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Business / Economy

Landbridge charts new course with port deal

By ZHU WENQIAN (China Daily) Updated: 2015-10-23 07:50

Privately owned energy and infrastructure conglomerate Landbridge Group has won an A$506 million ($307 million) bid to run Australia's Port of Darwin for 99 years.

The Shandong province-based company said it intends to leverage its port and logistics businesses in Rizhao with the North Australian port to grow two-way trade between the two countries.

"Following the China-Australia free trade agreement, Darwin is best positioned to be the gateway between Australia and China, and the rest of Asia. The railway line running between Darwin and South Australia provides an efficient route to move goods between the two countries," said Mike Hughes, director of Landbridge Infrastructure Australia.

Landbridge won the bid amid stiff competition from several international bidders. Under the agreement, the Australian Northern Territory government will lease the facilities to Landbridge for 99 years, and continue to hold 20 percent of the interest and retain oversight and regulatory functions.

The port, the largest live cattle exporter in the world, also handles general cargo, oil and gas support vessels and cruise ships. The Chinese company plans to develop these areas.

"Currently, most of the exports from Darwin are to China and rest of Asia. In particular, live cattle are exported to Indonesia and Vietnam, and we expect this to continue," Hughes said.

After the recent decline in Australian iron ore prices, the government was forced to shut down some factories due to lower demand. The Northern Territory government hopes to transfer the local economy from one led by mining to one driven by catering and tourism.

"The Northern Territory has huge potential across mining, oil and gas, agriculture, cattle and tourism. While commodities are at a low point in the cycle, over the medium term we believe all these areas will grow significantly," Hughes said.

Landbridge processes 30 million metric tons of goods every year, and hopes to expand its annual port capacity to more than 200 million tons.

It also has operations in hotels and tourism, trade and manufacturing, real estate and petrochemical sectors.

Andrew Robb, Australia's federal minister for trade and investment, said: "Landbridge's commitment to the growth of Darwin Port will be a huge spur to the development of Australia's north, serving as a catalyst for the entry of major investments across the port's upstream supply chain in agriculture, resources and energy and economic infrastructure."

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