Credible rejection of Chinese mine bid?

It's difficult to call this, one way or the other. The generally xenophobic reaction to three recent, high-profile, Chinese resource bids (Rio, Ozminerals and Fortescue) is a good reason to be alert to a questionable 'national interest' claim.

Some people have smelled a rat in the Treasurer's announcement that he won't approve OzMetals' $2.6 bn sale to China's MinMetals, on national security grounds, if the deal includes the Prominent Hill property (it appears from his statement that he will approve a different configuration of the deal):

"The location of Oz’s Prominent Hill mine – within South Australia’s vast Woomera Prohibited Area, which is the size of England – was cited by Canberra as the problem. But it was pointed out that the ‘sensitive’ weapons testing range that is said to make a valuable contribution to Australia’s national defence was at least 150 kilometres away from the Prominent Hill site." Extract from Financial Times

Hmm… this sounds suspicious. My view is that only a credible 'national security' claim could be sufficient to justify threshold (i.e. at the border) barriers to foreign investment. Do the facts on the ground justify a national security barrier in this case?

The Prominent Hill mine is almost 200 kms from the town of Woomera as the crow flies, but less than that (maybe 100kms) from the ordinance target areas, by my calculations. I've used the maps and other information in the 'Woomera capability brief' to draw an overlay on a Google Earth image (click the first thumbnail). The closest marked ordinance target area to Prominent Hill the Parakylia 'stand-off' target area about 100kms north west of the Woomera township (second thumbnail).

But, as the 'Capability Brief' reveals in some detail, the Range is also used for some purposes that seem to need a very large testing range, much larger than would be used for ordinance. For example:

• Tactical missile tests delivered by intercontinental U.S. (B-52 bomber) flights;
• Tests of ground-to-air missiles with a long range;
• Scram-jet (hpersonic jet) engines launched on rockets with 450km range;
• Long-range surveillance-drone tests

Does this justify restricting foreign investors' access to mines in a zone "the size of England"? Possibly. I just don't know for sure. Does it justify restricting access specifically to Chinese-owned mining companies (but not, e.g. British-owned). Possibly. I'm skeptical, but it's not implausible.

Here's some more news of the first gold production at Prominent Hill in Feburary this year from the Coober Pedy Regional Times

Tags for this entry: policy china investment firb minerals