Issue
The 99-year Port of Darwin lease to a Chinese subsidiary in
2015 has proven to be one of the most contentious decisions in recent Australian
foreign policy. Despite government reviews finding no national security reasons
to terminate the agreement, intensifying global and regional strategic
environments have renewed debate. At the 2025 federal election, both the
government and the Opposition advocated discontinuing the lease.
Key points
- Landbridge
Group has portrayed Darwin Port as part of China’s global Belt and Road
Initiative.
- Security
assessments of the lease arrangements have found no national security concerns.
- A
government review following the 2022 federal election concluded it was not
necessary to vary or cancel the lease.
- During
the 2025 federal election campaign, both major parties promised to return the
port to Australian control.
- Chinese
Government officials have publicly opposed any moves to terminate the
Landbridge lease.
Context
The Northern
Territory (NT) Country Liberal Party returned
to power in 2012 with a policy to consider privatisations. In early
2014 it hired Flagstaff
Partners, which reportedly advised that a long-term lease would be the best
option to expand and develop the Port of Darwin.
Also in 2014, the Chinese company Shandong
Landbridge Group established an Australian presence when its subsidiary Landbridge
Energy Australia purchased Queensland coal seam gas operator Westside Corporation. Landbridge
Group’s chairman, YE Cheng, became a member
of the 12th Chinese People’s Political Consultative Conference Committee in
2013 and participated in its National
Committee sessions in March 2016 and 2018. Other state linkages to Landbridge are outlined by the Australian Strategic Policy Institute.
The NT Government introduced legislation
to privatise the Port of Darwin in November 2014. A Select
Committee investigated the issue and published
its report in April 2015, with the Bill
passing shortly after. Landbridge was one of 33 companies that registered
interest in leasing the port. In July, the NT
Government advised Landbridge that it had been shortlisted and in October, Landbridge
was announced as the successful bidder, having agreed to pay $506 million.
However, the NT Government would retain a 20%
share until Landbridge found an Australian buyer to purchase it. According
to the Chinese
Minister for Resources, the deal sent a message to Chinese companies that
the Northern Territory is a place to do business.
Expanding connections
Following the Port of Darwin lease, the NT Government’s
enthusiasm for links with China continued. This included signing an Agreement
on Economic and Trade Cooperation and Exchange with Rizhao City and an MOU
of Mutual Respect between Rizhao City and Darwin in mid-2016. Later that
year, the NT Government and Landbridge jointly announced development
of an Industry and Logistics Park within the East Arm Logistics Precinct in
Darwin. In 2018, Landbridge also received planning approval for a $200 million luxury hotel
and residential complex on the Darwin foreshore and announced its intention to double
the size of Darwin Port.
In supporting such connections NT Chief Minister Andrew
Giles stated, ‘The Landbridge investment in Darwin is consistent with
China’s Maritime Silk Road Strategy and consolidates Darwin’s position as a
natural gateway between Australia and China’. Darwin’s role as a ‘maritime silk
road’ node was further underlined when Landbridge Group acquired Panama’s
largest port, Margarita Island, also in 2016. Landbridge
Group declared:
Landbridge’s three ports – Landbridge
Port in Asia, Darwin Port in Oceania, and Margarita Port in the Americas – are
interconnected to form an important fulcrum of maritime cooperation for the
Belt and Road Initiative, and they will actively build a “maritime economic
corridor” so that the achievements of the Belt and Road Initiative can benefit
a wider regional space.
Landbridge eventually lost its Panama port when the Panama
Maritime Authority revoked
Landbridge’s concession in June 2021.
In September 2023, the Darwin
and Shenzhen ports entered into ‘a friendly non-binding MOU in order to
establish a closer relationship’. Then in December, the Chinese state-owned Hubei Port Group signed
a comprehensive strategic
cooperation framework agreement with Darwin Port and Westside Corporation
(both under Landbridge). The agreement centred on engagement in and promotion
of China’s Belt and Road Initiative.
Darwin Port has also been working with Australia’s largest rail
freight operator Aurizon on its land-bridging concept after Aurizon
announced exploratory plans in July 2023 to begin land-bridging services out of
Darwin to each capital city. As part of this, Aurizon was awarded a stevedoring
licence at Darwin Port in late 2023 and Aurizon
officials accompanied the Landbridge delegation to China when the agreement
between Darwin and Shenzhen ports was signed.
Landbridge also appears to have had other aspirations in
Australia. In September 2017, Landbridge
officials reportedly met with retiring South Australian (SA) Trade and
Investment Minister Martin Hamilton-Smith, SA Government officials and Chinese
diplomats to discuss a stake in SA’s Flinders Ports. Some experts expressed concerns
about any such moves, given the proximity of Flinders Ports to a major naval
shipbuilding precinct.
Continuing doubts
Landbridge consulted with Australia’s Department of Defence
prior to the lease decision, which did not express any concerns.
Some of the department’s
considerations were later published through FOI
requests. However, the US was not so sanguine. During the APEC
summit in November 2015, US President Barack Obama reportedly told Prime
Minister Turnbull of ‘dismay in Washington about the US not being consulted
about the decision’.
In February 2016, a Senate
inquiry’s interim report into the Australian foreign investment review
framework included a chapter on the Port
of Darwin lease. Later that year, Treasurer Scott Morrison announced Australia
was tightening foreign investment rules through the Foreign
Acquisitions and Takeovers Amendment (Government Infrastructure) Regulation
2016 (Cth).
In mid-2019, Deputy Chair of the Joint Standing Committee on
Foreign Affairs, Defence and Trade, Nick
Champion, become the first federal politician to call for the Chinese lease
of Darwin Port to be scrapped, and for the port to be brought back under
Australian control. The Labor Opposition reportedly
suggested this could be achieved through the Coalition’s proposed foreign
veto powers. The local
MP representing Darwin, Luke Gosling, supported subjecting
the lease to Australia’s Foreign Relations (State and Territory Arrangements)
Bill 2020, while Senator Fierravanti-Wells and former prime minister, Kevin Rudd, both advocated a review.
In September 2020, Defence Minister Linda Reynolds reasserted
that the lease was not a national security risk. However, continuing debate led the National
Security Committee to task the Defence Department in May
2021 with providing updated security advice on the lease arrangements. The Defence review, published in December
2021, found no national security reasons to reverse the lease, although the
Opposition requested a full briefing on its findings.
Upon Labor’s return to government following
the May 2022 election, Prime Minister Albanese announced a further review into the lease. The Department of the Prime Minister and Cabinet released
the review in October 2023 and concluded that it was ‘not necessary to vary or cancel the lease’ – advice the
government accepted.
What next?
During the 2025 federal
election campaign both the government and Opposition proposed ending foreign control of the Darwin Port. In
response, Landbridge claimed the lease was being treated as a ‘political football’, while Chinese officials warned against ‘overstretching the concept of national security’ and China’s
ambassador, XIAO Qian, has actively
opposed any premature termination of the lease.
Since the election, continued reports suggest the government
is exploring potential purchasers of the port lease, including US
company Cerberus. Other reports suggest that the government would prefer
an Australian buyer.