Article by Ben Packham, courtesy of The Australian
26.05.2025
A US private equity firm with strong ties to the Trump administration is poised to make an offer to buy the Port of Darwin from its Chinese owner, in a test of Anthony Albanese’s resolve to bring the port back under Western control.
The Australian can reveal New York-based Cerberus Capital Management is preparing a formal proposal to buy the port from Landbridge Group’s billionaire owner Ye Cheng, who is a close confidant of senior Chinese Communist Party figures.
It’s understood the investment firm’s offer will be slightly above the $506m that Landbridge paid 10 years ago for its 99-year lease over the facility. The company says the facility is not for sale, but one source said the port operator was open to offers of about $1bn.
The Prime Minister warned in the midst of the election campaign that Landbridge must either sell the port voluntarily or it would be forcibly acquired by the government. The US has had longstanding concerns over the port’s Chinese ownership, but Mr Albanese has been facing pressure from Beijing to back down on his pre-election pledge to strip Landbridge of the lease.
Cerberus Capital Management was until recently run by co-founder Steve Feinberg, who was appointed in March to be US deputy defence secretary.
Representatives from the company met Landbridge Group and Northern Territory Treasurer Bill Yan last week.
Chinese ambassador Xiao Qian said forcing the company to give up the lease would be “ethically questionable” given it had secured it through an open and transparent bidding process and made significant investments in the facility since then. “These efforts have brought remarkable improvements to the port, turning its financial situation from losses to profits and contributing positively to local economic and social development,” the ambassador said in comments posted on the Chinese embassy website.
“Such an enterprise and project deserves encouragement, not punishment. It is ethically questionable to lease the port when it was unprofitable and then seek to reclaim it once it becomes profitable.”
Alluding to the stabilisation of bilateral ties during the Albanese government’s first term, Mr Xiao said the countries were “comprehensive strategic partners” and should foster “mutual trust”.
Mr Albanese opted to leave the port under Landbridge’s ownership following an October 2023 review by the Department of Prime Minister and Cabinet that found there was “a robust regulatory system” in place to manage any risks. But, in an election campaign move to gazump a Coalition pledge, the Prime Minister said the government wanted the port to be returned to “Australian hands”.
Mr Albanese said the government was looking to find a buyer for the asset, such as an Australian superannuation company. But “if it reaches a point where the commonwealth needs to directly intervene, then we’d be prepared to do that”, he told ABC Darwin.
It’s not yet clear how the government will proceed with the plan or when it hopes to finalise the process.
While Cerberus Capital Management is American, not Australian as Mr Albanese had hoped, its bid would likely sail through the government’s risk-based foreign investment approvals process if accepted by Landbridge Group.
The company’s ties to the Trump administration through Mr Feinberg raise the stakes over the future of the port, given the US military’s strategic interests in Darwin and the wider Top End, and heightened tensions between the White House and Beijing.
Former president Barack Obama expressed his displeasure over the port’s Chinese ownership to former prime minister Malcolm Turnbull soon after its sale in 2015, reportedly asking for a “heads-up about these sorts of things” in future.
Cerberus Capital Management, which declined to comment on Monday, has about $US60bn worth of assets under management. It purchased The Philippines’ strategically important Agila Subic Shipyard in 2022 amid concerns over a potential takeover by state-run Chinese firms.
Landbridge Group non-executive director Terry O’Connor said the port wasn’t on the market, and the government was yet to approach the company to discuss the facility’s future.
“The owner holds the position that he has always held, and that is that the port’s not available for purchase or not available for someone else to take over,” Mr O’Connor said. “That’s his position, and remains his position. If there was an approach, and we did enter into any negotiations, we would be obviously doing that through some sort of confidentiality agreement. And none of those exist at this stage.”
In its latest available annual report, for the 2023-24 financial year, Landbridge posted a net loss of more than $34m. PricewaterhouseCoopers’ auditors found there was “a material uncertainty that may cast significant doubt on the Landbridge Group Co’s ability to continue as a going concern”.
Mr O’Connor said the loss was part of a “financial strategy” and the company was not in difficulty.
An Albanese government spokeswoman was unable to provide further details on the government’s approach to securing a buyer for the facility or bringing it under public ownership.
“The Port of Darwin is not only a vital part of the region’s economic success, it’s also a critical infrastructure asset of national importance,” she said. “The Australian government is working closely with the Northern Territory government on next steps.”
The NT government did not respond to questions.
About 2500 US Marine Corps personnel deploy to Darwin for six months each year to train with Australian Defence Force personnel. The territory also hosts US Bombers on rotational deployments, including nuclear-capable B-52s, while a US nuclear-powered submarine stopped in Darwin Harbour this year metres from the Chinese-owned port.
The port’s future is likely to be on the agenda at AUSMIN talks, due to be held in Australia in coming months. The port is also likely to be raised during an expected visit by Mr Albanese to China this year for annual leaders’ talks, and could come up when the Prime Minister travels to the US in coming weeks to meet Mr Trump.
