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A deal by a Chinese state-owned company to buy out a $9.7 billion port and rail project in Western Australia's Mid West has ignited concerns about Beijing's leverage over major state development projects.
And while the state government has given a lukewarm welcome to an announcement by Sinosteel Corporation they purchased Japanese giant Mitsubishi's stake in the Oakajee port and rail project last month, former premier Colin Barnett said it was good news for the Mid West.
Oakajee has long been touted as opening up a new iron ore province in WA.CREDIT:IAN WALDIE
The acquisition, which would have been approved by the Foreign Investment Review Board, was announced in October and means the long-stalled project to establish a new iron ore export centre could be revived.
Oakajee, an area about 400 kilometres north of Perth, is the locality mooted for a port to service the region’s iron ore industry.
Attempts to develop Oakajee and unlock an iron ore province to rival the Pilbara region have been under way for 46 years.
Oakajee was first floated as a potential port location in the 1960s but it wasn't until Mr Barnett tendered the rights to develop the spot in 2009 that it hit national prominence.
Mitsubishi mothballed the project when iron ore prices began dropping and it started looking for buyers in 2017.
Being the major lease holder in the region Sinosteel's purchase, the sum of which has not been disclosed, includes the intellectual property behind Oakajee port and rail and the Jack Hill iron ore resource.
The purchase could potentially connect Sinosteel's Mid West iron ore resources to the rest of the world but national security analysts are raising concerns about the size of the project and the leverage it may give to China's communist regime.
Australian Strategic Policy Institute executive director Peter Jennings said it was increasingly risky to "put too much of Australia's current or future critical infrastructure into the hands of the Chinese companies, particularly state-owned companies".
"The reason for that, frankly, just look at the current state of Chinese politics and the fact that what is emerging is a highly nationalistic, quite aggressive one-party state that seems to be pursuing a whole bunch of strategic objectives that don't align with Australia's interests," Mr Jennings said.
"For me, I think you then have to say, well if that's the reality of China, how wise is it to allow Australia to deepen an already deep dependency on China for economic and investment connections?
"My own sense is that we're way past the point where this should be something that's viewed primarily as just a commercial deal, but that we've got to think about the national security consequences."
Mr Jennings said the Chinese government had been developing an unhealthy leverage over Australian policy makers because of the depth of the economic relationship between the countries.
This article first appeared on www.watoday.com.au
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