The Albanese government appears to have come good on its election promise to eject Chinese-owned company Landbridge from the Port of Darwin. Marcus Reubenstein reports.
While Defence Minister Richard Marles met with his US counterpart, Signal aficionado Pete Hegseth, and both warning of Chinese military buildup, the Chinese-owned Port of Darwin is up for sale. Not by its owners, but by the Australian Government.
Despite no evidence that the current ownership of Darwin Port presents any security risk to Australia, Labor wanted to stay out in front of the LNP opposition on national security during the election. Thus, the bipartisan promise to get rid of the port’s Chinese owner, Landbridge.
Before Landbridge secured its 99-year lease in 2015, the sale was subject to, and cleared by, a number of government and Defence Department reviews Then Defence chief, Air Chief Marshal Mark Binksin told a Senate committee, “If [ship] movements are the issue, I can sit at the fish and chip shop on the wharf at the moment in Darwin and watch ships come and go, regardless of who owns it”.
The then-secretary of the Department of Defence, Dennis Richardson, told the same committee it was “amateur hour” to suggest Chinese spies could use the port for their own purposes.
Now, amateur hour is again upon us in the government’s mixed messaging on just who will, or will not, buy the port.
Politics trumps national interest. Labor wedged over Port of Darwin farce
America to the rescue?
Last week, The Australian reported ($) that the frontrunner to buy the port is New York-based private equity firm, Cerberus Capital Management. Ironically, it was stated it’s “preparing a formal proposal to buy the port from Landbridge Group’s billionaire owner Ye Cheng”. Ironic because the media and politicians are running around claiming the Chinese Communist Party (CCP) controls Landbridge.
The Australian reported Cerberus will make an offer slightly higher than the $506 million Landbridge paid 10 years ago; it added a “source” says Landbridge will consider offers closer to $1 billion.
Lost in all the China alarmism is the simple fact that if the port is a potentially “strategic” asset for the CCP, why would its Chinese owners be touting a sale price clearly on favourable commercial terms?
Another thing lost in much of the Port of Darwin noise is that Cerberus was co-founded by Steve Feinberg, who is now the US Deputy Secretary of Defence. So, the port is potentially going to another foreign owner with links to the military.
In November 2024, it was announced that Cerberus had pumped $100 million into the Cockatoo Island facility off Australia’s north west shelf, supporting the oil and gas industry (mostly controlled by foreign entities), as well as providing logistical and surveillance support to Australia’s military and Border Force. The US private equity outfit has form when it comes to grabbing chunks of our strategic assets.
An Australian owner?
Asked if he would support a Cerberus bid to buy the port, Prime Minister Anthony Albanese stated position is, “We’ve said we want to see it in Australian hands. I notice this speculation, which is there, but we’ll examine the process. We’re determined to make sure it’s in the national interest for it to be in Australian hands.
“But if there are other proposals, we’ll work those through. But we’ll work those through on a commercial basis.” Add yet another irony, the flagging port was sold to Landbridge a decade ago, on a commercial basis.
In April, the AFR reported ($) that the port is “not going to sell like hotcakes” suggesting a price north of $800 million with perhaps only one or two bidders.
The federal government has expressed its preference to see an Australian superannuation fund buy the port; however, as reported by the AFR, super funds “are not looking for complicated and relatively bite-sized investments… It is not a trophy asset – that’s why Landbridge ended up with it when it paid $506 million in November 2015.”
Watch the US: fears of Chinese investment in Australia overblown
While Albanese says Australian ownership is his preferred outcome, Defence Minister Richard Marles refuses to rule US ownership out.
On the sidelines of last week’s Shangri-La Dialogue, a meeting of defence ministers in Singapore, he was asked by Bloomberg Television whether there had been any pressure from the Trump Administration to eject Landbridge. When asked if it’s important for it to be owned by “An Australian company or a foreign company with a footprint in Australia?” Marles said, “We don’t think it is appropriate that [a] piece of infrastructure was being controlled, was in the hands of a Chinese publicly owned entity, and a Chinese government-controlled entity… and we are working through to get a better resolution to the ownership structure of the Port of Darwin.”
There is nothing unequivocal about Marles’s answer; he was directly asked about foreign ownership, and he refused to rule it out. In fact, if one digs deeper into his response, it quite specifically does not indicate a preference that the new owner be Australian.
Marles met up with US Secretary of Defence Pete Hegseth in Singapore, endorsing the position of his US counterpart, who stated Australia should lift its defence spending to 3.5% of GDP. In a speech to the conference, Hegseth blustered that the US stands ready to “fight and win decisively” against China in any war with Taiwan – another pronouncement endorsed by Marles.
In a somewhat surprising rebuke – after all, Marles is also Deputy PM – Albanese immediately shot down any pandering to Hegseth, telling a news conference last Sunday, “What we’ll do is we’ll determine our defence policy.”
What’s next?
While Marles, Albanese and Cerberus are grabbing the headlines, one question is whether Landbridge is going to take all of this lying down?
There’s been no suggestion or evidence of Landbridge breaching the terms of its 99-year lease. In simple commercial terms, the Northern Territory government sold the lease to Landbridge with the approval of the Federal Government. National security issues aside, this is an agreement where the government simply changed its mind.
There is no guarantee that a judge will not be called upon to untangle part, if not all, of the current mess. No doubt a small army of lawyers are already advising government on how to eject Landbridge; despite who eventually ends up owning the port, this is going to end up costing taxpayers millions in legal fees and perhaps tens, if not hundreds, of millions in compensation paid to an operator which has done nothing wrong.
Marcus Reubenstein is an independent journalist with more than twenty-five years of media experience. He spent five years at Seven News in Sydney and seven years at SBS World News where he was a senior correspondent. As a print journalist he has contributed business stories to most of Australia’s major news outlets. Internationally he has worked on assignments for CNN, Eurosport and the Olympic Games Broadcasting Service. He is the founder and editor of Asian business new website, APAC Business Review..