Australia to Build New Darwin Port After Chinese Lease, ABC Says

(Bloomberg) -- The Australian government will announce a new port will be built in the strategically important city of Darwin after the current facilities were leased to a Chinese company, the Australian Broadcasting Corp. reported Thursday, without citing sources.

It’s unclear whether the new port would be solely for industrial use, or would be a facility that can accommodate visiting naval ships from strategic partners the U.S. and U.K., the ABC said. It was understood the announcement would be made in coming weeks by Prime Minister Scott Morrison’s government during the Australian election campaign, it added. 

The national broadcaster said Infrastructure Minister Barnaby Joyce issued a statement on Tuesday that the government has earmarked A$1.5 billion ($1.1 billion) on new port infrastructure in the Northern Territory, of which Darwin is the capital. 

China’s Landbridge Group secured a 99-year lease for Port of Darwin’s commercial operations in 2015 for A$506 million. The city in Australia’s far north is a naval entry point into the increasingly contested Indo-Pacific region, and is a base for around 2,500 U.S. Marines as part of a decade-long security pact with Australia’s key ally.

Read: Darwin Port Review Finds No Security Concerns, Australian Says

Since Landbridge’s purchase, which was criticized by then-U.S. President Barack Obama, Australia’s diplomatic and trading relations with the world’s second-largest economy have nosedived amid moves to restrict Chinese investment in critical infrastructure and utilities. Several lawmakers in Morrison’s government have said the port’s Chinese ownership has created a security threat and have called for its forced divestment.

©2022 Bloomberg L.P.