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A file photo taken on June 20, 2000, shows head ringer Gordon Warren of Anna Creek Station - the world's largest cattle station and the size of Belgium - keeping an eye out for cars as the Anna Creek Station spotter plane takes off on the Oodnadatta Track in outback South Australia.Image: AFP

Australia bans Chinese firms and other foreign investors from buying 'world's biggest private property', claiming it is contrary to national interest

Australia has blocked "foreign entities" from buying a cattle farming business that reputedly owns the world’s largest private land holding, ruling it was not in the national interest since part of the holdings are within a weapons testing area.

S. Kidman and Co Ltd includes 11 cattle farms covering 101,411 square kilometres across South Australia, Western Australia, the Northern Territory and Queensland - a combined area bigger than South Korea. It has been described as the largest private, non-monarchical, non-state landholding on Earth.

The company was set up in 1899 and rose to become Australia’s largest private property owner and Australia’s largest beef producer.

The property has been on the market since June, with Chinese investment companies Genius Link Group and Shanghai Pengxin reportedly in a bidding war to secure the sprawling pastoral empire for up to A$350 million (US$249 million).

But following concerns about valuable agricultural and mineral assets passing into foreign hands, Treasurer Scott Morrison said Thursday he would not authorise any sale to overseas investors.

“Consistent with the recommendation from the Foreign Investment Review Board, I have decided that the acquisition by foreign investors of S. Kidman and Co Limited would be contrary to the national interest and shall not be authorising the sale to proceed as currently proposed,” he said.

Kidman, founded in 1899, holds around 1.3 per cent of Australia’s total land area, and 2.5 per cent of the nation’s agricultural land. It 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 kilometres 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 per cent of its pastoral lease is located in the Woomera Prohibited Area (WPA) weapons testing range in South Australia.

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

“Australia welcomes foreign investment where it is consistent with our national interests,” he said.

However, the Woomera range “makes a unique and sensitive contribution to Australia’s national defence and it is not unusual for governments to restrict access to sensitive areas on national security grounds,” Morrison said.

The properties that form the S.Kidman holdings in Australia. Image: Beefcentral.com

All bidders have withdrawn their applications to the Foreign Investment Review Board to buy Kidman, Morrison said without identifying them, and it was “now a matter for the vendor to consider how they wish to proceed.”

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 A$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 A$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 per cent 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.

S. Kidman was not immediately available for comment.

The privately owned company had said in April it was looking to sell its cattle operations to raise cash for other businesses and investments.

The firm’s holdings were built up by the legendary pastoralist Sir Sidney Kidman. At one stage his properties covered 220,000 square kilometres.

His descendents who still own the firm are distantly related to the Australian actress Nicole Kidman.

Additional reporting by Reuters and Bloomberg

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