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Business

Australia moves to block Chinese land grab

Australia is seeking to prevent the country's biggest private land owner, S. Kidman & Co, from being sold to Chinese corporate bidders, saying the estate's size and location mean national security would be affected.

Australia's Treasurer Scott Morrison announced Thursday he would not authorize the sale of S. Kidman & Co Ltd to any overseas investor because it would be "contrary to national interest."

Australia's biggest private land owner is reportedly in a bidding war with Chinese companies Genius Link Group and Shanghai Pengxin to secure the sprawling pastoral empire for up to Aus$350 million ($249 million, 233 million euros).

"The parcel of land that we're talking about is some 1.3 percent of Australia's landmass, some 2.6 percent of the agricultural land in this country," Morrison said, adding: "We welcome foreign investment, but as treasurer I will always make sure that that investment is done in Australia's national interest."

Morrison also said his decision was based on the size and significance of Kidman's total portfolio along with national security issues around access to the Woomera Prohibited Area (WPA), which has been used to test nuclear bombs, launch satellites and track space missions.

Watch video 02:16

"Landgrabbing" a global phenomenon

World's biggest cattle estate

Kidman, founded in 1899, is a key source of beef for export to Japan, the United States and Southeast Asia. The company has 10 cattle stations, including properties across regional South Australia, Western Australia, the Northern Territory and Queensland covering 101,411 square kilometers (39,155 square miles) with a herd of 185,000 cattle.

One of them, Anna Creek, is the largest single property holding in Australia - bigger in size than Israel - and around 50 percent of its pastoral lease is located in the WPA weapons testing range in South Australia.

Kidman managing director Greg Campbell said he was surprised by the decision and was seeking clarity around the government's concerns and the deal's parameters.

"To be honest I didn't think this would be the outcome," he told national radio. "The Kidman family have been patient investors in the Australian cattle industry for 116 years and what we find this morning is that they're not at liberty to accept the best price for their business."

Foreign land-grabbing

Earlier this year, Australia announced plans to tighten scrutiny on overseas purchases of farmland, with any bid by a foreigner that brings their cumulative farmland investments to more than Aus$15 million to be screened by the national regulator. Previously, the Australian Foreign Investment Board only screened foreign investment for purchases of agricultural land over Aus$252 million.

The move followed warnings from politicians with rural constituencies against selling farming land to foreigners, including to Australia's top trading partner China, amid concerns about the nation's food security.

A study by the Rural Industries Research and Development Corporation in early 2012 showed 11 percent of farming land was foreign-owned, a level little changed in 30 years although there has been a spate of more recent purchases by overseas entities, notably from China.

uhe/nz (dpa, AFP)

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