In October, the private Hong Kong-based entity was announced as the new owner of abandoned iron ore operations on Cockatoo Island in WA's Kimberley region, next to the Yampi Sound Defence Training Area.

Cockatoo Island is roughly 2000 kilometres from Perth and boasts an airstrip which was used to service past mining projects as well as a resort built by infamous businessman Alan Bond during the 1980s.

According to Western Australia's Department of Mines registry the new lease approved last year for 'Cockatoo Island Mining Pty Ltd' will expire in 2032.

Cockatoo Island Mining's directors say they want to "establish a world class and responsible mining operation, within an area that has demonstrated high-grade iron ore deposits," after the previous owner went into administration in 2015.

Company documents submitted to the Australian Security and Investments Commission confirm directors of the Cockatoo Island Mining venture reside in Australia, India, Hong Kong as well as mainland China.

It has been confirmed the 2020 takeover was examined by the Foreign Investment Review Board (FIRB) but the deal has still alarmed some federal government figures who believe it is similar to the controversial lease of Darwin Port to a Chinese state-owned company.

Liberal Senator Concetta Fierravanti-Wells, who previously served as Minister for International Development and the Pacific, has said she is alarmed at the deal.

"The Cockatoo Island 'transaction' is yet another example of why acquisition of strategic assets from governments in Australia by 'private companies' with links to Beijing should come within the scope of both FIRB and foreign relation legislation."

"This 'transaction' is another glaring example of our defective federal laws," the NSW Senator argues.

"China's company and national security laws require that the Chinese Communist Party 'control', not only China's state-owned entities, but also Chinese 'private companies'."

Last year the Morrison government passed new foreign relations laws which allow the Commonwealth the power to veto agreements with foreign countries struck by state and local governments, but not deals done with private companies.

One senior national security official who spoke to the ABC on the condition of anonymity, highlighted that as well as being next to a military training area Cockatoo Island was also close to the strategically important north-west shelf gas fields.

Defence has confirmed that over the past twelve months the Yampi Sound Training Area was used for a total of 19 days by both Regional Force Surveillance units and Special Forces units.

In a statement the Defence Department insisted appropriate security arrangements were in place at the remote training area which military figures believe will become increasingly important for future amphibious exercises.

"Defence has a multi-layered approach to managing security across its estate, which includes addressing security risks through protective security, contractual arrangements, and legislative protections," a spokesperson told the ABC.

"Yampi Sound Training Area is predominantly used for land and vehicle based training activities and has a range of security mechanisms in place".

"The Government does not comment on the foreign investment screening arrangements as they apply, or may apply, to particular cases," the spokesperson added.

Story By | Andrew Greene