SYDNEY, June 24 (Reuters) - Australia's remote Christmas Island in the Indian Ocean is set to be turned into a space launch center with Australia announcing on Sunday it would fund U.S.$52 million toward the satellite spaceport.
The project, costing a total of about eight times the government's contribution and headed up by Australian consortium Asia Pacific Space Centre (APSC), will target the growing Asian satellite market. The first launch is expected in late 2003.
"It will establish Australia as a significant player in the satellite launch industry that is currently dominated by the United States, Russia, the European Union and Canada," Australian Science Minister Nick Minchin said in announcing the funding.
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Minchin said demand for satellite launches in the next 10 years is estimated to be worth up to U.S.$20.8 billion and Australia can expect between 10 and 20 percent of the market.
He said the spaceport would target the geostationary launch market, offering capabilities for low Earth orbits, and for use in test flights of satellites and space communications.
"This could see Australian launch operations contributing up to A$2.5 billion to the balance of payments in their first 10 years of operations," Minchin said in a statement.
Christmas Island, a speck of land of about 135 square km (52 sq miles) that lies off Australia's northwest coast, only makes news headlines when illegal immigrants arrive in rickety boats from Asia.
But its proximity to the equator -- it lies between 10 degrees 30 minutes South and 105 degrees 35 minutes East -- makes it an ideal satellite launch site, with heavier payloads being sent into orbit using less fuel.
"APSC will offer reliable space launch services that are highly competitive in price, commercial terms and conditions and technical capability," said APSC managing director David Kwon.
Minchin said the spaceport would use a Russian launch vehicle based on the reliable Soyuz rockets.
Pact with Russian agency
Russian launch technology would be protected in Australia under an agreement currently being negotiated with Moscow.
The agreement would set strict conditions for control and use of launch technologies under the Missile Technology Control Regime, set up to prevent proliferation of ballistic missiles.
In May, Australia signed a deal with the Russian aviation and space agency Rosaviakosmos to establish a formal framework for space co-operation. Under the agreement Russia will supply Soviet rockets and launch expertise while Australia will provide infrastructure and opportunities to launch commercial satellites.
The Australian government has been competing against Brazil to get a footing in the expanding global space launch industry.
Previous attempts by Australia to establish a satellite launch facility on its tropical Cape York Peninsula on the country's northeast failed in the 1990s.
Christmas Island is a summit of an undersea mountain covered by rainforest, with a peak 360 metres (1,181 feet) above sea level, and a coastline of towering sea cliffs.
The island has been mined for its large phosphate deposits, which are now running out, since Britain claimed it in 1888. In 1958 Christmas Island became an Australian territory.
During the 1990s Christmas Island residents, which total around 1,200, have tried to develop fishing and tourism industries, with an annual march of thousands of red crabs across the island a spectacular tourist drawcard.
Minchin said the government funding would extend the island's airport to handle wide-bodied aircraft, create an all-weather port and contribute to spacesport infrastructure, such as ground station facilities for telemetry and tracking.
The spaceport would also generate up to 400 jobs in the construction phase and up to 550 jobs when fully operational.
Minchin said that as part of the deal, APSC had committed a minimum U.S.$7.8 million over the first five years of launches towards the establishment of a Space Research Centre with Australian universities.