Chinese firm to run Port of Darwin

China's Landbridge Group bought a long-term lease in the Port of Darwin for $506 million ($US370 million), as the country seeks to capitalise on rising Chinese demand for imported food and overseas travel.



The deal comes after China Merchants Group teamed up with Australian fund-manager Hastings Funds Management in April last year to buy the lease on the Port of Newcastle in New South Wales state, the world's biggest coal export terminal, for $1.75 billion.



"Through our significant investment in the Port of Darwin, Landbridge intends to grow two way trade between Australia and Asia, leveraging Landbridge's existing port and logistics businesses and firmly putting Darwin on the map for Chinese business," said Landbridge Infrastructure Australia's director, Mike Hughes.



Under the terms of the agreement, the Northern Territory government will lease the facility to Landbridge for 99 years as the territory seeks to put itself at the forefront of Australia's mining-to-dining transition to boost the economy as a resources boom fades.



Mr Hughes said Landbridge plans to make a "considerable financial investment" to expand the port.



"In addition to committing an initial $35 million of new growth investment expenditure over the first 5 years, we anticipate in excess of $200 million of capital expenditure over the next 25 years. Given the scope of development opportunities in the Territory, we hope to invest a lot more," he said.



Landbridge, which bought Australian coal-seam gas producer WestSide Corp for $178 million last year, was selected following a competitive process which included local and international interest and resulted in a number of high-quality binding offers, the government said.



Northern Territory Chief Minister Adam Giles said the deal was about growing the port and the economy.



"In Landbridge, we have a partner that has demonstrated an outstanding track record of investment and innovation that has underpinned remarkable growth, and with it new trade and jobs," Mr Giles said. "We are confident that Landbridge will bring a similar approach to the Port of Darwin, and bring the Territory the benefits of their position, networks and experience in Asia."



The privately owned Landbridge Group operates a 30 million ton per annum port in North Haizhou Bay in Shandong province, and is in the process of expanding its port capacity to more than 200 million tons per annum -- more than 65 times the current volume at the Port of Darwin. Landbridge Group also has hotel and tourism, trade and manufacturing, real estate and petrochemical interests in China.



