also near Kerang in northern Victoria. There is also potential to develop other species (including fish and crustaceans) in the outdoor ponds provided that culture does not impact on the quality of water available for salt production.

viii

Introduction

Salinisation of land and water resources is a critical problem in inland Australia that has rendered large areas of agricultural land unproductive and caused a marked deterioration in the quality of surface waters. Two forms of salinisation are recognised in Australia (ANRA, 2001), namely:

• Naturally occurring salinisation which reflects the development of the Australian landscape over time and • Secondary salinisation which is a result of land use impacts by people. This form of salinisation occurs within irrigation systems (irrigation salinity) and dryland farming management systems (dryland salinity). This anthropogenic salinisation mobilises salt in the soil profile that reaches the groundwater and is transported to the surface as the water table rises.

In 2000, it was estimated that at least 2.5 million hectares (or 5%) of cultivated land in Australia was affected by salinity (AFFA, 2000), with alarming projections that this could rise to 12 million hectares (22%) if immediate action was not taken. Some studies have suggested that the total area of affected land could be as high as 17 million hectares by 2050 (ANRA, 2001). Figure 1 shows the areas of Australia that the ANRA report forecast to be were at most risk from dryland salinity, with large areas of Victoria, Western Australia and Queensland under threat. Land and water degradation in Australia is estimated to cost up to $3.5 billion per year (excluding pests and weeds) (AFFA, 2000). In response to this grave threat to the Australian environment a National Action Plan (NAP) for Salinity and Water Quality was developed to provide a co-ordinated approach to salinity management and mitigation (AFFA, 2000). The NAP provides a framework for an integrated approach to the future management of the salinity problem in Australia through the setting of targets and standards for natural resource management on a catchment and/or regional basis.

Figure 1: Areas forecast to contain land of high hazard or risk of dryland salinity in 2050 (ANRA, 2001).

Salinity in the Murray-Darling Basin (MDB) The MDB is a naturally saline environment in terms of its soils, geology, surface water and groundwater and vast stores of salt are contained in the soil and shallow groundwater. Problems with rising water tables and land salinisation arose soon after the establishment of the first irrigation schemes in the 1890’s (MDBC, 1999). By 1987, 96,000 hectares of irrigated land were salt-affected and 560,000 hectares of irrigated land had water tables within 2 m of the surface (MDBC, 1999). A 1999 audit of salinity in the MDB identified and quantified sources of salt in the basin and established trends in salt mobilisation in the landscape (MDBC, 1999). The audit clearly identified the severity and scale of the salinity threat to the basin and the key findings were:

• Most of the salt mobilised does not get exported through the rivers to the sea. It stays in the landscape or gets diverted into irrigation areas and floodplain wetlands • The salt mobilisation process across the major river valleys is on a very large scale and this will double over the next 100 years • Salinity levels are rising in tributaries of the Murray-Darling system with several tributaries already exceeding the threshold for desirable drinking water (800 EC) and others will deteriorate significantly in the next 20-100 years • Future salt exports will shift from irrigation induced sources to dryland sources and • The average salinity of the lower Murray River at Morgan (South Australia) would exceed the 800 EC threshold for desirable drinking water in the next 50-100 years. By 2020, it will exceed the 800 EC threshold 50% of the time.

The diversion of irrigation drainage water and the pumping of saline groundwater to salt disposal basins has historically been used to reduce regional water tables and stop saline water reaching the Murray River (Allan et al. 2001b). The use of evaporation basins for this purpose was first recorded in 1917 and there are now around 190 located along the Murray River, most of which are small-scale basins that deal with local drainage. Over the past 20 years, however, there has been a shift towards larger-scale salt interception schemes in irrigation areas that are located off the flood plain (Allan et al. 2001b).

Large-scale salt interception schemes in the MDB Salt interception schemes (SIS) are large-scale engineering solutions to salinity. They work by intercepting saline water flows and disposing of them, usually by evaporation. Since 1988, the Federal Government, through the MDB Commission has co-invested with NSW, Victoria and South Australia to construct 13 SIS in the Murray-Darling Basin (MDBC, 2003a), with many more planned. In addition, there are also a number of smaller, privately owned or state owned interception schemes.

Recognising that salt from the whole catchment ultimately ends up in South Australia, the aim of the MDB strategy was to reduce river salinity at Morgan in South Australia by 80 EC units (Allan et al. 2001b). To achieve this, existing salt water interception schemes have pumped around 55,000 ML of salt water from the water table each year, thereby removing around 550,000 tonnes of salt (MDBC, 2003b). By 2003, the strategy had been largely successful with salinity levels in the Murray River at Morgan reduced by 200 EC on average (Figure 2) as a result of engineering intervention (MDBC, 2003b). To maintain this improvement into the future it has been estimated that a further 100 EC reduction is required and the MDBC has commissioned a number of other interception schemes.

Figure 2: The effect of salinity management in the Murray-Darling Basin – Average Salinity Levels in the River Murray at Morgan (South Australia) (MDBC, 2003b).

The surface area of evaporation ponds in the MDB has been estimated to be in excess of 6,250 ha (Allan et al. (2001a,b). Aquaculture may offer an opportunity to recover some productivity from these otherwise unproductive resources which could be used to offset the costs of managing the salinity problem at a farm and/or regional scale (Smith and Barlow, 1997).

Status of Inland saline aquaculture in Australia Australian researchers have been investigating the use of inland saline waters for aquaculture (ISA) for many years (see Smith and Barlow, 1987 for review). Although research has shown that the ISA concept is technically feasible there has been little commercial uptake so far (Gooley and Gavine, 2003). As a consequence, the development of inland saline aquaculture is still largely in the experimental phase in Australia, although a National R&D Strategy for commercialisation has recently been published (Allan et al. 2001a). In addition, FRDC have recently funded a project to implement that strategy and co-ordinate the commercialisation of ISA R&D in Australia (see the ISA Homepage at http://www.australian-aquacultureportal.com/saline/saline.html for a summary of this project’s activities).

State R&D Programs Essentially each state has adopted its own approach to ISA R&D depending on the resources that are available (Western Australia and Queensland do not have large-scale salt intervention schemes) and climatic conditions (which has a major bearing on the species that can be grown). The current R&D approaches of each state may be summarised as follows:

• Queensland - R&D trials have been run with black tiger prawns (Peneaus monodon) and banana prawns (P. merguiensis) in lined ponds in inland saline waters at Bauple in south-east Queensland. Initial results were promising, but subsequent trials have highlighted potential constraints to large- scale development. • South Australia - the NAP for Salinity and Water Quality recently funded a large R&D project at the Waikerie interception scheme. The facility will use up to 1 ML/day saline groundwater to trial various fish species, particularly mulloway (Argyrosomus japonicus) and snapper (Pagrus auratus), under polytunnels. • Western Australia - efforts in WA have concentrated on culture in saline surface waters (including dams) as there are no large scale interception schemes. To combat the constraints of poor water quality in these waters the Semi-Intensive Floating Tank System (SIFTS) was

developed (Sarre and Partridge, 2005). Trials have also been carried out with rainbow trout (Oncorhynchus mykiss), mulloway (Argyrosomus japonicus) and barramundi (Lates calcarifer). • New South Wales - the Inland Saline Aquaculture Research Centre at Wakool is the focus of R&D in New South Wales. Recent activities have focussed on the semi-commercial production of rainbow trout (O. mykiss) and evaluation of greenhouse technologies for black tiger prawn (P. monodon) and the kuruma prawn (Marsupenaeus japonicus). The suitability of saline groundwater for the production of mulloway (A. japonicus) and snapper (P. auratus) is also being determined. • Victoria - current R&D activities are focussed on this project and the culture of various fish species in recirculating aquaculture systems in low salinity groundwater.

Commercial developments Some progress has been made towards commercialisation in some states, namely:

• Western Australia - a small quantity of trout is being produced both in static farm dams and small recirculation systems (Trendall, 2004). Two groups of agricultural farmers are involved, the Salt Water Trout Alliance and the Western Inland Fisheries Cooperative. Further small scale ISA is being undertaken in the Gascoyne region where ornamental fish are being produced. • New South Wales - a plan for the commercial development of trout production at Wakool is currently being developed. There is one commercial operator producing mulloway. • South Australia - there is one commercial Artemia producer using inland saline waters.

Present study This report documents the outcomes of a project funded by a partnership that included the Rural Industries Research and Development Corporation (RIRDC), the Victorian Department of Primary Industries (DPI) and Pyramid Salt Pty. Ltd. The project “Aquaculture in saline groundwater evaporation basins” (Project reference MFR-3A) started in July 2003 and was completed in June 2006. The project was implemented by the Aquaculture Section, Marine and Freshwater Systems Platform, Primary Industries Research Victoria (PIRVic) and was linked to the project “Ecologically Sustainable Agriculture Through Aquaculture Integration” (July 2002-June 2005) funded by the Ecologically Sustainable Agriculture Initiative (ESAI) of the Victorian DPI. The ESAI project represented DPI co-investment in the project and this was continued in the 2005-2006 financial year through investment from Program 1 of Agriculture Development (Integrating Farming Systems into Landscapes). Co-investment in a specific component of this project was also sourced from the Innovation Sub-Project of Our Rural Landscapes of DPI. The overall aim of the project was to set up and operate an aquaculture production facility at a saline water evaporation basin in Victoria. The evaporation basin selected currently produces high quality salt. It was envisaged that the integration of aquaculture into an existing agri-business could improve productivity and potentially offset some of the costs associated with the management of salinity in Australia.

Objectives

This project aimed to set up and operate a pilot-scale ISA production facility at a saline evaporation basin currently producing high quality salt in north-west Victoria. It was intended that the facility also be used as a tool for demonstration and extension as well as the investigation of other species which may have commercial potential in the future.

The project evaluated the environmental and economic benefits of aquaculture integration into saline evaporation basins and developed techniques and business management systems that will allow the technology to be transferable to other evaporation basins in the area.

Specifically, the objectives of this project were as follows:

• to develop a commercially viable aquaculture system applicable to existing and planned saline evaporation basins throughout the Murray Darling Basin • to develop business planning guidelines applicable to aquaculture in inland saline waters.

Methodology

Research strategies and methods were closely linked to those of the Ecologically Sustainable Agriculture Initiative ESAI project and included the following tasks:

• the pilot-scale commercial demonstration site was developed using species recommended by a marketing study • trials were conducted to evaluate various “performance” aspects of inland saline aquaculture • options for agricultural use of the rehabilitated land were undertaken as a desk study • monitoring of economic and environmental parameters was conducted throughout the project using standard data collection techniques and • a commercialisation strategy and business planning guidelines were developed.

The demonstration site was planned to be a focal point for potential investors, a pilot for a future larger site and to be utilised in various practical ways for research and extension purposes.

Links with other projects and initiatives

This project was linked to the ESAI project “Ecologically Sustainable Agriculture through Aquaculture Integration” which co-invested in the project. The ESAI project aimed to develop, promote and coordinate commercial-scale practice of integrated agri-aquaculture systems (IAAS) within Victoria in order to enhance water re-use and recycling in agricultural systems. In 2005/2006, the project was linked to the “Our Water” sub-project of the Our Rural Landscapes (ORL) Initiative of DPI.

Inland Saline Aquaculture was included by the National Aquaculture Action Agenda as a key area that required assistance to develop industrial scale aquaculture businesses. The National Aquaculture Council (NAC) facilitated a workshop to identify constraints to industry development at Cronulla, NSW on Tuesday 20th January 2004. This workshop developed an action plan and this project has been represented on the Steering Committee in subsequent years.

Results

Development of a pilot scale inland saline aquaculture facility The following steps were taken to develop the pilot scale inland saline aquaculture facility at the northern Victorian site:

• an appropriate site was selected • a market survey was undertaken on potential aquaculture species • a literature review was conducted to identify optimal production scenarios • a business plan was developed • An aquaculture facility was established (upgrade of existing system) and the demonstration site commissioned • Solar Pond™ technology was integrated into aquaculture production and • ISA production trials were undertaken.

Site selection The demonstration site was located at Pyramid Salt Pty. Ltd., 5 km south of Pyramid Hill, on the Tragowel Plains near Kerang in northern Victoria. This site was selected as Pyramid Salt Pty. Ltd. was a partner in the project and there was already aquaculture infrastructure on site, although it had not been used for many years and had fallen into disrepair. Pyramid Salt Pty. Ltd. was founded by Gavin Privet, a chemical engineer, and John Ross, whose property at Pyramid Hill was badly degraded by salt. They joined forces in 1995 with the aim of developing technology to tackle the salinity problem and to find productive uses for the salty water.

Pyramid Salt extracts salt from 20 ha of saline evaporation ponds (Figure 3). One million litres of saline water per day is pumped from 10 m deep boreholes into a series of thirteen solar evaporation ponds. As the water progresses through the ponds it becomes more saline until the salt finally crystallises out. The salt is then harvested, purified, dried, sifted and bagged. The company currently produces 3,000 tonnes of salt per year, but will anticipates production of 10,000 tonnes when at full capacity.

Figure 3: Aerial view of Pyramid Salt Pty. Ltd. (Photo: courtesy of Gavin Privet).

Pyramid Salt produces salt of different purity levels which can be used in human food, pet food and manufacturing industries. It also produces an award-winning gourmet flake salt, which it supplies to restaurants and supermarkets in Melbourne, Brisbane, Adelaide, Perth and Sydney.

Market survey In a recent review of species with potential for commercial production in inland saline waters, Artemia spp.2 was identified as offering greatest potential to utilise existing salinity management infrastructure (Allan et al. 2001a). In addition, preliminary trials in South Australia (Hutchison, 1997) and Victoria (G. Privett, pers.comm.) have shown that Artemia can be successfully grown in inland saline waters. There was also anecdotal evidence that a large potential market for locally-produced Artemia existed for the feeding of native and ornamental fish larvae of different sizes and life-history stages.

In the present study, a market survey for the commercial production of Artemia was commissioned in July 2003 and completed in September 2003 (Edwards, 2003; Appendix I). Overall, the survey showed that there was sufficient demand in the local area alone to absorb the projected production of Artemia from the Pyramid Salt site. The main findings of this report were:

• demand for Artemia (both frozen and live) in the aquarium industry was greater than current supply • demand in Victoria for locally produced Artemia was expected to continue to grow as the aquarium and aquaculture industries expanded and quarantine regulations for imports become tougher • potential disease transfer and the low nutritional value of Artemia were concerns of the aquarium industry • nationally, the market for Artemia appeared to be large with Queensland prawn farmers being a potential market for 1 kg blocks of frozen Artemia.

Literature review A literature review was conducted to summarise current knowledge on the culture and mass production of Artemia (Appendix II). This review was used to develop a business plan, design the infrastructure upgrade and develop production techniques.

Development of a business plan The marketing survey confirmed that biomass production of Artemia was the business opportunity to be developed at the Pyramid Salt site. A business plan was written estimating the biomass of Artemia that could be produced over the first 5 years of operation at the site, based on a gradual increase in volume over time and increasing efficiency of production (Appendix III). Average yield was assumed to be 14 kg/5m3 tank initially and production was gradually increased by increasing the number of tanks used each week (Table 1).

Table 1: Production estimates for Artemia production at Pyramid Hill.

Production Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Tanks (5m3) harvested/week 0 2 3 4 4 5 Yield/tank (kg) 0 14 15 15 15 20 Adult Artemia (kg) 0 1,120 2,340 3,120 3,120 5,200

Potential markets for frozen Artemia were identified as 125 g “choc block” trays and 1 kg blocks. In addition, a niche market for supplying newly hatched live Artemia to native fish producers was also identified. Indicative prices for these market segments were used to determine projected revenues for the first 5 years of production (Table 2).

2 known as brine shrimp or Artemia in this report

Table 2: Expected returns from various market segments.

Year 1 Year 2 Year 3 Year 4 Year 5 Frozen 125 g trays ($/tray) 4.00 4.20 4.50 4.50 4.50 Frozen 1 kg blocks ($/kg) 20.00 20.00 25.00 25.00 25.00 Newly hatched Artemia ($/bag). 25.00 25.00 25.00 25.00 25.00

The cost-benefit analysis conducted with these assumptions indicated that the pilot aquaculture venture should be in a positive cash flow position by Year 2. Actual performance against these projections are examined later in this report.

The aquaculture facility A 250 m2 aquaculture shed was built by Pyramid Salt in July 1999 to trial the potential for mass production of Artemia using the saline groundwater brought to the surface for salt production. Although the trials were successful and all of the product could be sold, production was halted in July 2000 due to conflicting demands of the then expanding salt production business. The shed contained 10 concrete production tanks with a volume of 5 m3 each. The tanks were designed according to the specifications of Bossuyt and Sorgeloos (1980) and operated as an air-waterlift operated raceway (see Appendix II). System design also incorporated the modifications recommended by Dhert et al. (1992) to allow water exchange through the system so that production per tank could be increased.

At the commencement of the present study (July 2003) extensive upgrading and repair was required to restore the system to commercial production. Key tasks that were undertaken during this upgrade included:

• insulation of the shed using thermofoil panels • replacement of all plumbing, airlifts and airlines • replacement and upgrade of the electricity supply to the shed so that it complied with current standards and • replacement of blowers and pumps.

Images showing the facility before and after upgrading are shown in Appendix IV. A schematic diagram showing the configuration of tanks, plumbing and airlifts in the aquaculture production shed is shown in Figure 4. The demonstration site was commissioned in March 2004 by the Minister for Agriculture in Victoria, the Hon. Bob Cameron.

After commissioning, a series of trials were run at the site to determine optimal stocking, feeding and harvesting regimes. However, with the onset of winter it proved extremely difficult to maintain optimal water temperatures in the production tanks using electric immersion heaters alone. As a result, water exchanges in the tanks had to be restricted to conserve heat, which had a negative impact on production. The solution to this problem was to provide supplementary heat to the system by integrating Solar Pond™ technology.

Waste Water Sump

Bench 1 2 3 4 5

B ENTRANCE B 10 6 7 8 9

Bench

Sink

LEGEND

B Blower

F Freezer

Bore water line Airl line

Waste lines

Air manifolds

Figure 4: Configuration of tanks (1-10), plumbing and equipment in the aquaculture production shed and adjacent external wastewater sump.

Integration of Solar Pond™ technology A Solar Pond™ is a shallow body of saline water set up so that there is increasing salinity with depth (Chinn et al. 2003). The increasingly saline water (or halocline) forms discrete layers within the pond and mixing between these layers is restricted (Figure 5). Solar radiation enters the pond at the surface (the upper convective zone, UCZ) and is gradually transferred downwards through the non-convective zone (NCZ) into the lower layers or lower convective zone (LCZ). As mixing between the lower layers is restricted, solar radiation is trapped as heat in the lower layer and cannot escape as the salinity gradient prevents convention currents. The bottom layer of the pond can heat up to 80 oC; heat that is then available for use on a 24-hour basis. Pipes containing cold water are run through the bottom of the pond to remove the heat via heat exchange. This heated water was then directed to the aquaculture system for supplementary heating via a further heat exchange process within the Artemia tanks.

Figure 5: Schematic of a Solar Pond™ showing how salinity and temperature increase with depth (Andrews,2000). A 3,000 m2 Solar Pond™ was constructed at the Pyramid Salt site in 2002 in a joint venture between Royal Melbourne Institute of Technology (RMIT), Geo-Eng Australia Pty Ltd and Pyramid Salt Pty. Ltd., under a grant from the Renewable Energy Commercialisation Program of the Australian Greenhouse Project. The original purpose of the project was to supply heat energy for the salt drying process at Pyramid Salt. The project successfully demonstrated that the pond worked and produced heat for the dryers, however, after funding for the project ceased (in 2002) the pond fell into disrepair and was unused when the aquaculture project started. Co-investment was sought from the Innovation Key Project of Our Rural Landscapes Initiative of DPI to re-commission the Solar Pond™ and plumb the heat exchanger to the aquaculture shed. The use of heat energy in the ISA venture at the Pyramid Salt site was one of the first commercial applications of Solar Pond™ technology in Australia (Prof. Ali Akbar Akbarzadeh, pers. comm.).

Images of the infrastructure involved in connecting the Solar Pond™ to the aquaculture shed are shown in Appendix IV.

Heat requirements for aquaculture production The Solar Pond™ has the potential to produce 60 kW of energy, on average (Andrews, 2000). The quantity of energy (Q) required to heat the water in the aquaculture shed from 17-25 oC in one tank can be calculated using the following equation:

Q = V x Cp x (Δ T) = 168,000 kJ/day = 0.17 GJ/day = 47.3 kWH Where: V volume of water (5,000 litres) Cp the specific heat of water (4.2 kJ/kg oC) Δ T the required change in water temperature (8 oC).

The influence of the Solar Pond™ on water temperatures in production tanks compared with ambient tank water and bore water is shown in Figure 6. The figure shows that during the summer months, unheated water in the tanks in the hatchery absorbs heat so less heating is required. The Solar Pond™ kept water temperatures at between 4.7 and 6.5 oC above the unheated water temperature, which was ideal for the production of Artemia. In summer, the Solar Pond™ water exchangers were switched off when tank water temperatures exceeded 30 oC. During the project it was estimated that the heat extracted from the Solar Pond™ from the aquaculture tanks was around 42 kW (Prof. Ali Akbar Akbarzadeh, pers. comm.).

35 Bore Solar Heated Unheated tank 30

15 Temperature (oC)

0 Oct Nov Dec Jan Feb March April May

Figure 6: Influence of the Solar Pond™ on water temperatures in Artemia production tanks.

The final layout of infrastructure at the ISA demonstration site including the Solar Pond™ is shown in Figure 7.

Solar Pond

Evap Waste water sump Pond

Salt Production Facility Hatchery

Evap Pond Waste Water Bore Water Recirc Warm Water Recirc Cold Water Solar Recirc Pump

Solar Storage Tank

Figure 7: Final layout of ISA demonstration site at Pyramid Salt.

Aquaculture production trials There were two components to aquaculture production trials undertaken at the ISA demonstration site:

• biomass production trials of Artemia and • trials with other species.

Artemia production A process manual for the production of Artemia biomass based on the trials undertaken in the present study has been produced for extension purposes and the key components are summarised below.

Decapsulation and hatching of cysts The cysts used in the production of Artemia at the Pyramid Hill facility were sourced from the Biomarine Aquafauna Inc. based in the USA and were imported into Victoria by a licensed broker after an Australian Quarantine and Inspection Service (AQIS) approved quarantine period. Prior to hatching, the cysts were decapsulated, which is a process whereby the outer protective shell of the cyst is removed. Decapsulation improves the hatching success of the Artemia cysts (Van Stappen, 1996). The process takes place in custom-designed bags suspended from a steel frame according to a method adopted by the DPI Snobs Creek Centre in north-east Victoria.

The hatching process itself was undertaken in a hatching tank heated to 26 oC. Aeration was provided through airstones and a halogen lamp was suspended over the top of the tank to provide illumination. When conditions in the hatching tank were stable, the decapsulated cysts could be added. As a rule of thumb, 106 g of decapsulated cysts would inoculate a 5 m3 production tank at a post-hatch density of 5,000 individuals/l. The cysts were hydrated in the hatching tank and the embryos hatched around 20 hours later. Hatching success was increased when the following parameters were optimal (Sorgeloos, 1980):

• Temperature - optimal hatching temperature is around 30 oC and ideally should be close to the temperature in the growout tanks • Salinity - normally close to seawater, but lower salinities (25-30 ppt) can increase hatching success • pH - should be above 8.0 and can be artificially increased and buffered by the addition of sodium bicarbonate • Oxygen - aeration is important to maintain oxygen levels and keep the cysts in suspension • Cyst density - should not exceed 10g/l • Illumination - continuous illumination of about 1,000 lux is required for optimal hatching efficiency and hatching rates.

Growout production The newly hatched Artemia were transferred to the growout tank. The temperature difference between the hatching and growout tanks was maintained at a range no greater than 1.5 oC. The newly-hatched shrimp feed on their yolk sac for the first 2-3 days after which supplementary feeding was required. Two feed types were used in the growout trials of the Artemia – rice bran and wheat. Both products were mechanically micronised as the optimal size of feed for Artemia is between 30-50 μm. In the present study, micronisation of the rice bran was less successful than that of the wheat due to the higher oil content of the rice bran which clogged up the grinder. As a result, the rice bran had to be manually filtered prior to use which resulted in 40% of the product being wasted. Due to the time involved in preparing the rice bran diet, wheat was used from April 2006 onwards. The Artemia were fed 2-3 times per day according to light penetration as indicated by a secchi disk depth, which was maintained at between 15-20 cm. Water exchanges were carried out as required after day 5 of production.

Harvesting The Artemia were harvested at a length of 8-10 mm after a culture period of 14-15 days. The Artemia were netted from the growout tanks and rinsed cold tap water to lower their body temperature and improve their colour. The Artemia were then weighed into plastic trays and placed in the freezer.

Yields Over the duration of the project a total biomass of 696 kg of Artemia was harvested at the demonstration site. The first year of production was used to develop and refine production methods. Production did not increase as quickly as estimated in the business plan, primarily due to high staff turnover limiting technical capability. Frequent recruitment and re-training of production staff at the isolated meant that momentum was lost in the development of production at the site. Table 3 shows the yields from production tanks from May 2005-June 2006. Higher yields were obtained from the rice bran compared to the wheat, as the wheat was only introduced to the production system in April 2006 appropriate feeding regimes for this feed were still being refined. The average yield from rice bran production was 12.3 kg, which is equivalent to around 2.5 kg/m3. This is similar to the yield of 2 kg/m3 on a diet of rice bran, projected by Dobbeleir et al. (1980). Figures 8 and 9 show cumulative production and sales, respectively, from the site from September 2004 to June 2006.

Table 3: Yields from production trials at ISA demonstration site.

Rice Bran Wheat 1/5/2005‐1/6/2006 1/4/2006‐30/6/2006 Average yield (kg/ 5m3 tank) 12.3 5.3 Number of trials (n) 36 15 Range (kg/tank) 6.2‐20 1.5‐8.0 Length of culture period 14 days 15 days

800

700

600

500

400

300 Cumulative Production (Kg) Production Cumulative

200

100

0 Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- 04 04 04 04 05 05 05 05 05 05 05 05 05 05 05 05 06 06 06 06 06 06

Figure 8: Cumulative Artemia biomass production at the site 2004-2006.

$18,000.00

$16,000.00

$14,000.00

$12,000.00

$10,000.00

$8,000.00

$6,000.00

$4,000.00

$2,000.00

$0.00 Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- 04 04 04 04 05 05 05 05 05 05 05 05 05 05 05 05 06 06 06 06 06 06

Figure 9: Cumulative sales of Artemia from the ISA demonstration site.

Other species As has been found at other salt interception schemes in the MDB, the groundwater at Pyramid Salt Pty. Ltd. was deficient in potassium compared with seawater (Table 4). Fielder et al. (2001) found that saline groundwater at Wakool SIS had to be fortified with potassium chloride to achieve a ratio of K+/Cl- of between 0.007-0.018 before marine fish (stenohaline) would survive and grow. Fortification is required for most marine fish and prawns, but not for Artemia.

Table 4: Water chemistry of coastal seawater compared with groundwater at Wakool SIS and Pyramid Salt (adapted from Fielder et al. 2001)

Coastal seawater Wakool Groundwater Pyramid Salt Groundwater Mg/l Ion/Cl‐ Mg/l Ion/Cl‐ Mg/l Ion/Cl‐ ratio ratio ratio Chloride 20,000 1.00 11,000 1.00 21,000 1.00 Sodium 9,470 0.474 4,210 0.383 6,400 0.35 Sulphate 2,500 0.125 1,100 0.1 5,900 0.28 Magnesium 1,000 0.05 820 0.075 1,400 0.07 Potassium 365 0.018 9.2 0.001 90 0.004 Calcium 364 0.018 504 0.046 590 0.03

Fish species that have been investigated and reported in Australian ISA research trials in the past include:

• silver perch (Bidyanus bidyanus), rainbow trout (Oncorhynchus mykiss) and Atlantic salmon (Salmo salar) in low salinity groundwater (6-12ppt) in temperate Victoria (Ingram et al. 2002) • snapper (Pagrus auratus) (Fielder et al. 2001), silver perch (Bidyanus bidyanus) and mulloway (Argyrosomus japonicus) (Doroudi et al. 2006; Doroudi et al. In press) in New South Wales • barramundi (Lates calcarifer), mulloway (Argyrosomus japonicus) and snapper (Pagrus auratus) in Western Australia (Partridge, 2002). Black bream (Acanthopagrus butcheri) showed good survival in some trials but growth rates appeared to be too slow to make commercial aquaculture viable (Sarre et al. 2003).

In terms of crustaceans, penaeid prawns have shown most potential in the coastal areas of northern New South Wales and Queensland (Collins, 2004).

In the present study, it was difficult to source seedstock of marine finfish for R&D trials as there are few marine hatcheries in Victoria, but a number of small-scale trials were conducted to investigate the potential for various species, including:

• Black bream (Acanthopagrus butcheri) - an initial trial stocking 200 juvenile black bream in a tank at Pyramid Salt in July 2004 was unsuccessful as the water was not fortified with potassium chloride. Additional fish were secured in October 2004 and 400 individual were stocked into the tanks with fortified water at an average weight of 1.0g. The fish were fed on Artemia and grew to an average weight of 15.8g by April 2005 (Figure 10). Survival over this period was 48%.

18 16 14 12 10 8

Weight (g) 6 4 2 0 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05

Weight (g)

Figure 10: Growth of black bream in tanks at Pyramid Hill

• Snapper (Pargus auratus) and mullet (Mugil cephalus) -small numbers of snapper and mullet were stocked in the system fortified with potassium chloride on 9th February 2005. Survival of both species was very poor with >95% mortality within two weeks • Prawns - 75 Eastern King Prawn (Peneaus plebejus) and 35 school prawns (Metapeneaus macleayi) were introduced into the system in March 2005. All of the stocked prawns died within days, most probably due to the high ambient temperatures.

On the basis of these trials it was concluded that production of marine fish and crustaceans was incompatible with the indoor, tank-based technology developed for commercial Artemia biomass production.

Viability of Artemia biomass production in saline groundwater

The pilot ISA demonstration site at Pyramid Salt provided invaluable data through which projections of the revenues and costs associated with the commercial production of Artemia biomass could be made. Key factors in determining the viability of production at the site included identifying markets for the product at an acceptable market price and controlling production costs.

Markets and revenues The market assessment study conducted at the start of the project indicated that there was a ready market for high quality, locally grown Artemia in the Victorian aquarium and aquaculture industry. Three market niches were identified: frozen 125 g blocks; small Artemia for the native fish aquaculture industry; and live Artemia for the aquarium industry.

Frozen 125 g blocks The present study focussed on developing markets for frozen 125 g blocks of Artemia. Initial market testing suggested that the local market recognised the superior quality of the ISA-produced Artemia and was willing to pay a premium price compared with cheaper imported products. Markets were subsequently established with distributors, wholesalers and retailers (pet shops) in the aquarium industry. The market price attained for the product varied depending on the volume supplied and regularity of orders. The price varied between $1.65 and $3.00 per block for standard-grade product, with an overall average price of $2.20 per block. Although this appears to be far less than the projected $4.00 per block forecast in the business plan, the market specifically requested that the standard-grade blocks be processed to contain a proportion of water to make it easier to break up and use in aquariums. The net value of the Artemia in the processed product was therefore very similar to that projected in the business plan.

Three day old nauplii A niche market exists to supply the native fish aquaculture industry with 3-day old live Artemia nauplii for first-feeding native fish larvae. This market is seasonal (December to March), fairly small and the market price was $16-20/kg wet weight on nauplii.

Live adults During interactions with the aquarium industry it became clear that a significant market existed for live Artemia sold to the industry in 1 kg wet weight lots, which are then on-sold to fish owners in 100 g serves. This potential market was not developed in the present study due to sensitivities about competing in the same market as another Victorian Artemia producer. However it is understood that the market price for live adult Artemia is around $90/kg farm gate.

Production costs Labour During pilot scale production, labour was by far the largest production cost. However, it is recognised that as the number of tanks in production increased, the unit cost of the labour component would decrease. Cost estimates are provided in Table 5.

Feeds Both feeds used in the trial were purchased in raw form and micronised prior to use in the trials. Rice bran cost more at $0.57/kg, compared with wheat which was $0.35/kg. Micronising costs were around $1.50/kg. Since around 40 % of the rice bran is lost during the filtration process the total cost is $3.75/kg for rice-bran feeds is given in Table 5.

Energy Energy consumption at the site was estimated based on the constant running of 2 x 1.5 kWh blowers and the 2.2 kWh header pump from the Solar Pond™. Consumption also included lights and freezers in the production shed. The commercial power charge at the site was 8.20 cents/kWh. Overall the cost of electricity was assessed to be $15/day (or $105/week). Cost estimates are provided in Table 5.

Cost-benefit analysis The cost-benefit analysis shown in Table 5 uses the revenues and costs detailed above and projects the profit that could be generated as the number of tanks in production per week increases. The analysis suggests that at full production, annual turnover would be around $112, 680 with an operating profit of around $52,520 per year.

Table 5: Cost benefit analysis for commercial production of Artemia biomass, including actual performance (May 2005-May 2006) compared with projected performance.

Actual performance Projected Performance Production Revenue 1 tank/week 3 tanks/week 5 tanks/week Average yield (kg) of Artemia per 12.3kg3 36.9kg 61.5kg 5,000 litre tank (fed on micronised (6.2‐20 kg range) rice bran) Packets of 125g Artemia/tank 197 591 985 Average price / packet $2.20 $2.00 $2.00 Average revenue ($)/ week $433 $1,300 $2,167 Costs Labour 1 person @ $20/hr $140 $420 $700 (1hr/day/tank in production) Feed @ $3.75/kg and FCR 1:1 $51 $152 $254 Packaging ($0.1/packet) $20 $59 $98 Electricity @ $15/day $105 $105 $105 Total costs $316 $736 $1,157 Gross Profit ($/week) $117 $564 $1,010

3 = 25kg processed Artemia 19

Links with other agri-business Many salt interception schemes in the MDB are used solely to evaporate the pumped water and not for salt production. A recent study by CSIRO investigated the economic viability of producing salt minerals from the saline waters of River Murray disposal basins (Hamilton et al. 2004). The study was based on two distinct types of production processes:

• halite (sodium chloride) production at an estimated sale price of $30/tonne and • refined Epsom salt production (magnesium sulphate) at an estimated sale price of $570/tonne.

The study estimated that in an integrated halite/Epsom salt production system 37,170 tonnes of halite and 3,192 tonnes of Epsom salt could be produced. In addition, magnesium rich bitterns (estimated volume 52,432 tonnes) could be produced as a by-product and sold for between $8.25 and $16.50/ tonne. The analysis concluded that salt production could be economically viable, but the market for bitterns is crucial to viability. The study noted that the current local market for bitterns could easily become saturated which would depress the price and impact viability (Hamilton et al. 2004). The seasonality of salt production was also a concern in terms of profitability.

The environmental benefits of producing salt from saline groundwaters have recently been documented. Over the eight years that Pyramid Salt has been in operation, the water table in the surrounding area has fallen from 0.5 m to 6 m and previously degraded land has been restored to productive use (G. Privett, pers. comm.). Surrounding farms have shown increased productivity from clover pastures, cereal crops and vegetables. From the monitoring data, Pyramid Salt estimate that 20 ha of evaporation ponds will benefit around 1,000 ha of salinised land.

The current land use around the Pyramid-Boort irrigation area is primarily wool and fat lambs produced on annual pastures. A recent report has investigated the value of wool production on farm and found that in Victoria the state-wide average farm income from wool is $247 with a gross margin of $115/ha (DPI, 2006). Table 6 shows the relative value of other production systems which may be feasible on the rehabilitated land.

Table 6: Potential returns from various forms of agriculture in Victoria and New South Wales.

Yield /ha Farm gate Income Gross Comments price ($/x) ($/ ha) Margin ($/ha) Capsicum 3000 cartons 7.00/carton 21,000 2,799 NSW Agriculture Farm Enterprise Budget Pumpkin 1,200 cartons 7.50/carton 9,000 1,760 NSW Agriculture Farm Enterprise Budget Tomatoes processing 85 tonnes 100/tonne 8,500 3,879 NSW Agriculture Farm (drip irrigation) Enterprise Budget Lucerne 8 tonnes 223/tonne 1,790 721 NSW Agriculture Farm Enterprise Budget Grapes (wine) 22 tonnes 500/tonne 11,000 5,246 Monticello and Reeves (2005) Grapes (table) 1,680 boxes 12.5/box 21,000 3,934 Monticello and Reeves (2005) Apples (packed) 2,885 cartons 23.75/carton 68,519 13,980 Monticello and Reeves (2005) Plums 1,800 cartons 19/carton 34,200 11,132 Monticello and Reeves (2005) Rock melons 2,000 boxes 15/box 30,000 473 Monticello and Reeves (2005)

Demonstration and Extension The demonstration and extension activities of the present study were linked to those of the ESAI project. A communication strategy was developed at the beginning of the project and implemented over the three years that the project ran. A summary of key communication, demonstration and extension activities are given below.

Project communication

• project brief – disseminated to all stakeholders • technote “Prospects for aquaculture in inland saline waters” • poster at DPI Young Professionals Forum 2005 “Inland salinity – Aquaculture lends a hand” • presentation at World Aquaculture Society Meeting in Bali “Key drivers for the future development of inland aquaculture in Australia”. May 2005.

Media

• “Sun halts the salt” Weekly Times 25 February 2004 • “Salt seller’s new brine wave”. Herald Sun 24 March 2004 • “Shrimp worth salt” Bendigo Advertiser 12 March 2004 • Project featured on WIN TV news 11/3/2004 • “Environmental liability becomes tasty asset” Loddon Times 17 March 2004 • “Regional diversity – salt water shrimp” Premium Pickings Newsletter, Swan Hill.

Farm Walks/ Site visits A series of farm walks were held on site so that interested individuals or groups could learn about the project’s activities. In total over 140 people visited the sites; key groups including:

• farmers interested in aquaculture opportunties • National Aquaculture Council Inland Saline Aquaculture Project Steering Committee • Dr Atul Kumar Jain, Mumbai University, India • extension officers from DPI offices in Kerang, Swan Hill and Echuca • DPI Aquaculture Development Officers

Business planning guidelines

This report has documented the staged approach to business development that was adopted in the present study. However, it was not necessary to undertake a rigorous site selection process in this project as the infrastructure was already built at the site of our industry partner. Appropriate site selection will be a key factor determining the success or otherwise of new entrants and a recent report identified the issues that should be systematically considered when planning to invest in an inland saline aquaculture venture of the type investigated in the present study. Young (2004) identified the key risks associated with a prospective ISA venture as:

• water supply - including water quality, volume of water available and continuity of supply • location - including remoteness, climatic conditions and temperature profile • policy - planning and approvals requirements • production systems and species - including technical complexity of the production system, marketing and sales of target species and commercially unproven production systems and

In addition, the present study has shown that the recruitment and retention of qualified and motivated staff in remote areas is a critical component in the success of any ISA venture.

Site selection for Artemia biomass production Commercial production of Artemia in pond or tank systems requires the availability of water of suitable salinity. Allen et al. (2001b) listed all of the large evaporation basins in the MDB together with their key characteristics. Optimal salinity for Artemia growout to adult is from 32-65 ppt (Dhont and Lavens, 1996), however good results were obtained during this study with salinities as low as 25 ppt. If 25 ppt is used as a minimum requirement for biomass production of Artemia, then the number of evaporation basins that are appropriate for this form of development narrows to those shown in Table 7.

Table 7: Exisitng or planned SIS with suitable salinity for the culture of Artemia (adapted from Allan et al. 2001b).

Surface Pumped Salinity Capital Operational Area (ha) Volume (ppt) costs costs ($m/yr) (ML/yr) ($m) Existing schemes Rufus River GIS NSW nr Wentworth Na 1,400 30.0 3.2 0.2 Mildura‐Merbein GIS Victoria, Sunraysia 219 (LR) 3,500 (LR) 35.0 (LR) 0.86* 0.18 690 (WB) 6,000 (WB) 60.0 (WB) Buronga Salt IS NSW, Sunraysia >320 2,200 34.0 3‐4 0.16 Mallee Cliffs Salt IS NSW, Sunraysia 110 2,000 36.0 12.2 0.47 Pyramid Hill Vic, Kerang 15 37‐55 30 12.0 0.25 New or planned schemes Qualco‐sunlands SIS Waikerie, SA ‐ 3,200 25 7.2 0.26 Lindsay River SIS Mildura, Vic ‐ 36 4 0.25 Pyramid Creek Kerang, Vic 2,200 30 10 0.15 Chowilla Renmark, SA 24‐36 9.8 0.5 Where: GIS – Groundwater Interception Scheme, LR – Lake Ranfurly, WB ‐ Wargan Basins

Temperature is another important site selection factor. The optimal temperature for the growout of Artemia varies with the species being cultured (Dhont and Lavens, 1996) but is usually between 22.5- 30 oC. Figure 11 shows average ambient surface water temperatures in the lower Murray area over a year indicating that, unless the groundwater carries geothermal heat, heating of the water will be required in 8 out of 12 months of the year.

30.0

25.0

20.0

15.0

10.0 Temperature (oC) 5.0

0.0 JFMAMJJASOND

Surface water temperature

Figure 11: Average surface water temperatures in the Lower Murray. Data from Loddon River @ Kerang and Murray River @ Redcliffs (www.vicwaterdata.net) Other water quality variables that should be considered include pH (which should be in the range of 6.5 to 8) and dissolved oxygen which should be maintained above 5mg/l. As previously discussed the ionic balance of inland saline water does not appear to affect Artemia production.

Selection of production technologies There are two main methods of producing Artemia biomass: in outdoor ponds or indoor tank systems. Given the climatic constraints of southern Australia, the most practical technology for producing a consistent supply of Artemia biomass on a commercial scale is an indoor, intensive tank system – as trialed in the present study. Dhont and Lavens, (1996) identified the advantages of this method of production over pond production as including:

• year-round production, independent of climate or season • specific stages can be harvested depending on market demand • opportunity for quality control and • indoor tank systems can operate at very high densities of Artemia; several thousand animals per litre compared with a few hundred in pond systems

Intensive tank systems can be run with various levels of water exchange from “open flow-through” with 0 % recirculation, to “closed” system with 100 % recirculation. In reality there are a number of transition types in between those two extremes that can be utilised. The water exchange regime adopted should be adequate to maintain optimal water quality conditions in the tanks, i.e. enough to stop particulate and dissolved wastes accumulating. However the conservation of heat within the system may be a limiting factor on the volume and frequency of water exchange. In a closed system, mechanical and biological filtration can be used to remove wastes whilst conserving heat within the system.

Government approvals and licensing Importing Artemia cysts Artemia cysts can only be imported into Australia with a licence from the Australian Quarantine and Inspection Service (AQIS). The investor can either arrange to import directly from an overseas supplier or purchase from an Australian distributor of the product.

Aquaculture license An aquaculture license will be required from the state fisheries agency before product can be produced on a commercial basis.

Planning permission Depending on land ownership and the infrastructure already on-site, planning permission may be required from the local council to construct new buildings on site. In addition, permission may also be required to change the use of the facility to aquaculture.

Other government approvals Approvals to discharge effluent are applicable to most inland aquaculture farms. However, inland saline aquaculture ventures integrated with existing SIS may not require this as any saline wastewater will be retained on-site and returned to the salt production basins. The investor should confirm that discharge approvals are not required with the state Environmental Protection Authority and/or local Catchment Management Authority or Water Authority before proceeding.

Developing supply chains and markets Delivering high quality product to markets consistently will be the key to the success of an inland saline aquaculture venture producing Artemia biomass. In addition to identifying customers and producing product to meet their requirements, this will require the development of a supply chain between producer and customer. In the case of Artemia biomass, logistical relationships with refrigerated transporters, cold storage facilities, wholesalers and distributors will need to be developed to ensure that the product reaches the intended market in quality assured condition.

Implications and Recommendations

The rationale behind integrating aquaculture into salt interception schemes is that it is potentially a means of offsetting some of the operational costs of managing these schemes. Aquaculture has the unique potential to utilise the existing resources (water, land, energy) of salt interception schemes to produce other value-added products. The results of this project demonstrate that the production of Artemia biomass at salt interception schemes can be economically viable, with the appropriate selection of production technology to maximise yield and minimise costs. The prevailing climatic conditions will determine the extent to which water heating is required over the year and this will have a major bearing on the design and operation of the facility, particularly if there is no ready access to Solar Pond™ technologies.

The aquaculture venture developed under this project represents only one aspect of ISA that is applicable to saline groundwater interception schemes. This technology and the production techniques associated with it are transferable to other evaporation basins in the MDB. It is considered unlikely that Artemia biomass production in evaporation ponds would be commercially viable, due to the highly seasonal nature of production. However stocking Artemia for cyst production and collection may become viable in large evaporation basins such as the new development at Pyramid Creek. In the present study, the integration of other species into tank systems designed for Artemia was generally unsuccessful, but there is potential to develop these species in the outdoor ponds provided that culture does not impact on the quality of water available for salt production.

It was intended that the inland saline aquaculture demonstration site developed under this project would be run as a commercial enterprise after the project was finished. This would have provided an opportunity for further data to be collected about the economic viability of the venture. The commercialisation of the project does not now look likely to occur for a variety of reasons. However, if commercialisation does occur in the future, it is recommended that the new operators investigate the following options to increase the economic sustainability of the operation:

• Markets for Artemia - there is a large, unsatisfied market for live Artemia in Melbourne and other capital cities that was not explored during this project. This appears to be a lucrative and easily accessible market if an appropriate supply chain could be developed • Improving yields from production tanks - although good yields were obtained during the project, these could be improved through the refinement of feeding and water exchange regimes • Investigating other opportunities - the production of cysts from large areas of production ponds could be another means of utilising the infrastructure and resources at SIS and provide another income stream for the development.

References

AFFA (2000). A national action plan for salinity and water quality. Agriculture, Fisheries and Forestry Australia, Canberra, 2000. ANRA (2001). Australian natural resource atlas. http://ea.gov.au/ANRA. Allan, G. L., Dignam, A. and Fielder, S. (2001a). Developing commercial inland saline aquaculture in Australia: Part 1. R&D Plan. FRDC Project No. 98/335, June 2001. NSW Fisheries Final Report Series, No. 31. Allan, G. L., Banens, B. and Fielder, S. (2001b). Developing commercial inland saline aquaculture in Australia: Part 2. Resource Inventory and Assessment. FRDC Project No. 98/335, June 2001. NSW Fisheries Final Report Series, No. 31. Andrews, J. (2000). Solar Pond project. Project Information Sheet for “Innovative technology to collect solar energy for heating purposes and reduce greenhouse gas emissions”. RMIT University, Melbourne. Bossuyt, E. and Sorgeloos, P. (1980). Technological aspects of the batch culturing of Artemia in high densities. In: Personne, G., Sorgeloos, P., Roels, O. and Jaspers, E. 1980 (eds). The Brine Shrimp Artemia. Volume 3. Proceedings of the International Symposium on the brine shrimp Artemia salina. Corpus Christi, Texas, USA, August 20-23, 1979. Universa Press, Wetteren, Belgium. Chinn, A., Akbarzadeh, A. and Dixon, C. (2003). The Design, Construction, Operation & Maintenance of an Experimental Magnesium Chloride Solar Pond. Royal Melbourne Institute of Technology. Collins, A. L. and Russell, B. J. (2004). Sustainable Inland Prawn Farming in Queensland. The demonstration of zero discharge semi-intensive production of marine prawns using low salinity groundwater. (In Prep) Dhert, P., Bombeo, R. B., Lavens, P. and Sorgeloos, P. (1992). A simple, semi flow-through culture technique for the controlled super-intensive production of Artemia juveniles and adults. Aquacultural Engineering, 11, 107-119. Dhont, J. and Lavens, P. (1996). Tank production and use of ongrown Artemia. In: Lavens, P. and Sorgeloos, P. (1996) eds. Manual on the production and use of live feeds for aquaculture. FAO Fisheries Technical Paper 361. Food and Agriculture Organisation of the United Nations, Rome, 1996. Dobbeleir, J., Adam, N., Bossuyt, E., Bruggeman, E. and Sorgeloos, P. (1980). New aspects of the use of inert diets for high density culturing of brine shrimp. In: Personne, G., Sorgeloos, P., Roels, O. and Jaspers, E. 1980 (eds). The Brine Shrimp Artemia. Volume 3. Proceedings of the International Symposium on the brine shrimp Artemia salina. Corpus Christi, Texas, USA, August 20-23, 1979. Universa Press, Wetteren, Belgium. Doroudi. M.S., Fielder, D. S., Allan, G. L. and Webster, G. K. (2006). Combined effects of salinity and potassium concentration on juvenile mulloway (Argyrosomus japonicus, Temminck and Schlegel) in inland saline groundwater. Aquaculture Research, 2006, 37, 1034-1039. Doroudi. M.S., Fielder, D. S., Allan, G. L. and Webster, G. K. (In press). Survival and growth of silver perch (Bidyanus bidyanus), a salt-tolerant freshwater species in inland saline groundwater from south-western New South Wales, Australia. Short communication submitted to the Journal of the World Aquaculture Society. DPI (2006). Wool industry farm monitor project, summary of results 2005-2006. Department of Primary Industries, Victoria.

Edwards, M. (2003). The use and demand for Artemia sp. in the aquarium and aquaculture industry. Inland saline aquaculture initial marketing study – final report. Unpublished report to the Department of Primary Industries, 5th September 2003. Fielder, D. S., Bardsley, W. J. and Allan, G. L. (2001). Survival and growth of Australian snapper, Pagrus auratus, in saline groundwater from inland New South Wales, Australia. Aquaculture, 201 (2001), 73-90. Gooley, G. J. and Gavine, F. M. (2003). Integrated Agri-Aquaculture Systems: A resource handbook for Australian industry development. RIRDC Publication No. 03/012. Hamilton, A. C., Morison, J. B. and Connor, J. D. (2004). Value adding to salts recovered from saline waters in disposal basins in the Murray Darling basin. MDBC Publication No. 80/04. Hutchison, W. (1997). Inland saline aquaculture in South Australia. . In: B. Smith and C. Barlow (Eds). Inland saline aquaculture. Proceedings of a workshop held in Perth, Western Australia, 6-7 August, 1997. ACIAR Proceedings No. 83, 61 pp. Ingram, B. A., Mc Kinnon, L. J. and Gooley, G. J. (2002). Growth and survival of selected aquatic animals in two saline groundwater evaporation basins: an Australian case study. Aquaculture Research, 33, 425-436. Lavens, P. and Sorgeloos, P. (1996). Manual on the production and use of live feeds for aquaculture. FAO Fisheries Technical Paper 361. Food and Agriculture Organisation of the United Nations, Rome, 1996. Lavens, P. and Sorgeloos, P. (2000). The history, present status and prospects of the availability of Artemia cysts for aquaculture. Aquaculture, 181, 397-403. MDBC (1999). The Salinity Audit of the Murray-Darling Basin – A 100 year perspective. Murray Darling Basin Commission, 1999. MDBC (2003a). Keeping salt out of the Murray. MDBC Factsheet. Murray Darling Basin Commission, 2003. MDBC (2003b). Salinity levels in the River Murray. Murray-Darling Basin Commission – Salinity Update 2003. www.mdbc.gov.au. Montecillo, O. and Reeves, C. (2005). Loddon Murray Region Horticulture: Gross margins 2005- 2006. Catchment and Agriculture Services, Department of Primary Industries, Echuca, Victoria, 2005. Partridge, G. J. (2002). Evaluating the suitability of saline groundwater from Lake Toolibin , Western Australia for culturing barramundi (Lates calcarifer), mulloway (Argyrosomus japonicus) and snapper (Pagrus auratus). Aquaculture Development Unit Challenger TAFE Personne, G. and Sorgeloos, P. (1980). General aspects of the ecology and biogeography of Artemia. In: Personne, P. et al. (1980). The Brine Shrimp Artemia. Volume 3. Proceedings of the International Symposium on the brine shrimp Artemia salina. Corpus Christi, Texas, USA, August 20-23, 1979. Universa Press, Wetteren, Belgium. Personne, G., Sorgeloos, P., Roels, O. and Jaspers, E. (1980) (eds). The Brine Shrimp Artemia. Volume 3. Proceedings of the International Symposium on the brine shrimp Artemia salina. Corpus Christi, Texas, USA, August 20-23, 1979. Universa Press, Wetteren, Belgium. Sarre, G., Partridge, G. J., Jenkins, G. I., Potter, I. C. and Tiivel, D. J. (2003). Factors required for the successful aquaculture of black bream (Acanthopargus butcheri) in inland water bodies. Fisheries Research and Development Corporation Report, FRDC Project No. 1999/320, April 2003. Sarre, G. and Partridge, G. J. (2005). Inland saline aquaculture: a new marine industry for the WA Wheatbelt. Challenger TAFE (Aquaculture Development Unit) Springfield Waters Aquaculture Northam.

Smith, B. and Barlow, C. (1997) (eds). Inland saline aquaculture. Proceedings of a workshop held on 6-7 August, 1997 in Perth, Western Australia. ACIAR Proceedings No. 83, 61pp. Sorgeloos, P. (1980). The use of the brine shrimp Artemia in aquaculture. In: Personne, G., Sorgeloos, P., Roels, O. and Jaspers, E. 1980 (eds). The Brine Shrimp Artemia. Volume 3. Proceedings of the International Symposium on the brine shrimp Artemia salina. Corpus Christi, Texas, USA, August 20-23, 1979. Universa Press, Wetteren, Belgium. Tackaert, W. and Sorgeloos, P. (1993). The use of brine shrimp Artemia in biological management of solar saltworks. Seventh Symposium on Salt, Vol 1. 617-622. Elsevier Science Publishers B. V., Amsterdam. Trendall, J. (2004). Saltwater trout – a case study in supply chain development. Report prepared for the National Aquaculture Council. Van Stappen, G. (1996). Artemia. In: Lavens, P. and Sorgeloos, P. (1996) eds. Manual on the production and use of live feeds for aquaculture. FAO Fisheries Technical Paper 361. Food and Agriculture Organisation of the United Nations, Rome, 1996. Young, C. (2004). Inland Saline Aquaculture Investment Risk Analysis Framework for evaluating investment in ISA production systems and species. Seafood Farming Services – Aquaculture consultants.

Appendices Appendix I: Initial Marketing Study

Inland Saline Aquaculture Initial Marketing Study

Final Report

The use of and demand for Artemia spp. in the aquarium and aquaculture industry

5th September, 2003

Morgan Edwards

Background The demand for Artemia in aquaculture has created a massive industry with most commercially produced crustacean and fish species being fed Artemia in some form (frozen, live or dried) at some stage in their production. The increasing popularity of home aquaria, particularly marine systems, has led to the aquarium industry (although relatively small in comparison to aquaculture) becoming a significant user of Artemia as a food source. Artemia in the aquaculture industry is commonly bought in a dried cyst form, which is hatched in-house and fed on demand. The majority of cysts are produced overseas, principally in the United States and China. In the aquarium trade Artemia is more commonly sold as a frozen product. A smaller proportion is sold live for more specialized aquarium setups such as seahorse culture. Once again the majority of the frozen Artemia is produced overseas with a small local "cottage" industry producing an intermittent supply of live and frozen Artemia.

Methods Aquarium shops and aquaculture businesses were contacted either by phone or in person and a series of questions were asked based upon their current use of Artemia, preferences for a particular product and their inclination to purchase Artemia from a new supplier. Businesses contacted were mainly from the Central and Northern regions of Victoria with a selection of Melbourne shops contacted through their membership of the Marine Aquarium Shops Association (M.A.S.A.). Questions included: current use, quantity, form (i.e frozen, live), cost, frequency of orders, preference for size (juvenile forms [1- 3mm] to adults [3-8mm]), interest in enrichment procedures and whether they would switch to another producer.

Results In summary, the majority of aquarium/pet supply businesses contacted in this survey were very interested in finding a supplier who could deliver Artemia regularly and at a comparable price to their current supplier.

Aquarium Industry Aquarium shops had a steady, fairly fixed demand for Artemia generally delivered on a weekly (live) or monthly (frozen) basis. There was little interest in buying Artemia in the cyst or dried form. Frozen Artemia is generally bought as frozen 100 g "choc-block" packets divided into 12 smaller squares. Each square is sealed separately from the others. Major suppliers are Aquarium Industries based in Melbourne, Posaqua based in South Australia and Hikari, a Japanese-based firm. Live Artemia are purchased in 1 to 2 litre bags and then sold on in scoops, approximately 40 g per scoop. Shops were unsure what quantity of Artemia was in the bags but said they were stocked at very high densities. Most stores sell between 4 and 40 packets a month with one major store in Bendigo estimating they sell between 100-300 packets a month. The total current demand for frozen Artemia at the shops contacted is around 450-500 packets a month (i.e. 45-50 kg/month). A block generally retails at around $3.60 with the one major supplier selling them for around $2.50 (i.e. $25-36/kg).

Most shops preferred the frozen product to live for ease of storage and sale although the more specialised shops were interested in the live trade (particularly the Melbourne stores). There was no real size preference for Artemia. Currently only adult stages are sold (3-6mm) and most shops were happy with this. Again the more specialised shops were different in that they were also interested in smaller sizes (1mm to 8mm). All but two shops were interested in switching to a local producer providing the product and price were similar. Indeed four businesses were so desperate for Artemia that they asked to be contacted as soon as Artemia were ready for sale. The bigger businesses were also concerned with the reliability of supply, in particular that of live Artemia, as currently such supply is intermittent.

Over the last couple of months there have been some real problems of availability, with several shops having to ration out Artemia to customers as they are unable to get enough stock from their wholesalers. Four shops that didn't sell Artemia wanted to stock them as they had regular inquiries but couldn't find a supplier. AQIS was contacted about the import rules as several shop owners had said that the Artemia had to be subjected to gamma radiation now. This, they said, led to a partial thawing of the product and a decrease in the quality. AQIS advice on this matter was inconclusive but it was suggested that this would only occur if the Artemia were infested with other contaminants. Generally

quarantine rules stipulate that Artemia have to be frozen for 7 days at -18 degrees. Whatever the reason, there is a current shortage of Artemia.

A representative of Aquarium Industries (a wholesaler to about 600-700 shops) agreed there was a window of opportunity at the moment. Aquarium Industries has stopped pushing Artemia sales recently but would be interested in purchasing Artemia if they were packaged in a similar way to the current product (i.e. frozen blocks), were reasonably priced and, most importantly, could be supplied on a regular basis.

Aquaculture Industry Aquaculture businesses generally used the cyst form of Artemia, which could be hatched on demand. The newly-hatched Artemia were fed to Murray cod and golden perch. Current Artemia use from the businesses contacted is around 100 tins (500 g/tin) a year with the majority being used between September and February coinciding with the natural breeding cycles. Several farms were working on intensification of their setups and foresaw a greater, more even use of Artemia over the year. Most farms were interested in purchasing Artemia, predominantly live but with some demand for frozen. Interest was mainly to reduce the time and effort involved in their own Artemia production. However, there were several questions that farmers were worried about. Firstly, the possibility of Artemia introducing disease into their closed systems. This could possibly be prevented by holding Artemia in hypersaline water prior to transport. Secondly, the reliability and regularity of supply. If farms stopped producing Artemia they wanted the assurance that they could rely on a constant supply. Thirdly, the nutritional value of Artemia is not that high, although enrichment procedures would boost this (via algae feeds or micro-encapsulated diets). Farmers were then concerned with possible deterioration in water quality through uneaten Artemia. Overall, most aquaculture farmers were interested in purchasing Artemia from a local source.

Conclusions and Recommendations: The demand for Artemia, both frozen and live, is greater than the current supply. It is foreseen with the growth of both the aquaculture and aquarium industries and tougher quarantine regulations, that the demand for a locally produced Artemia will continue to increase. With frozen Artemia currently retailing in the aquarium trade for around $25-36/kg and live Artemia for around $60-70/kg, it seems that the aquarium industry alone is a lucrative market. Discussions on the production costs with the owner of Pyramid Salt Pty. Ltd. indicated that they could still be sold at a profit at $8/kg. This figure is significantly lower than current prices and this estimated cost seemed reasonable to wholesalers and retailers alike. However, a major concern for most businesses contacted is the reliability and regularity of supply, particularly with regards to live Artemia, but also with the frozen product.

Disease prevention, particularly in the aquaculture industry, was also an important point many farmers made. Different procedures which can be used to ensure that Artemia sold are pathogen free may assist in addressing these concerns.

Concerns with the low nutritional value of Artemia from both the aquarium and aquaculture industry indicate there is a need for work in this area. Whether different strains of Artemia would be more nutritional, the use of enrichment diets, or the production of an alternative, more nutritional species (mysis shrimp were mentioned) are possible areas for future research. This was also a point made by David White from Skrettings. Although Artemia could be used as a fish meal substitute in diet formulation, its relatively low nutritional value compared to the low cost of fish meal (US$600- 700/tonne) make it an unlikely alternative. There is also a huge need for large quantities of fish meal, with one feed factory using over 20,000tonnes a year. However, it was suggested that if there was some higher technical intrinsic value (such as enrichment) there may be a small niche market for Artemia as a fish meal substitute.

Overall it seems that there is a very high demand for Artemia at least in Victoria. The current small- scale producers cannot satisfy the current demand and perhaps could be incorporated into any new production plans. Nationally it is also anticipated that a similar demand exists. Posaqua (S.A) produces around 20 tonnes of Artemia a year but still cannot supply all buyers. Several Queensland prawns farms have recently contacted Posaqua about their ability to produce 1kg blocks of frozen Artemia for post-larval feed but Posaqua is unable to cater to this demand. With the large number of prawn farms in Queensland, this could be a further lucrative market for any large-scale production.

Appendix II: Literature review of Artemia (Artemia spp.)

The brine shrimp (Artemia spp.) is a small crustacean that is widely distributed across the salt lakes and coastal salinas of the world (Tackaert and Soregeloos, 1993). Artemia, otherwise known as brine shrimp or sea monkeys, belong to the phylum Arthropoda and the class Crustacea. Artemia are used throughout the world in prawn and finfish hatcheries as a source of live food for juvenile stages of commercial aquaculture species.

Life History and Ecology Artemia are known to exist in throughout the world in saline or brackish waterways. Typically these waters have salinities within the ranges of 70-250 ppt (Van Stappen, 1996) and water temperatures 6- 35oC (Personne and Sorgeloos, 1980). Artemia thrive in the wild where conditions are such that there are virtually no predators and there is limited competition for food. The ability to live in these hostile conditions can be attributed to the physiological adaptations that the Artemia have developed, including:

• a highly efficient osmoregulatory system • an ability to cope with low dissolved oxygen levels at high salinities and • the capability to produce ‘dormant cysts’ to counter adverse environmental conditions (Van Stappen, 1996).

Under normal (favourable) conditions fertilised Artemia eggs develop into free swimming nauplii. However, when conditions are unfavourable (e.g. when salinity levels are too high or temperatures too extreme), the Artemia produce embryos which are surrounded by a thick shell and which enter a state of metabolic dormancy before being released by the female and becoming desiccated. Once in this stage they can remain inactive until such time as conditions improve, or for aquaculture purposes are artificially brought out of their dormancy through re-hydration. When the cysts are re-hydrated, after a period of time the outer membrane bursts and the embryo emerges, continuing its life cycle to become a free swimming nauplius (Van Stappen, 1996). Due to the cyst’s limited mobility it relies on such things as migrating birds and wind and wave action to aid its dispersal.

According to Geddes (1980), two genera of brine shrimp (Artemia and Parartemia) occur in Australia, with Artemia likely to be introduced and Parartemia endemic.

Use in aquaculture Artemia is widely used in aquaculture as a larval diet for many species (Lavens and Sorgeloos, 2000). Although it is not a natural diet, it was selected due to its convenience and good nutritional value. Dormant Artemia cysts can be stored for long periods in cans and then used as an off-the-shelf food requiring only 24hours of incubation. The market for Artemia cysts is dominated by production from the Great Salt Lake, Utah, USA, which accounts for around 90% of the world’s commercial harvest (Lavens and Sorgeloos, 2000). The price and availability of Artemia cysts can be highly variable depending on the annual yield of Great Salt Lake, but it is believed that in the future this unstable market price may achieve some stability through the more recent emergence of Asia as a new supplier.

Aquaculture Production Systems Bossuyt and Sorgeloos (1980) described an aquaculture system for the high density culturing of Artemia biomass and identified the following pre-requisites for a culture system:

• good oxygenation of the medium to allow culturing at high density (thousands of animals per litre) • continuous circulation of medium to maximise food availability to the Artemia which are swimming continuously • shallow water depth (<1m) to allow the use of inexpensive axial blowers • possibility for automation, which implies that water exchange should be restricted and • possibility to expand using same tank design and culture techniques.

The culture system was an air-water-lift operated raceway (AWL-raceway) which consists of a rectangular tank with a central partition and air-water-lifts (AWLs). The configuration of the tank and the positioning of the AWLs delivers a screw-like, unidirectional circulation that has the following effects:

• aeration of the medium is continuous • circulation of the whole medium is homogeneous • nearly all of the particulate matter is kept in suspension • feed added at one place is distributed all over the tank within a few minutes and • the system can be scaled up – assuming the height-width ratio of the culture tank is maintained.

Feeds and Feeding Compared with other crustacea, Artemia has a very primitive feeding mechanism (Dobbeleir et al. 1980). It is a continuous, non-selective, obligate phagotrophic (particulate organic matter) filter feeder that continually remove suitably sized suspended particles of any sort from the culture medium. Various food sources both live and inert have been successfully used to culture Artemia from naupilus to adult (Table II.1) Table II.1: Some live and inert food sources known to support good growth in Artemia (after Dobbeleir et al. 1980)

Diet type Specific Live algae Diatomeae: Chaetoceros; Cyclotella; Phaeodactylum; Nitzschia. Chlorophyceae: Dunaliella; Chlamydomonas; Platymonas; Stichococcus; Stephanoptera; Brachiomonas. Chrysophyceae: Isochrysis; Monochrysis; Stichochrysis; Syracosphaera. Dried Algae Chlorella: Scenedesmus; Spirulina. Yeasts Bakers and Brewers yeasts Various inert Wheat flour, fish meal, egg‐yolk, homogenised liver and rice powder/ bran. products

To optimise feeding efficiencies in Artemia culture, the diet must be of an optimal size in order to fit in the shrimp’s mouth. The maximum size range for particles that can be ingested is 25-30μm for nauplii and 40-50μm for adult Artemia (Dobbeleir et al. 1980). According to Dobbeleir et al. (1980) both live and inert food sources have been used with success in the rearing of Artemia, however it would appear that best results are achieved through the use of live feeds. The use of live algae is however a logistically unfeasible option due to the difficulties and expenses associated with its production as opposed to inert feeds. Table II.2 summarises the performance of inert feeds in Dobbeleir et al. (1980).

The most efficient feed conversion for Artemia occurs at constant food densities (Bossuyt and Sorgeloos, 1980). The turbidity of the culture medium is measured using a secchi disc and food is added until the turbidity of the water is 15-20 cm. According to Bossuyt and Sorgeloos (1980) in order to maintain these constant food densities an automatic feeder should be used in conjunction with a type of waste separator. The authors found that yields of 2.0 kg wet weight biomass can be produced in a 1,000 litre raceway within about 2 weeks of culture starting from 10 g of cysts (Table II.3).

Table II.2: Performance of inert diets (Dobbeleir, et al. 1980).

Diet Performance Wheat bran: Survival <10% after 10 days and the larvae reached a length of only 2.08 mm; nutritionally insufficient. Soybean: 80% survival maximum larval length of 3.24mm; high ammonia levels after 4‐5 days batch culturing due to high content of soluble proteins; can be overcome by separating with cream separator; 20g cysts to 3.8kg adult biomass in 2m3 in 14 days at 25oC) Rice bran: Average length of 4.26 mm; survival >80%; raw product requires processing before it is suitable; up to 50% wasted; Defatted rice bran not available in Australia; 4 kg biomass produced in 14 days at 28oC.

Table II.3: Production results obtained for various test batches at a stocking density of 1-3 nauplii/ml (Bossuyt and Sorgeloos, 1980) Tank volume Culture Period (days) Wet weight harvest (g) (litres) 350 21 900 1,000 7 1,250 1,500 7 1,800 2,000 21 5,000 2,500 7 3,250 5,000 10 12,000

Dhert et al. (1992), described a method whereby the efficiency of Artemia production could be improved by incorporating a feed reservoir that delivered feed to the tank by siphon. Wastes were removed through a cylindrical screen of various mesh sizes (150-400 μm) placed over the outlet. This allowed water exchange through the culture tank. Yields of up to 5 kg/m3 (wet weight) and 25 kg/m3 (wet weight) can be achieved after 14 days culture could be achieved for stagnant and flow-through cultures respectively (Dhert, et al. 1992).

Dhert et al. (1992), examined the influence of feed (rice bran) concentrations and stocking densities on the growth and survival of Artemia. It was reported that animals of identical lengths could be produced from several combinations of food concentrations and larval densities, but at high animal densities longer rearing periods are required. The study also found that feeding became more efficient after day 4 of production when the thoracopods had developed on the shrimp. Survival was found to be dependent on the initial stocking density, as at lower densities high mortalities result from overfeeding. Optimal feed concentrations for stocking densities between 5,000 and 8,000 animals/litre was found to be 180g/m3.

Optimising salt production with Artemia The role of Artemia in optimising the quality and quantity of solar produced salt was examined by Tackaert and Soregeloos (1993). Salt production ponds are man-made artificial ecosystems that are highly vulnerable to algal blooms that can contaminate the salt with gypsum and other insoluble materials and lead to reduced evaporation. The introduction of Artemia into these systems in sufficient numbers can control these algal blooms which should lead to improved salt production and also provide opportunities for the harvesting of cysts and biomass.

Appendix III: Business Plan

INLAND SALINE AQUACULTURE PROJECT AT PYRAMID HILL

BUSINESS PLAN

Prepared for Gavin Privet Pyramid Salt Pty. Ltd, Pyramid Hill- Boort Road Pyramid Hill VIC 3575

Introduction Pyramid Salt Pty. Ltd, is located around 50km south of Kerang in northern Victoria and extracts salt from saline groundwater pumped from beneath the Tragowel Plains. There are 20 ha of saline evaporation ponds used in the salt production process at the Pyramid Salt site. One million litres of saline water are pumped from 10, ten metre deep boreholes each day into a series of thirteen solar evaporation ponds. As the water progresses through the ponds it becomes saltier until it finally crystallises out. The salt is then harvested purified, dried, sifted and bagged. The company currently produces 3,000 tonnes of salt per year, but will produce 10,000 tonnes when at full production. Pyramid Salt produces salt of different purity levels which can be used in food, pet food and manufacturing industries. It also produces an award-winning gourmet flake salt, which supplies restaurants and supermarkets in Melbourne, Brisbane, Adelaide, Perth and Sydney.

The environmental benefits of producing salt from saline groundwaters have been documented by Pyramid Salt. Over the 8 years that they have been in operation, the water table in the surrounding area has fallen from 0.5m to 6m and previously degraded land has been restored to productive use. Surrounding farms have shown increased productivity from clover pastures, cereal crops and vegetables – thanks to the groundwater pumping of Pyramid Salt. From the monitoring data, Pyramid Salt estimate that 20 ha of evaporation ponds will benefit around 1,000 ha of salinised land.

In addition to salt production, Pyramid Salt also has the capacity to produce heat energy through an innovative and cost-effective Solar Pond™ system. Pyramid Salt and its partners RMIT and Geo-Eng Australia Pty. Ltd, have proven the viability of this technology. There are strong prospects for commercialisation to reduce greenhouse gas emissions and fuel costs in a variety of rural and regional industries such as dairy food production, drying fruit and grains and aquaculture.

Both irrigation-induced and dryland salinisation are present over large areas of the Murray-Darling Basin and in Victoria alone the direct cost of salinity (i.e. in lost agricultural production) is estimated to be $50 million per year with some 140,000 ha of irrigated land and 120,000 ha of dryland significantly affected. Given the scale of the salinity problem, the technology developed at Pyramid Salt has huge potential to help rural communities rehabilitate degraded lands and produce new value- added products. The company’s ambition in the long-term is to clean up the Murray Basin and bring industry and prosperity to country Australia. It has recently joined forces with the Murray-Darling Basin Commission to develop a larger (250 ha) saline groundwater pumping site at Pyramid Creek, Leitchville, Northern Victoria.

As part of Pyramid Salt’s long-term vision to explore and develop new technologies to value-add otherwise unproductive salty water, it has entered into another joint venture to investigate the potential for commercial inland saline aquaculture at the site. In 2003, the site was adopted as a demonstration site as part of the Ecologically Sustainable Agriculture Initiative (ESAI) project “Ecologically Sustainable Agriculture through Aquaculture Integration”. This is an initiative of the Department of Primary Industries and co-investment was also obtained from the Rural Industries Research and Development Corporation (RIRDC) to employ a full-time manager at the site. This report outlines the business case for Artemia, or brine shrimp, production at the Pyramid Hill site.

Proposed aquaculture development

A schematic diagram of the Artemia production system at Pyramid Salt is shown in Figure III.1. Culture will take place in an indoor tank system with water supplied by a borehole with a salinity of 33ppt and temperature of 17oC all year round. Heat to the system will be supplied by the Solar Pond™.

Infrastructure The main aquaculture-related infrastructure components on-site are the aquaculture shed and the Solar Pond™.

Aquaculture shed The aquaculture shed and associated tanks and plumbing infrastructure were built on site in July 1999 in a previous attempt at commercial production of Artemia. The previous trials showed that Artemia production was technically feasible at the site, however, production was abandoned in July 2000 due to the conflicting demands on time of other businesses at the site. The infrastructure at the site had been unused since that time. There are ten concrete tanks in the aquaculture shed, each with a capacity of 5,000 litres.

After the site was adopted as a demonstration site for the ESAI project, infrastructure at the site was repaired and upgraded to make it suitable for commercial production. This work was completed in March 2004, when the Hon Bob Cameron, Minister for Agriculture, formally commissioned the facility. Since that time trials have been conducted to optimise production protocols at the site.

Solar Pond™ Pyramid Salt established Australia’s first Solar Pond™ in 2001 as a joint venture with RMIT and GeoEng Pty. Ltd. (partly funded by a grant from the Australian Greenhouse Office). The 0.3 ha pond is designed to produce energy for commercial use by storing heat in layers of water separated by a density gradient (created by water of different salinities). The lower layers of the pond can reach 80oC and this heat is extracted from the pond bottom by means of a heat exchange system and used in the salt purifying process. In August 2004, funding was granted by the Innovation Sub-Project of the Our Rural Landscapes Initiative (DPI) to plumb the Solar Pond™ to the aquaculture shed. This had eliminated the requirement for costly conventional heating in the aquaculture shed.

Solar Pond BORE Solar pond produces Water is pumped from a heated water which bore at 17°c and 33 ppt. can be used to reduce heating costs.

Temperature of water in hatchery can be varied to suit the culture species. Hatchery complex

Evaporation Pond Wastewater will be Sump

returned to evaporation

ponds.

Figure III.1: Schematic diagram of Artemia production facilities at Pyramid Salt.

Production methods Production of Artemia begins with the re-hydration and decapsulation of dried cysts imported from the USA. Decapsulation removes the shells from the cysts and is carried out using standard protocols. The cysts are hatched out in a custom-built tank using borewater heated to 25-26oC. In addition to aeration, a halogen lamp is used to keep the hatchlings suspended in the water column. Nauplii (Instar 1-2) are stocked in 5,000 litre production tanks at a density of approximately 5,000/litre. The nauplii are held at a temperature of 25-28oC for around 14 days until they are adults. At this time they are harvested manually using appropriately sized screens and nets, and thoroughly rinsed before being weighed and frozen.

Artemia are cultured in static tanks (rather than flow-through) with occasional water exchanges. Any water leaving the tank is filtered through a 200μm screen to ensure that no Artemia escape to the sump.

Production estimates Estimates of production at the site have been made assuming a staged increase in production over the first five year of operation until the capacity production of 5 tonnes per annum is achieved (Table III.1).

Production estimates for Year 1 were made taking into account that this was the first year of production and optimal production techniques were still to be finalised. On average, 2 tanks were harvested each week from September 2004 (10 months left in financial year) with an average yield of 14 kg per tank. In Year 2 it is assumed that on average 3 tanks would be harvested per week with an average yield of 15 kg (total production 2,340 kg). In Years 3 and 4, production would increase further to 4 tanks per week with an average yield of 15kg per tank (total production of adults 3120 kg). When the system is running at full-capacity, 5 tanks per week will be harvested with an average yield of 20 kg/tank.

Table III.1: Production estimates for Artemia production at Pyramid Hill.

Production Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Adult Artemia (kg) 0 1,120 2,340 3,120 3,120 5,200

Market analysis A market appraisal for Artemia was conducted in September 2003, as part of the process for selecting a species to produce commercially. The market study found that there was a strong demand for a reliable supply of locally produced product in the aquarium industry around Bendigo. The preferred product was frozen 125g blocks of Artemia. There is also a potential market in the native fish aquaculture industry, however, this market would be seasonal and require Artemia at different stages of development to the aquarium market. Expected revenues from these markets are outlined in Table III.2.

Table III.2: Expected returns from various markets.

Year 1 Year 2 Year 3 Year 4 Year 5 Frozen 125g trays ($/tray) 4.00 4.20 4.50 4.50 4.50 Frozen 1 kg blocks ($/kg) 20.00 20.00 25.00 25.00 25.00 Newly hatched Artemia for native fish producers 25.00 25.00 25.00 25.00 25.00 ($/bag).

For the purposes of this business plan it is assumed that the aquarium industry will be the main target customer in Year 1, with more product diverted to other markets in subsequent years, as follows:

• Year 1: 90% of the Artemia produced will be in the form of 125g frozen blocks sold to retailers at $4.00 per pack. 10% will be in 1kg blocks for customers requiring large amounts of Artemia sold at $20.00/kg. A small amount of production will be diverted to the native fish aquaculture industry. • Year 2: A larger proportion of production will be diverted to larger customers in 1 kg blocks (25%). New markets such as native fish hatcheries that require newly hatched Artemia will be developed. Newly hatched Artemia will be marketed in 1 kg bags. • Years 3 and 4: 25% of production will be diverted to large customers.

Cost-benefit analysis

The cost-benefit analysis uses the production estimates and marketing assumptions outlined in previous sections and the results are summarised in Table III.3 and shown in detail in Table III.4.

Table III.3: Summary of income and expenses from Year 0 to Year 5.

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Income ($) Artemia production 0 34,996 71,668 105,240 105,740 175,400 Other sources 30,000 25,000 25,000 0 0 0 Total income 30,000 59,996 96,668 105,240 105,740 175,400 Expenditure ($) Capital expenses 20,632 0 0 0 0 0 Operating expenses 50,000 60,532 64,222 74,002 74,002 116,642 Total expenses 68,132 58,032 61,722 74,002 74,002 116,642

Operating profit ($) ‐38,132 1,964 34,946 31,238 31,738 58,758

Income In Year 0 there was no revenue from production and the primary source of cash income to the project was the cash investment from project sponsors. The ESAI/Fisheries Victoria project provided in-kind investment of staff time to assist with the management of the project and materials for the upgrade of the building. Pyramid Salt provided the aquaculture infrastructure, water, power, management assistance and technical support as in-kind investment. The cash investment will finish at the end of Year 2. It is envisaged that income from Artemia sales will increase steadily over years 1-5 of the project as production techniques are refined and markets are developed (Table III.5).

Expenditure Most of the capital expenditure related to Artemia production was incurred in Year 1 which led to an operating loss. Operating expenses in subsequent years were directly related to the volume of production, however, in years 1 and 2 electricity expenses were provided as in-kind support from Pyramid Salt.

Table III.4: Projected income and expenditure at Pyramid Hill, Year 0-5.

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Account Item Income Revenue from sales of Artemia ($) Frozen 125g blocks to retailers and 0 32,256.00 58,968.00 84,240.00 84,240.00 140,400.00 wholesalers Live Artemia 0 Large blocks to specialised aquaria 0 2,240.00 11,700.00 19,500.00 19,500.00 32,500.00 Specialised markets 0 500.00 1,000.00 1,500.00 2,000.00 2,500.00

Total returns ($) 0 34,996.00 71,668.00 105,240.00 105,740.00 175,400.00 Investment from other sources ($) Other sources 30,000 25,000.00 25,000.00 0.00 0.00 0.00 Total income ($) 30,000 59,996 96,668 105,240 105,740 175,400

Costs Capital costs ($) Plumbing etc 7,500 Insulation 4,701.40 Aerators 1,860 Heaters 1,650 Power supply 4,921 Total capital costs ($) 20,632

Operating costs ($) Labour 45,000 50,000 55,000 60,000 60,000 90,000 Electricity 2,500 2,500 2,500 2,500 2,500 2,500 Telephone 1,200 1,200 1,200 1,200 1,500 Travel 5,000 5,000 6,000 10,000 10,000 20,000 Cysts 900 1,560 2,340 2,340 4,680 Feed 2,688 Aquaculture licence 744 462 462 462 462

Total operating costs ($) 50,000 60,532 64,222 74,002 74,002 116,642 Total costs ($) 68,132 58,032 61,722 74,002 74,002 116,642

Operating profit ($) -38,132 1,964 34,946 31,238 31,738 58,758

Table III.5: Production and income projections.

Production Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Production (kg) 0 1,120 2,340 3,120 3,120 5,200 125g Frozen trays to retailers (no) 0 8,064 14,040 18,720 18,720 31,200 1 kg frozen trays 0 112 585 780 780 1,300 Newly hatched arts for native fish 0 20 40 60 80 100 producers.

Prices charged (GST not inc) 125g Frozen trays ($/tray) 0 4.00 4.20 4.50 4.50 4.50 1 kg frozen trays ($/tray) 0 20.00 20.00 25.00 25.00 25.00 Newly hatched arts for native fish 0 25.00 25.00 25.00 25.00 25.00 producers ($/bag).

Appendix IV: Images showing infrastructure at the site.

Figure IV.1: Images showing demonstration site before upgrading.

Figure IV.2: Images showing Inland Saline Aquaculture Demonstration Site after upgrading.

Figure IV.3: Delivering heat from the Solar Pond™ to the aquaculture tanks.

Figure IV.4: (a) Commissioning of the site by the Minister for Agriculture, Bob Cameron on 17 March, 2004. (b) frozen 125g product.