CU River's expansion intentions have raised concerns for Australia's defence department because the Woomera area is highly valued by Australia and allies such as the United States for top secret weapons testing. The Age, The Sydney Morning Herald and Nine News can reveal a source familiar with the operations of CU River and JiuJiang recently raised specific national security concerns with Defence and the Home Affairs Department. CU River's expansion plans are well known and developed. They include the building of a new shipping terminal at Port Augusta to carry as much as 15 million tonnes of iron ore to China each year starting in 2026. Senator Reynolds made it clear in parliament last month that Defence would not approve any further permit requests from CU River to access its exploration tenements or establish further mines at Woomera. But on Tuesday, she raised the stakes even higher, saying the government had the power to revoke existing permits for mines on the Woomera range if national security concerns warranted it.

"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," Senator Reynolds said. Loading Cancelling a company's right to access its own mine or explore tenements could raise sovereign risk concerns - an issue the government is aware of - but the view of Prime Minister Scott Morrison's cabinet is understood to be of the view that national security outweighs commercial issues. Influential Centre Alliance Senator Rex Patrick has suggested that any attempt to halt China-back CU River expansion plans for the mine may trigger a push for Australia to compensate the company and its Chinese backers. "It's hard to see how that security problem can be fixed without the Australian Government taking the mine over," Senator Patrick said. "The Australian constitution requires that the government can only acquire property on 'just terms', so taxpayers will likely pay the price to fix a major national security failure.

"The Chinese will be laughing all the way to the bank". Senator Reynolds' office would not be drawn on the prospect of any compensation, noting that no fresh permit requests from CU River had been lodged. It's very hard to understand how foreign controlled mining interests were allowed to set up next door to our most secret weapons testing range. Senator Rex Patrick Australia's intelligence agencies have recently warned that the Woomera site was of high interest to foreign intelligence services and that any mining activities in the area should be controlled by Australian-owned entities. Senator Patrick, who has pursued the Chinese interest in the Woomera mine through parliament and Freedom of Information, has called for an inquiry into how Chinese-interests were allowed to invest in the iron ore project back in 2010.

Documents released under Freedom of Information reveal Defence has raised strong concerns since 2010 about China-backed companies' interest in developing the Cairn Hill iron ore site. The documents show Defence raised "national security grounds" as part of a Foreign Investment Review Board assessment of a partial buyout of Cairn Hill's former owner, ASX-listed miner IMX Resources by other Chinese interests. Centre Alliance senator Rex Patrick. Credit:Alex Ellinghausen CU River Mining Australia bought mining tenements at Woomera from IMX Resources in 2014, prompting another Foreign Investments Review Board review. CU River was issued with a permit to access the site despite Defence's strong concerns. Senator Patrick said previous decisions by Labor and Coalition defence ministers to allow Chinese-backed mining operations to be carried out on the Woomera range were perplexing and amounted to "a significant security failure".

"Investment in South Australia's mining sector is great, and much desired, but no one should give false hope to the people of places like Coober Pedy or Port Augusta with a project that is so problematic on national security grounds," he said. Loading "It is very hard to understand how foreign controlled mining interests were allowed to set up operations next door to our most secret weapons testing range. China would never allow an Australian miner to set up operations at one of their military facilities. Although registered in Australia, CU River has always been strongly linked to China, the birthplace of several of its past or present directors. The Age and The Sydney Morning Herald have this year reported how Chinese steel giant JiuJiang has pledged as much as $800 million in financial support to CU River.