All-Australian workforce only at Chinese-backed Woomera mine

Cu-River Mining Australia corporate service manager Leo Liu and logistics manager Mark Hoepfl at the container terminal at Outer Harbor. Picture: Bianca De Marchi

May 23 2019

A Chinese-backed mining company has pledged to permit only Australians to work on its mine amid a defence crackdown on the secretive Woomera Prohibited Area where Australia and the US secretly test state-of-the-art weapons.

The crackdown, announced last month in a review of the Woomera site management, calls for tighter rules on who can access mines in the area and says Defence should consider whether companies have “substantive Australian ownership, control and influence” before granting permits.

Adelaide miner CU River said it planned to expand its Cairn Hill mine in the area (WPA) this year — where production is currently suspended — with the help of an $800 million finance facility, but it needed the green light from the Defence Department.

CU River’s external ­affairs manager, Shelaye Boothey, said the miner accepted the government review’s recommendations and acknowledged Australia faced a “changing threat environment”.

The review reveals heightened concerns about espionage at Woomera and warns information relating to hi-tech missile and satellite technologies could be ­stolen by foreign powers to be used against Australia. “Australia’s position as a major commodity supplier, scientific and technological innovator, and potential joint-venture partner makes it a target of foreign states seeking to gain an advantage,” the review said.

Ms Boothey said the approval of the ­Department of Defence to operate within the WPA was critical to CU River’s expansion plans.

“We have worked collaboratively with the department on ­security planning and crucially have offered that only Australian employees and DISP (Defence Industry Security Program) accredited contractors will work on the WPA. In ­addition we have worked with third-party ASIO-endorsed risk consultants to ensure the strictest security arrangements will be implemented at each project.”

Ms Boothey said the miner wanted to establish three mines in the WPA by 2024 to produce 15 million tonnes a year of premium-grade magnetite for the Chinese steel industry.

US military contractor Raytheon Australia won a contract to upgrade the WPA in 2016 and Defence expects to spend $900m there by 2025.

The report also lays bare the tensions over use of the WPA, with Defence suggesting Woomera’s quiet electromagnetic ­environment makes it increasingly unique worldwide, coveted by other allied nations.

At the same time the South Australian government is ­encouraging the mining industry. The value of future mines in the WPA is between $6.4 billion and $19bn as it overlaps with 30 per cent of the Gawler Craton, one of the world’s major mineral provinces.

Scientists involved in Australia’s fledgling space program and traditional Aboriginal owners also want access to the site.

The government commissioned Gordon de Brouwer to write the review and Assistant Defence Minister David Fawcett said last month that the ­Coalition accepted its recommendations. A government source said the review was to set guidelines for future mines.

It could result in foreign ­investors having more restricted access to their own projects.

“Defence should implement a policy of arm’s-length foreign ­investment in the WPA for operations where foreign influence or related factors are a concern, under an arrangement where the investor has limited or no physical access to the area, uses only approved contracted services for any on-the-ground work or plant and equipment, and is subject to strong compliance,” Dr de Brouwer wrote.

CU River previously called for Defence to provide companies with more clarity around permits to the site. “There are issues with security clearances for non-Australians,’’ it said.

“While CU River is an Australian-registered company privately owned by an ­Adelaide resident with permanent resident status, it does have Chinese business relationships and we know this makes it more difficult to obtain permits and approvals from DoD.’’

CU River is a privately-owned iron ore producer run by Adelaide businessman Yong Gang Shan. It has a funding agreement with Jiujiang Mining Australia — a local subsidiary of a Chinese steel producer.

CU River has bought an export facility site at Port Augusta.