Global Politics Explainer

CWA # 1732
Global Politics Explainer
China and the Darwin Port:
Why does Australia want it back?

Aparna A Nair
25 June 2025
Photo Source: Google Map. Prepared by Santhiya M

In April, Australia’s Prime Minister, Anthony Albanese expressed the government's plan to buy back Darwin port from China-based Landbridge, a logistics company that is currently operating the port. Landbridge Industry Australia is a subsidiary of Shandong Landbridge Group, a China-based private multinational company with an interest in ports, logistics, and trade. In May, China’s Ambassador to Australia, Xiao Qian, criticised Australia’s government plan. On 22 June, the founder of Kimberley Marine Support Base and Onslow Marine Support Base located in Western Australia expressed interest in bidding for the port..

Where is the Darwin Port? What is its significance?
The Darwin Port is the northernmost maritime facility in Australia. It is located on the southern shore of the Timor Sea, near the US Marine deployments to the Northern Territory. The port’s proximity to the south of Indonesia and Southeast Asia makes it Australia’s northern gateway. 

In 2015, the Australian government recognised the port as crucial to the region’s future economic growth. Because of financial constraints, Australia’s government sold the port on a 99-year lease to Landbridge, a China-based logistics company. This deepwater port is now the supply centre for Australia’s oil and gas projects and a passway for 4.5 million cargoes. The port comprises several facilities, including East Arm Wharf and Stokes Hill Wharf, and is operated by Darwin Port Operations.

Why did Australia give it to China?
In 2015, Australia’s Liberal Party decided to privatise publicly owned firms. The port was in poor infrastructural condition. To address the funding gap, the government went for an open tender. The former treasurer, Dave Tollner said: “We were very reluctant to go borrowing a lot of money to put into a port.” 

The Australian government called for bids; out of 33 willing investors, Landbridge offered USD 506 million. The deal got approval after the review of Australia’s Security Intelligence Organisation (ASIO) and Australia’s Defence Department. They reviewed strategic and operational risks including cyber attacks, intellectual property theft, infrastructure degradation and port shutdowns. Australian Strategic Policy Institute defence analyst Dr John Coyne noted that the allegations of covert surveillance at the port were less of a national security issue.

What is the issue today between China and Australia?
In 2024, Australia’s parliamentary committee recommended that the federal government consider reclaiming the port, citing national security.  During the election campaign, the current Labour Party Government Prime Minister, Anthony Albanese said: “We want it to be in Australian hands.”  Dr Coyne noted that this port would be vital for contingencies in the South China Sea, Taiwan or the Indo-Pacific. He added that the fact that this infrastructure and decision around the port are in the hands of China is the bigger issue. 

Darwin hosts around 2,000 US Marines to conduct exercises for six months per year. Both the US and Australia plan to expand air bases in the same location to host US bombers. Hence, the government tries to buy back or re-nationalise if a private buyer doesn’t emerge.

Second, the financial performance of Landbridge. The latest annual report revealed that Darwin Port made a net loss of more than USD 34 million in the 2023-2024 financial year. The NT government stated its “concerns surrounding the financial status.” It cast doubt on its financial stability and ability to meet lease obligations.

Third, the race for port ownership. According to The Australian report, Cerberus Capital Management is working on a formal proposal to buy the port. This US-based private-equity firm has reportedly met with Darwin Port’s CEO but has not engaged with Landbridge’s board. It remains unclear whether the government would give away this strategic location to another foreign bidder.

What is China’s position?
The Landbridge’s non-executive director in Australia Terry O Connor said: “The port is not for sale."  During a recent visit, China’s Ambassador to Australia criticised the decision and stated economic aspects. He stated that China invested about USD 40 million in upgrading the port facilities, and it resulted in a 95.7 per cent increase in the total gross tonnage of arriving vessels. He said: “It’s ethically questionable to lease the port when it was unprofitable and then seek to reclaim it once it becomes profitable.” China’s ministry spokesperson Mao Ning stated that Landbridge obtained the lease of Darwin Port through the market therefore, the company’s legitimate rights and interests should be fully protected.

Reference
Kirsty Needham, “Australia PM says working on plan for Chinese company to sell Darwin port to 'Australian hands',” Reuters, 4 April 2025
Kirsty Needham, “Chinese ambassador criticises plan to return Darwin Port to Australian ownership,” Reuters, 26 May 2025
Kirsty Needham, “Cerberus eyes Darwin Port, says Chinese port operator, amid Australia's local ownership push,” 27 May 2025
Kirsty Needham, “Australia's Northern Territory queries Chinese operator of Darwin Port over finances,” 27 November 2024
Jano Gibson, “Why did the Northern Territory lease Darwin Port to Chinese-owned company Landbridge?,” ABC News, 7 May 2022

About the author
Aparna A Nair is an undergraduate student at the Department of Political Science at Madras Christian College. She is currently a research intern at the National Institute of Advanced Studies.


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