Latest news with #Landbridge
Bloomberg
2 days ago
- Business
- Bloomberg
Darwin Port Tussle Highlights China-US Tension
Good morning, it's Angus here in Sydney. Here's what you need to know as we round out the week. Today's must-reads (listens): • Our podcast on the Port of Darwin showdown • How many RBA rate cuts? • Natural gas sector grapples with red tape In 2015, Chinese company Landbridge was awarded a 99-year lease over the Port of Darwin. Now, Australia wants to take it back and put it into local hands. This week on the Bloomberg Australia podcast, Rebecca Jones speaks to government reporter Ben Westcott and senior editor Chelsea Mes about why Beijing is speaking out against that decision, and what role the US might play.
Business Times
3 days ago
- Business
- Business Times
Australia aims to avoid Panama repeat in China port showdown
[CANBERRA] Prime Minister Anthony Albanese is confronting a fresh diplomatic dilemma with China: How to fulfil a pledge to regain control of a strategic port without jeopardising improved relations with his country's largest trading partner. Ahead of an election earlier this month, Albanese promised to return to Australian control the Port of Darwin from Chinese company Landbridge Group. It was awarded a 99-year lease in 2015 by the Northern Territory government in a move that sparked criticism from an array of politicians in Australia and in the US, which uses a nearby military training facility. China is Australia's biggest trading partner by far and previously expressed anger over pressure from the Trump administration concerning the Panama Canal, which resulted in a potential sale by a Hong Kong-based conglomerate of its two Panama port operations – a deal Beijing has said it will review. Albanese potentially faces a similar backlash from the Chinese government if Beijing perceives it's being treated unfairly at the Port of Darwin. 'The key is whether it's a commercial or ostensibly a commercial transaction or not,' said Richard McGregor, a senior fellow at Sydney-based Lowy Institute, who serves on the board of a government body advising on relations with China. A simple buyout of Landbridge by an Australian company would be significantly less controversial than a sale to a US business or an attempt to cancel the lease and nationalise it, he said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Speaking on Wednesday, Albanese appeared to pour some cold water on the idea of an acquisition by a US company while restating his desire to get the port back under Australian control. 'It's in the national interest for it to be in Australian hands,' Albanese said at a press conference in Darwin. 'But if there are other proposals, we'll work those through. But we'll work those through on a commercial basis.' Terry O'Connor, a non-executive director for Landbridge in Australia, said on Wednesday there's been interest among investors in Australia and abroad on whether the port is for sale. They have also received calls from international investors, some of whom are in talks with the local administration, about whether the national government's plan to acquire the port is real, he said. Like many countries in the Asia-Pacific region, Australia is caught in a bind. The US is the largest single investor in Australia and the country's main security ally, but China is by far its biggest export market. High stakes China's government would like for its firms to be able to invest more into Australia, especially in the minerals sector, but Canberra has blocked a series of investment proposals since the two signed a free-trade agreement more than a decade ago. That raises the stakes for how Albanese manages the port dispute. Bilateral relations collapsed during the pandemic, when China imposed tariffs and trade barriers on Australian goods, but have gradually improved since Albanese first took power in 2022. Xiao Qian, China's ambassador to Australia, has warned Canberra to proceed cautiously in its handling of the lease, which he said was awarded to Landbridge 'through an open and transparent bidding process'. He made the point of personally visiting Darwin in the past week to press Beijing's request for Landbridge to be treated fairly. While Landbridge has been reported to be having financial difficulties, Chinese state media also cautioned against forcing Landbridge to give up the lease. A Global Times editorial this week said the Australian government should 'prioritise the broader picture, uphold the spirit of contract, return to the rule of law, and stop distorting economic cooperation with political bias.' The port is Australia's northernmost maritime facility, positioned close to South-east Asia. During the election campaign, Albanese raised the possibility of nationalising the facility in case a private owner couldn't be found. US private equity company Cerberus held an initial meeting with the Port of Darwin to discuss taking over the lease, while other Australian entities including large pension funds are also running a ruler over the numbers. 'Far from ideal' Since 2001, Chinese firms have increasingly invested in overseas ports. That's often been portrayed as part of President Xi Jinping's 'Belt and Road Initiative' to build up trade links between China and the rest of the world, according to Zongyuan Zoe Liu at the Council at Foreign Relations, who tracks such investments. Some of those investments have become controversial or been criticised as a vehicle for greater Chinese influence, although some, such as the purchase of Piraeus Port in Greece by Chinese shipping giant Cosco Shipping Holdings, can be seen as a success, she said in a recent interview. While the Port of Darwin has not attracted the same level of attention from Washington as the Panama Canal, that does not mean that the US is not watching closely 'For many of our allies and partners, the current status quo is far from ideal,' said Luke Gosling, a military veteran and lawmaker for Darwin in Albanese's Labor government. 'That has fed into obviously our decision-making around making that commitment that the Port of Darwin come back into Australian hands.' BLOOMBERG
Bloomberg
3 days ago
- Business
- Bloomberg
The Global Tussle For The Port of Darwin
On this week's Australia Podcast: Host Rebecca Jones speaks to government reporter Ben Westcott and senior editor Chelsea Mes about the strategic significance of the Port of Darwin. Never miss an episode. Follow The Bloomberg Australia Podcast today. In 2015, Chinese company Landbridge was awarded a 99-year lease over the Port of Darwin. Now, Australia wants to take it back and put it into local hands. This week on the podcast, Rebecca Jones speaks to Ben Westcott and Chelsea Mes about why Beijing is speaking out against that decision, and what role the US might play.
The Independent
3 days ago
- Business
- The Independent
The Australian port at the centre of a tug-of-war between Beijing and Canberra
China and Australia are sparring for control of an Australian port as concern grows over Beijing's exponentially growing influence in the Indo-Pacific. China is vehemently opposing Australia's plan to take back the controversial decades-long lease of the port in the northern city of Darwin. The row deepened this week after reports suggested that American private equity firm Cerberus had shown interest to acquire the lease. The ruling coalition parties of Australia had vowed during the recent election campaign to revoke Landbridge's lease for the port. Landbridge, a private multinational group of companies with interests in ports and logistics, is headquartered in China. Last month, prime minister Anthony Albanese declared that the port should be 'in Australian hands' and vowed to regain control of the "strategic asset". He even reportedly suggested a willingness to nationalise the port if a new buyer could not be found. The port of Darwin, located strategically opposite the Darwin defence base, is one of Australia's crucial gateways for trade, connecting the nation to the Asia-Pacific region. The deepwater port reportedly records a throughput of 4.5 million cargoes and is essential as a supply centre for Australia's oil and gas projects. The Northern Territory state government sold the port's 99-year lease to Landbridge for £374m in 2015, a move criticised by then US president Barack Obama. Around 2,000 US marines conduct exercises for six months of the year in Darwin and air bases in the area are being expanded to host American bombers. The Northern Territory awarded the contract to Landbridge a few years after the US posted the first of a rotating group of marines in Darwin. Australia has lately been building up its northern military bases after signing a security partnership with the US and the UK. The Chinese leaseholder has been adamant in refusing to give up control of the port and Beijing has called the American bid to take over as 'ethically questionable". China's ambassador to Australia, Xiao Qian, has urged Canberra to honour its contract with Landbridge, pointing out that the company has made "significant investments" in the facility. 'Such an enterprise and project deserves encouragement, not punishment,' the ambassador said in a statement on Sunday. 'It's ethically questionable to lease the port when it was unprofitable and then seek to reclaim it once it becomes profitable.' The port of Darwin has become the latest sticking point in relations between Australia and China which have dramatically improved in the three years since Mr Albanese was first elected in May 2022. The nations have been at loggerheads over China's exertion of dominance in the waters between them, not least Beijing's live-fire exercises off Australia's heavily populated east coast earlier this year. The Chinese foreign ministry said this week that Landbridge had obtained the lease on the open market and so its legitimate rights and interests should be fully protected. The Communist Party of China mouthpiece Global Times warned in an editorial that if Australia forcibly took away the lease from Landbridge, it would create 'major enduring pitfalls for the country'. It claimed that Landbridge had invested about £40 in upgrading port facilities, resulting in a 95.7 per cent increase in the total gross tonnage of arriving vessels. In the meantime, Cerberus Capital Management, founded by billionaire investor Stephen Feinberg who was appointed US deputy secretary of defence in March, is preparing a formal proposal to buy the port, The Australian reported. Cerberus has even partnered with Australian freight company Toll to ease concerns about foreign ownership of the strategic port, according to The Australian Financial Review. If the company were to succeed in securing the lease for the port, it would be a major strategic victory for Donald Trump 's administration amid the ongoing trade war with China over high tariffs. The Albanese government said it was running a separate process to identify potential domestic buyers and investors for the port. "There have been numerous meetings with potential proponents for the Port of Darwin," federal lawmaker Luke Gosling, the special envoy for defence and Northern Australia, told Reuters. "We'll work through that process methodically.' The Northern Territory's treasurer, Bill Yan, told the parliament last week that the port must be ready for "heavier defence logistics, the surge in critical mineral exports and the growing LNG cargoes", and operate in "Australian interests". Australian Strategic Policy Institute director of national security programs, John Coyne, said Landbridge agreeing to sell the lease for profit would be an easier pathway for the Albanese government than if it were compelled to intervene to break the lease on national security grounds, which would draw a backlash from China. "Beijing would not be happy with a divestment of an asset like this," he said, adding that it could discourage other foreign investment in Australia. Landbridge insisted that it had no intention of ending its lease. 'Landbridge has not yet received any offers or engagement from the government at any level,' non-executive director Terry O'Connor said. 'It is business as usual at Darwin port as we continue to focus on the growth of our operations.' Darwin is the second major port to get caught in the US-China trade war. China has been trying to block Hong Kong conglomerate CK Hutchison from selling its ports on the Panama Canal to US investment firm BlackRock for £14bn. The Wall Street Journal, citing people familiar with the matter, reported last month that the MSC shipping company, a part of the BlackRock consortium, had held discussions on moving ahead with the bulk of the deal while disputes over the two ports were resolved. Tycoon Li Ka Shing announced in March that CK Hutchison would sell its 80 per cent holding in the ports business covering 43 ports in 23 countries.
Epoch Times
4 days ago
- Business
- Epoch Times
Trump-Linked US Firm Circles Port of Darwin Amid Calls to End 99-Year Chinese Lease
U.S. investment firm Cerberus Capital Management, which is linked to the Trump administration, has shown interest in taking over the Chinese-leased Port of Darwin. Before the federal election on May 3, both the Albanese government and the federal opposition pledged to take back the port from the Beijing-linked company, Landbridge. 'We've been informally engaging with potential buyers for some time,' Prime Minister Anthony Albanese On May 28, Terry O'Connor, Landbridge's non-executive director for Australia, confirmed that a representative from Cerberus had met with Darwin Port's management, but had not made an offer for the asset. 'In that meeting [Cerberus] expressed interest about potential investment in the port, given that the company had a fairly high investment portfolio around the world,' he told the ABC. 'There's certainly been no prices negotiated [for the port], no prices even discussed or raised. 'We would see Cerberus's interest as the same level of interest as we've received from multiple other companies who have talked to the port [management] over the past couple of months.' In 2015, the Northern Territory's then-Country Liberal Party government leased the port to Landbridge on a 99 year deal valued at $506 million. The agreement raised national security concerns, including from former U.S. President Barack Obama, prompting the Turnbull Liberal government to strengthen asset sale regulations through the Foreign Investment Review Board. Who is Cerberus? Known for its expertise in distressed asset acquisitions, Cerberus Capital Management manages approximately $65 billion in assets, spanning sectors such as military, automotive, real estate, and aviation. In March, the U.S. Senate In this capacity, Feinberg will serve as the Department of Defense's chief operating officer, overseeing day-to-day management and executing the Secretary of Defense's strategic priorities. Xiao Qian, the Chinese Communist Party (CCP) Ambassador to Australia, issued a strong rebuke of the Australian government's plan to reclaim the port lease. 'It is ethically questionable to lease the port when it was unprofitable and then seek to reclaim it once it becomes profitable,' he said in a statement published on his website on May 25. This statement came days after his trip to Darwin, where he visited the port, met with staff at Landbridge, and took questions from both Chinese and Australian media. The Epoch Times has reached out to Landbridge, the Prime Minister's Office, and the Northern Territory government for comment.
