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Australian defense concerns may stop Chinese-backed iron ore mine expansion

The Australian government could exercise a law that allows it to prohibit access to areas near sensitive defense sites due to national security issues, The Sydney Morning Herald reported Aug. 20, citing Defense Minister Linda Reynolds.

This may stop Chinese-funded Cu-River Mining Australia Pty. Ltd.'s expansion plans for its Cairn Hill iron ore mine near South Australia's Woomera Prohibited Area, a weapons testing range.

"Given updated assessments of the evolving security environment, my department is examining how to audit and review permits and related processes, including in the Woomera Prohibited Area," Reynolds was quoted as saying. A move to cancel the company's right to access the mine or explore for tenements ahead of expansion could raise sovereign risk concerns. Sen. Rex Patrick suggested it could prompt compensation claims by the company, the report added.

The company is registered in Australia but is funded by China's JiuJiang steel group.

Cu-River has not yet filed any formal expansion requests for Cairn Hill, which it continues to access under a 2014 permit, though the state government said in 2017 that the company would invest A$800 million to expand magnetite production to 3 million tonnes per year initially and then ramp up to 15 million tonnes per year.