The heavy hand of Canberra's military paranoia or Labor Party strategists showed their hand Friday when Canberra said the new Prominent Hill copper-gold mine could not be included in the approval process for China Minmetals Non-Ferrous Metals Co Ltd's proposed takeover of OZ Minerals Ltd (ASX: OZL).The Australian Government may well have to re-think what constitutes a prohibited area following the statement Friday by Federal Treasurer Wayne Swan about the need to exclude Prominent Hill from the takeover deal.Swan's statement said that under the Foreign Acquisition and Takeover Act 1975, all foreign investment applications are examined against Australia's national interest.Because Prominent Hill falls within the Woomera Prohibited Area in South Australia (that includes a weapons testing range) this area of far northern South Australia was deemed unique and sensitive contribution to Australia's national defence.The problem with this is that through all the exploration, mine approval and licencing processes no such issue has not raised. If you tried to walk from Prominent Hill to the old Woomera rocket range or any of the defence facilities in that area - with just a water bag - you would perish unless found. The distance is enormous. The last time Woomera cropped up in headlines was when a facility was built their to house illegal immigrants.OZ Minerals went into a trading halt awaiting a release on the Foreign Investment Review Board (FIRB) situation which had created the flight or more Australian investors, concerned about the fact that Canberra's decision to extend the time of review would breach the deadline set by bankers for approval of FIRB takeover conditions.The Government has determined that Minmetals' proposal for OZ Minerals cannot be approved if it includes Prominent Hill. I have informed Minmetals of this decision, Swan said.Discussions between the Foreign Investment Review Board and Minmetals are continuing in relation to OZ Minerals' other businesses and assets, and the Government is willing to consider alternative proposals relating to those other assets and businesses.He said the Government issued an interim order on this application on March 23.The brief response from OZ Minerals' Managing Director, Andrew Michelmore, was that it was now in discussion with Minmetals regarding changes to the proposed deal.The reasoning of Canberra may surprise some observers but some political commentators and this writer may consider that the national security issue is perhaps an screen to veil the nervousness that can develop in a Labor Government over foreign takeovers, so it will be interesting to see what crops in any potential barriers to the Chinalco deal on Rio Tinto.