New Zealand fish farmer Mount Cook Alpine Salmon announced it will construct the country's first land-based salmon farm to raise king salmon and possibly sockeye salmon as well.

Mount Cook Alpine Salmon currently uses canals that are part of the country's hydroelectric power generation network to raise freshwater king salmon, but these have now reached capacity and the company is looking to expand further to keep up with demand.

Chief executive David Cole said the new farm would at least double the company's annual production of king salmon to between 6,000 and 8,000 metric tons of fish, and would be designed to produce no waste.

"The idea of perhaps a wasabi farm, for example, which is a good pairing with salmon, will help to purify that water and then we envisage it passing through a wetlands area before we return it back in its purest form to the lakes," he said.

The farm will cost NZ$16.7 million (€9.6 million/$9.5 million) to build, with the government committing NZ$6.7 million (€3.8 million/$3.7 million) from the Ministry for Primary Industries' (MPI) Sustainable Food and Fibre Futures fund.

"Demand for healthy, sustainably produced aquaculture products continues to grow, and land-based salmon farming will enable New Zealand to boost the supply of this high-quality, high-value product," said MPI investment program director Steve Penno.

The project will take six years and will focus on king salmon, but the company said it would also use the facility to attempt to commercially raise sockeye salmon, a species rarely used in commercial fish farming.

"We don't quite know how king salmon might perform in a land-based farm so the idea of the sockeye, which we know to school very well, is a risk mitigation as well as an opportunity for New Zealand."

The location of the farm is yet to be determined but Mount Cook Alpine Salmon has confirmed it will be in either the Waitaki or Mackenzie District.

The site is expected to be chosen by the end of the year.