Monday, March 30, 2009

Woomera! You're kidding me.

Australia's Treasurer Wayne Swan has told the Chinese company Minmetals it can't take over Oz Minerals because it mines at Prominent Hill in South Australia's Woomera prohibited area.

Swan: "The Woomera Prohibited Area weapons testing range makes a unique and sensitive contribution to Australia’s national defence. It is not unusual for governments to restrict access to sensitive areas on national security grounds."

Excuse me!

Granted, Swan's said funny things before. But "sensitive", "security"?

Once Woomera was home to Nurrungar, the top secret US spy base. But Nurrungar was closed a decade ago.

Now we're even talking about letting the Russians use Woomera. HT: Steve Kirchner.

In today's Australian the founder of Oz Minerals' Prominent Hill mine describes Swan's claim as "almost laughable".

"The prohibited area covers around one-third of SA, and there's a highway that goes up the centre of it and a railway," Minotaur Exploration managing director Derek Carter said.

"Any Chinese tourist could travel through there, take a tent with them and no one would know they were there."

The contentious mine, he said, was 170km from Woomera, while the "sensitive" weapons testing range was 40-50km north of the facility.

Security was adequately covered under the rules applying to a prohibited area, which required registration of the names of all people working in the area, and therefore at Prominent Hill."

So what's really going on?

John Garnaut has the only compelling theory:

"Rudd has appeared embarrassed about his deep and clear-eyed knowledge of China and has shied away from leading intelligent domestic discussion. The vacuum has now been filled by vested interests, maverick senators and ageing cold-war commentators.

The result is red peril hysteria.

Since Chinalco's initial Rio Tinto investment the Government has thrown up a series of arbitrary investment barriers apparently to look like it is "standing up to China" - a stance the Howard government never felt necessary to take. It has sent a message to the Australian public that Chinese money is inherently dangerous."

It's worth reading in full.

Rudd and Swan are either fools not properly fit to govern, or there is something about Woomera they are not telling us.

Of course, there is a compelling argument for preventing one of the biggest buyers of Australian minerals from owing the company that sells them.

But lets discuss it OPENLY!!!


Stephen Kirchner said...

Pete, note the Russian story is not new, its nine years old, but the point still stands.

Peter Martin said...


Interestingly, the Russia story dates from 1999, the year Nurrungar was decommissioned, suggesting that from that time on Woomera was no longer regarded as particularly sensitive.

Perhaps until now.

MkeM said...

Minmetals is politely taking Swan's refusal at face value. Reuters reports today:

"SYDNEY, March 30 (Reuters) - Chinese state-owned Minmetals has put a revised offer to miner OZ Minerals (OZL.AX), after Australia rejected its original $1.7 billion bid on national security grounds, the Australian Financial Review reported on Monday.

"Without citing sources, the paper said the new Minmetals proposal, put to the OZ board on Sunday, was to buy most of OZ's assets apart from its key Prominent Hill copper and gold mine, near the Woomera military installation in outback Australia.

"OZ Minerals was not immediately available for comment on the report.

"Federal Treasurer Wayne Swan said in a statement on Friday that he would not approve a Minmetals takeover of OZ that included Prominent Hill.

"Minmetals immediately responded saying it wanted to find an agreeable solution."

It will be interesting to see what happens now.

Marek said...

Just saw a report that BHP may bid for Prominent Hill. Makes sense it is close to olympic dam

badmofo said...

"Any Chinese tourist could travel through there, take a tent with them and no one would know they were there."
They probably would be noticed if said tourist was carrying around equipment used for electronic warfare/intelligence. Such equipment would also probably be detectable in an open environment. I'm not an expert but I would assume that it would be much simpler to locate & hide (physically & electronically) such equipment in an active mine site.

The site is used by defence and DSTO for testing (including in partnerships with allied forces). Some of this testing includes advanced propulsion systems such as scramjet technology.

Of course, I could be completely wrong, as I said I'm not an expert. So I would be interested to hear from an actual defence-intelligence expert about possible risks, if any, rather than rely on the threat assessment of a mining company executive seeking a bailout.

Anonymous said...

The mine must have value if the Chinese want to buy. Besides the Chinese having a mantra: 'Use their resources before we use ours', they are smart with money.

Why not give the current stimulus package a bit of a haircut of say $1.7B, buy the mine outright, cut the cash bribe from $900 to say $800 (or whatever) and end up with an asset that actually produces some export income. Alternatively, forget the mine, go the full $900 bribe and just continue to play consumers.

badmofo said...

Further to my earlier comment, from the 7:30 Report (30/03):
"MICHAEL BRISSENDEN: Gregor Ferguson from Australia Defence Magazine says Woomera is particularly important for testing for unmanned air vehicles and surface to air missiles.

Both the British and the American defence departments have become, if anything, more reliant on the area.

GREGOR FERGUSON: Because we buy so much equipment, and particularly things like fast jets and helicopters and guided weapons from our allies in - particularly the UK and the US, but also France and Germany and other places - I think we have an obligation to them, as well as to our own security, to ensure the integrity of our security and test facilities."

Anonymous said...


Sadly I think in the whole article one word stood out to me and it was at the end in your intelligent call for 'open' debate...

Sadly it seems Swan and Rudd are anything but open...I don’t get it to be honest but they seem so intent on the 'spin' cycle, on seeming rather than doing and absolutely s..t scared of the word 'open'...why?



derrida derider said...

Of course the "national security" bit is entirely bogus and the real reason is that we don't trust the Chinese buyers not to do some nifty transfer pricing. But it would be undiplomatic to say that out loud.

What you think is "openness" the Chinese would think is "insulting". We've instead saved face all around; the Chinese will get the message loud and clear.

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