Aussie govt blocks sale of cattle station

There have been concerns about the sales of vast tracts of Australian farmland to foreign investors in recent years, particularly firms from China.
There have been concerns about the sales of vast tracts of Australian farmland to foreign investors in recent years, particularly firms from China.PHOTO: AGENCE FRANCE-PRESSE

Foreign bids for land rejected to protect sensitive military site

Australia has barred foreigners from buying one of the world's largest cattle stations but insisted the move was not "discriminatory" and was designed to protect a sensitive weapons site.

Australian Prime Minister Malcolm Turnbull, explaining the move to block the long-awaited sale of cattle company S. Kidman & Co, said the federal government was concerned that selling the vast outback territory to foreigners was against the national interest.

Part of the A$350 million (S$354 million) series of cattle stations is in the Woomera Prohibited Area (WPA), a 122,188 sq km military site in South Australia which marks the largest testing range in the world.

"It's a huge piece of Australia, these Kidman properties being sold in one line, and a large part of the acreage is in the Woomera Prohibited Area," Mr Turnbull told reporters yesterday in Manila.

"Plainly, the Woomera Prohibited Area is called the 'prohibited area' for a reason. It is actively used for weapons testing and trials and it's an area that obviously raises national security issues."

The controversial decision follows growing debate about a decision to lease the port in Darwin to a Chinese privately owned firm, Landbridge Group, which has links to the Chinese military.

There have also been concerns about sales of vast tracts of Australian farmland to foreign investors in recent years, particularly firms from China.

Asked about a possible backlash from the Chinese government, Mr Turnbull said: "You would be wrong to assume that there was only one foreign country associated with buyers. So there's no issue of discrimination here."

The 116-year-old Kidman firm owns land covering 101,000 sq km, a territory about the size of South Korea which makes up 1.3 per cent of Australia's entire land mass and about 2.5 per cent of its farmland. It is believed to be the world's largest privately held block of land, excluding territory held by monarchs, and includes 185,000 head of cattle. 

A Hong Kong investment firm, Genius Link Asset Management, and China's Shanghai Pengxin Group were believed to be the leading bidders. But half of the Anna Creek cattle station, the largest property in the portfolio, sits in the Woomera defence site.  

Australia's Defence Force says the site was set up as a military area in 1947 and is "used for the testing of war material under the control of the Royal Australian Air Force".

"Changes in the strategic environment since the late 1990s have resulted in increasing use of WPA facilities for the testing and evaluation of weapons systems. The range is now, in parts, in near constant use," Defence Force says on its website.

However, the decision to block the sale led to accusations that Mr Turnbull was failing to comply with his claim that he wanted Australia to be open for business.

The manager of S. Kidman & Co, Mr Greg Campbell, said he was "surprised" by the effective rejection of the impending sale.

The government said yesterday that the foreign bidders had withdrawn their applications to the Foreign Investment Review Board following its decision to block their bids.

The board, a government agency, must approve large sales of property and farmland.

From March, the value of farmland which triggers a review was cut from A$252 million to A$15 million, though five countries have higher limits, including Singapore, whose threshold is A$50 million.

A version of this article appeared in the print edition of The Straits Times on November 20, 2015, with the headline 'Aussie govt blocks sale of cattle station'. Print Edition | Subscribe