DARWIN, Australia - A 99-year lease of the strategically important Port of Darwin to China's Landbridge Group has again become a source of tension in Australia, with the company launching international arbitration proceedings after Prime Minister Anthony Albanese pledged to return the facility to Australian control.
Albanese made the commitment during last year's federal election campaign amid security concerns surrounding the port in Australia's north. Landbridge, which opposes the move, turned to the World Bank-affiliated International Centre for Settlement of Investment Disputes in April this year.
Darwin Port is used by U.S. Marines who rotate through the northern Australian city each year, while U.S. and Australian naval vessels also dock there. A number of military facilities are located nearby.
Signs warning of restricted areas can be seen around the port entrance.
The controversy dates back to 2015, when the Northern Territory government agreed to lease the port to Landbridge until 2114 for A$506 million ($356 million).
The deal sparked heated debate over possible security risks. Landbridge's reported links to the Chinese military also drew scrutiny, while then-U.S. President Barack Obama was reported to have expressed Washington's "dismay" that it had not been consulted beforehand.
The lease went ahead under the conservative government of then-Prime Minister Malcolm Turnbull.
After Albanese's Labor government came to power in 2022, it ordered another review of the arrangement. That review concluded in 2023 that there was no need to vary or cancel the lease, advice the government accepted.
But the political mood had shifted by the 2025 election, when both Labor and the opposition Coalition campaigned on ending foreign control of the port.
"We want it to be in Australian hands," Albanese told ABC Radio Darwin in April 2025.
Albanese said the government was seeking a private buyer, particularly through superannuation funds, while leaving open direct Commonwealth intervention if necessary.
The Coalition said it too would seek an Australian operator and, as a last resort, use compulsory acquisition powers if a private deal could not be reached.
The tougher stance followed years of friction between Canberra and Beijing, including concerns over Chinese attempts to exert political influence in Australia and a sharp dispute after Canberra called for an investigation into the origins of COVID-19.
Australia has also become increasingly wary of China's growing engagement with South Pacific island nations amid concerns that Beijing could seek a military foothold in the region.
The push to return the port to Australian hands has also drawn a response from Beijing.
Chinese Ambassador Xiao Qian said in January that Beijing had an obligation to protect the interests of Chinese companies if the port were taken back through forceful measures.
Landbridge has called the Australian government's approach "discriminatory" and says it is inconsistent with Australia's obligations under its free trade agreement with China.
The dispute comes as Australia and China seek to preserve an improvement in relations under the Albanese government following years of diplomatic and trade tensions.
China remains Australia's largest export market.
Graham Fletcher, Australia's ambassador to China from 2019 to 2023, warned in an August paper for the Lowy Institute that the bilateral relationship remained vulnerable to another buildup of serious disagreements that could prove difficult to manage.
He cited Canberra's effort to return Darwin Port to Australian ownership as one issue facing "dogged resistance" from Beijing, raising the possibility of renewed friction between the two countries.
