Australia Begins Financial Scrutiny of the Chinese Operator of Darwin Port
The Australian Northern Territory government has revived scrutiny of the lease of Port of Darwin to the Chinese operator Landbridge. In a statement on Wednesday, the state government said that it is reviewing its rights on the Port of Darwin, and is concerned about the financial status of the lessee. The recently released 2023-24 annual report for Landbridge revealed that the company made a loss of more than $22 million.
“There is a material uncertainty that may cast significant doubt on the Landbridge Group’s ability to continue as a going concern,” said a PwC audit. Northern Territories Treasurer Bill Yan said that he has written to Landbridge seeking further information about its financial situation, and ability to meet its payment obligations. In addition, the province will work with the Federal Government to assess further steps regarding operations at the port.
“Our immediate focus is to ensure the port remains operational while its longer term future is confirmed,” added Yan.
However, Landbridge Australia said that Port of Darwin operational performance remains strong. The loss incurred in the FY2024 is as a result of a long-standing debt by the parent company, which is due to be refinanced.
“Darwin Port’s [parent company] is in the process of refinancing an overdue corporate bond amounting to $70 million, which we expect will be settled by Q2 in 2025. The Group is considering specific asset sales in China through 2025, but not Darwin for avoidance of doubt,” said Non-Executive Director Terry O’Connor.
Port of Darwin has been at the center of controversy since 2015, when the Australian government leased to China’s Landbridge for 99 years. At the time, the transaction was even criticized by the U.S government. The port’s strategic location serves as an important naval base in the Indo-Pacific region, which includes hosting U.S. Marines.
As part of his campaign in 2022, Australian Prime Minister Anthony Albanese had promised to review Darwin Port’s lease. Last year, the Prime Minister’s Office and the Cabinet completed the review but found it unnecessary to cancel the lease contract.
“There is a robust regulatory system in place to manage risks to critical infrastructure including the Port of Darwin,” concluded the review.
