I believe that D is the answer:
A and B should say "Australian governments' granting of a concession"
C and E are wrong for the idiom reason that Spring2009 states
The decline in tourism "led to" the Australian government doing something, i.e., granting the bauxite concession, which is choice D. I think people go for C rather than D because (i) it's a trap answer to get us to skip over the "led to" in the question stem, and (ii) the last half of the sentence -- about the subsequent name of the company -- is more concise in choice C.