CHRISTMAS Island is on the verge of shrugging off its phosphate mining roots and embarking on a space-driven future.
Asia Pacific Space Centre has embarked on an ambitious $800 million program to develop a space port and Aurora satellite launch vehicle with the centre’s completion expected in late 2004.
The company has aligned itself with several Russian aerospace players to develop a launch system and technical equipment for the Christmas Island Space Port.
The space port will occupy 85 hectares of land on the island’s southern end.
Additional facilities are also being constructed on the northern side of the island, near the main settlement area, to support administration and accommodation of space centre personnel.
There has been speculation that the company will not be able to secure the funding to make the space port a reality. Indeed, work has stopped on the space port site but that has been blamed on the island’s wet season that draws construction works to a boggy halt each year.
Christmas Island airport’s runway will also be extended to make it Anotov compatible because much of the equipment required for the space port will brought to the island in the cargo holds of the giant Russian-built planes.
The airport extension will also make it possible for 747s to land on the island, enhancing the island’s tourism prospects.
However, one possible tourism attraction – the Christmas Island casino – is not likely to reopen because Federal Territories Minister Wilson Tuckey has said that he is not interested in renewing the defunct casino’s licence.
The Federal Government is also building a $219 million detention centre on the island to process up to 1,000 refugee applicants at a time.
The island’s economic mainstay, the phosphate mine operated by Phosphate Resources Limited has an estimated 15-year life span. It is seeking Government permission to access phosphate rock stockpiles in the rainforest on the 65 per cent of the island that has been declared national park.
Indeed, Phosphate Resources is ideally placed to capitalise on the developments on the island because it also has investments in Christmas Island-based stevedoring, fuel, earthworks and property businesses.
However, it appears a battle is raging for control of the company, which was created by Christmas Island workers to keep the phosphate mines operating.
Besides the opportunities offered by development on the island, Government compensation expected to come from resumption of land to make way for those developments is also at stake.
Phosphate Resources chairman and Asset Backed director Michael Perrott said the company was seeking up to $20 million in compensation from the Government for the detention centre land.
Federal Department of Transport assistant secretary for non-self governing territories and local governments, Andrew Wilson, said he could not reveal how much money the Government had set aside for the resumptions of land for the detention centre, plus the proposed space port and extensions to the island’s airport, but confirmed the Government was in an arbitration process with the miner over the detention centre land.
While this is happening, some Phosphate Resources shareholders say the company is under threat of a takeover from Como-based listed vehicle Asset Backed.
Phosphate Resources shareholders Gerry Pauley and Gordon Elkington took their concerns to the Takeovers Panel asking for it to stop the company’s $4.2 million rights issue that Asset Backed was partially underwriting.
Union of Christmas Island Workers secretary and Phosphate Resources shareholder Gordon Thomson is also trying to call a special meeting to spill the miner’s board.
Besides Mr Perrott, Asset Backed directors Antony Rigoll, Peter Huston and David Argyle are also Phosphate Resources board members.
Prior to a $4.2 million share buy back the miner conducted in June, Asset Backed had been able to acquire 19.9 per cent of the shares in Phosphate Resources by purchasing 544,450 shares from Mr Argyle.
It is understood that former Union of Christmas Island Workers president and current Phosphate Resources director, Lai Ah Hong, had placed about 700,000 shares with Mr Argyle in the late 1990s to protect the company from an Australia-based corporate raider.
In return for his 544,500 shares Mr Argyle received $840,000 and 3.8 million shares in Asset Backed.
By September Asset Backed’s stake in Phosphate Resources has risen to 26.7 per cent, largely due to it not taking part in the share buy back.
Asset Backed announced that it would underwrite $2.7 million of a planned $4.2 million Phosphate Resources rights issue in December and its stake in the miner could rise to nearly 40 per cent if that rights issue is not fully subscribed.
However, the Australian Securities and Investments Commission has put an interim stop order on the rights issue prospectus due to investigations being held by the Takeovers Panel.
Phosphate Resources shareholders were told the $4.2 million share buy back was a tax-effective way to deal with cash reserves and considerations the company had already received for giving up parts of its mining lease for the space port project.
In December the company announced the $4.2 million rights issue, saying the funds were needed principally to accelerate its mining operations to allow for the earlier than forecast surrender of mining lease parcels to the Government for the space port.
The share buy back came at a time when the company was telling the Government that it would incur higher costs to access phosphate resources on land that was being resumed
In a submission to the Federal Joint Stand Committee on Public Works in May, Phosphate Resources director Choon Foo Cheong said the company would struggle to fully access all of the phosphate resources in the areas the Government wished to resume in the time frame it was allowed.
Phosphate Resources managing director Willy Teo sent a submission to the committee in June saying that there were potentially 650,000 million tonnes of high grade phosphate – equivalent to one extra year of mine life – in the land earmarked for the northern end of the runway extension for the Christmas Island airport.
The miner posted a $2.6 million after profit in 2001-02.
