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A Chinese-linked company has been granted a mining licence on a remote West Australian island close to a military training area, sparking concerns inside the federal government, according to reports.
Cockatoo Island is a tiny, 31 square kilometre island in the Buccaneer Archipelago off northwestern WA’s Kimberley region, around 2000 kilometres from Perth.
The island, which boasts an airstrip, was mined for iron ore by BHP from the 1950s to the 1980s and was briefly home to a four-star tourist resort built by disgraced businessman Alan Bond in the 1980s using the old mining village’s infrastructure.
A sign greeting visitors to the resort once read, “Welcome to the least known island paradise in the world.”
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Mining resumed on Cockatoo Island in the 1990s under HWE Mining and later Pluton Resources, until the Perth-based company collapsed in 2015.
In October, it was announced that a private, Hong Kong-based company was the new owner of the abandoned iron ore operations, with WA’s Department of Mines approving a new lease that will expire in 2032.
Documents filed with the Australian Securities and Investments Commission show three of the six directors of Subiaco-registered Cockatoo Island Mining Pty Ltd were born in China.
The directors currently reside in Australia, India, Hong Kong and China, including one whose address is listed at the “staff residential complex” of the state-owned Taiyuan Iron and Steel Group in the northeastern Shanxi province.
Cockatoo Island Mining’s directors say they want to “establish a world class and responsible mining operation, within an area that has demonstrated high-grade iron ore deposits”.
ABC Rural has previously covered the long-running headaches for receivers attempting to sell the mine, which requires constant water-pumping as its main deposit now sits below sea level.
The ABC reported on Friday that while the 2020 deal was signed off by the Foreign Investment Review Board, it has still alarmed some inside the federal government and Defence Department, who believe it is similar to the controversial Port of Darwin lease to a Chinese state-owned company.
Cockatoo Island is next to the 5600 square kilometre Yampi Sound Defence Training Area, which was acquired by the Defence Department in 1978, and is also close to the strategically important northwest shelf gas fields, a senior national security official noted to the broadcaster.
The Defence Department confirmed to the ABC that the training ground had been used for a total of 19 days by Regional Force Surveillance units and Special Forces units over the past 12 months.
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Treasurer Josh Frydenberg last year introduced a new national security test to Australia’s foreign investment rules, but the changes did not come into effect until January 1.
Notably, the changes allow the Treasurer to step in and reverse a FIRB approval, if new national security concerns arise.
Prime Minister Scott Morrison also last year passed new foreign relations laws giving the Commonwealth power to tear up agreements between state or local governments and foreign powers, if they are deemed to be against the national interest.
But the foreign relations laws only apply to government-to-government deals, and do not cover private companies.
Liberal Senator Concetta Fierravanti-Wells told the ABC she was alarmed by the deal.
“The Cockatoo Island ‘transaction’ is yet another example of why acquisition of strategic assets from governments in Australia by ‘private companies’ with links to Beijing should come within the scope of both FIRB and foreign relation legislation,” she said.
“This ‘transaction’ is another glaring example of our defective federal laws. China’s company and national security laws require that the Chinese Communist Party ‘control’, not only China’s state-owned entities, but also Chinese ‘private companies’.”
A spokesman for the Defence Department said it “does not comment on potential, current or past Foreign Investment Review Board cases”.
He insisted there were a “range of security mechanisms in place” at the Yampi Sound Training Area, which is “predominantly used for land and vehicle based training activities”.
“Defence has a multi-layered approach to managing security across its estate, which includes addressing security risks through protective security, contractual arrangements, and legislative protections – these arrangements are regularly reviewed and adjusted,” he said.
“Defence does not comment on the detailed security arrangements at individual Defence facilities.”
The Treasurer’s office and the WA Department of Mines have been contacted for comment.
The news comes after a Chinese ‘research’ vessel was spotted in the area.
Ryan Martinson, an assistant professor in the China Maritime Studies Institute at the US-based Naval War College, posted graphics from March 6 that show the Shiyan 3’s movements off the coast of WA.
He said the vessel was owned by the South China Sea Institute of Oceanology, Chinese Academy of Science.
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