Why is the government paying $50 million to an Australian mining company to settle a $7.4 million claim?


Posted January 02, 2019 06:19:56 A claim against a Chinese company that claims it was illegally drilled by the United States into the waters of a foreign country has reached $50million.

Key points:The US claims it illegally drilled a well into the disputed South China Sea in SeptemberThe Chinese company has said the claim is baselessThe claim has triggered an investigation into its activitiesThe company said it was unaware the well had been drilled into the sea until US officials contacted itThe US alleges the Chinese company was operating a wellhead in the disputed waters of the South China Seas in September when it drilled a 2.5-metre-deep well.

The company, the US Government and the Chinese Embassy in Canberra met on Tuesday and the two sides agreed to settle the claim in court.

The US has asked the Federal Court in Canberra to issue a temporary injunction, which would prevent the Chinese firm from drilling into the ocean in the South Asia waters of which the claim was made.

China has said it has never drilled a drill into the South Sea and has no intention to do so.

“We are satisfied that the claim made by the US is unfounded,” the Chinese Foreign Ministry said in a statement on Tuesday.

“It is up to the US to explain its factual basis for its claim.”

It said the case is “not about the right of the United Kingdom to exploit the resources of the sea”, but about the interests of peace and stability in the region.

The Foreign Ministry added: “We hope that the US can immediately stop the illegal activities and stop the US interference in our internal affairs.”

The claim came after the US Navy’s aircraft carrier USS Theodore Roosevelt and guided-missile cruiser USS Lake Champlain were sailing close to disputed waters in the waters surrounding the Spratly Islands.

The two ships were not part of the US fleet in the area.

On Sunday, the Chinese government confirmed that it had lodged a formal complaint with the Australian Federal Police about the US conduct.

The Chinese foreign ministry said the US had breached international law by illegally drilling the well, which was dug by the Chinese national ship and operated by the ship’s crew.

“The US illegally drilled the well into waters belonging to the Philippines,” the statement said.

“China lodged a complaint with international law and requested a legal remedy from the US.”

At this stage, the case will be investigated in a fair and impartial way, which will ensure that China and the Philippines do not suffer irreparable harm.

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