Episode Transcript
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Speaker 1 (00:00):
Now as we know, it's being reported 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. New York based Cerebus Capital
Management is preparing a formal proposal to buy the Port
of from Lambridge Group's billionaire owner. But is it going
(00:22):
to go ahead? I mean, should it go ahead? And
what could the potential changing of hands mean when it
comes to our relationship with China. Well, joining me live
on the line is the Australian Strategic Policy Institute's Director
of National Security Programs, doctor John Coin. Good morning to you, John, Good.
Speaker 2 (00:41):
Morning CARTI you know they changed my title again. I
wanted to keep my normal Australian Strategic Policy Center title,
so I'm sorry again.
Speaker 1 (00:51):
That's all right. Well, I was going to say, I've
got a couple of different titles there for you, so
I wasn't sure what to use, John, Nah.
Speaker 2 (00:58):
Nah, Look, you know what this conversation goes. I spent
actually I'm not in Northern Australia, but I spent the
last eight years concentrating all things Northern Australia. Let's get it.
Speaker 1 (01:07):
Done, Yeah, well, this is it. I know that you
have got such keen interest and certainly have have such
knowledge in this space. I mean it is understood that
this US investment firm is set to offer slightly above
five hundred and six million dollars at Lambridge paid ten
years ago for its ninety nine year lease over the port.
(01:29):
Lambridge saying the facility is not for sale, John, where
do you think this is all going to go?
Speaker 2 (01:35):
Look, you know what predicting the futures of mugs game, Catie,
you know that. I know you want me to say
this is the answer, But I think there's a number
of different things at play. So first off, if you're
asking me what Beijing wants, Beijing does not want to
lose the Port of Darwin and does not want Lambridge
to lose the Port of Darwin, and there's good reasons
for that. Australia has been the leader on a couple
of things that have really irked Beijing. So number one,
(01:59):
it led on beat in Huawei and then a number
of other countries followed. Number two, it's stopped investment by
Chinese firms in some critical minerals investments, and countries like
Canada followed. If Australia were to divest this from land Bridge,
that would send a very powerful message across the globe
in other countries where China has brought infrastructure. So from
(02:22):
that perspective, Beijing doesn't want that to happen. Land Bridge
by default won't want that to happen, and certainly they've
been firm. It's probably in terms of coverage or optics.
The Albanesi government would prefer that an Australian company working
by land Bridge. Third, the Alberanesi government would probably prefer
(02:46):
that transaction occurred without them being forced to divest, so
that it was just a natural market decision. But what
I can say is it does seem that we're getting
ahead of steam around a change in the ownership the
port of Darwin one way.
Speaker 1 (03:01):
Or the other now in terms of a changing of
hands and what it might look like or what it
might mean talk us through that. From that more strategic perspective,
I guess.
Speaker 2 (03:14):
I think you know, you know, we've had a couple
of reviews, and I guess people in Darwin and in
the Northern Territory are probably fed up with this. We're
going to have a review, so they just want some
certainty We've asked the same question over and over again,
you know, is it a security thread? The real issue,
I think I've said this before is that the Darwin
Port is our most northern deepwater port. It has great
(03:38):
strategic value, not for just national security, but it's a
bridge into the region and the port is critical to
the future economic development of the Northern Territory. Now, at
a baseline, there may be some divergence between what is
in the best interest in the development of that port
(03:59):
for the Northern Territory and Australia versus what Beijing may
or may not want and what land Bridge may or
may want not want there. So, the way I see
it is this is that we really want to have
someone who owns the Darwin Port who has the same
economic national security interests as the people in the Northern
Territory do have in their port. And there's the Australian
(04:22):
government and the Australian people have in that port.
Speaker 1 (04:24):
I mean, you would think that aligning with the US.
You know, some would say that's a natural sort of
alignment to go down. I guess others may may be
concerned that if we go down that path that it
could mean China gets quite annoyed.
Speaker 2 (04:41):
Look, China probably, as I said at the start, if
there's does no matter who goes on to own the port.
If there's if it's divested to another owner, Beijing will
be incredibly unhappy that that's occurred, not just because of
the loss of Darwin Port, but because what it might
(05:01):
do more broadly across the globe in terms of ownership
of infrastructure. So the other part is is that you know,
in terms of international relations, Australia making decisions that are
in the best interests of our national security and our
economic growth is the right of a sovereign state. At
the end of the day. We shouldn't be changing that.
(05:23):
So you know, I put it the different way, would
China allow an Australian company to own poor infrastructure in
mainland China? And if there was a divergence of opinion
in Beijing where an Australian company owned a port or
owned some sort of infrastructure, would we be having the
same or would they be having the same hand ringing
(05:44):
over whether or not Australia was happy or unhappy with it.
And I know the answer to that, and that is no,
Beijing will always do and they're unapologetic about this what's
in the best interest of their nation, and I have
taught them for that now I know.
Speaker 1 (05:57):
The Chinese ambassador on Sunday, while in Darwin, said it
would be unfair to acquire the asset when Landbridge had
invested in it and such an enterprise and project deserves encouragement,
not punishment. He said it is ethically questionable to leae
support when it was unprofitable and then seek to reclaim
it once it became profitable. I guess I'm not overly
(06:20):
surprised by that statement from the ambassador.
Speaker 2 (06:24):
No, I'm not surprised either, but I guess you know,
and I don't want to play a game of what
about isn't? But I guess it was really unfair on
Australian winemakers when all manner of economic coercion was applied
to them. I guess it was really unfair for those
people in the lobster industry who lost jobs and had
financial insecurity because of those issues. So barley farmers were
(06:48):
in the same boat. So I think this discussion of
fair and unfair at the end of the day, that
it's not about a question of fair and unfair. Just
like China made decisions in relation of the CCP made
decisions in relation to those those issues. Australia is simply
looking at its economic development and making its sovereignty and
(07:10):
its national security and making a decision around that came.
So you know, I guess that's a very easy throwaway
line from the ambassador. Yeah.
Speaker 1 (07:18):
Well, and I mean, at the end of the day,
like you've pointed out, China will do what is best
for China and Australia should do what is best for Australia.
I mean, do you think though a forcing of the
sale would cause diplomatic tensions or concerns with China?
Speaker 2 (07:32):
Look, I think it will cause tensions. And you know,
there's no doubt that Beijing, in my mind, does not
want this to occur, and not just because of the
port of Darwin, but as I was saying before, because
what message would this send globally if Australia was the
first country to say, you know what, we're okay with
China investing in our coal mines, We're okay with them
(07:55):
investing in iron ore mining, but we're not okay with
them owning so certain pieces of strategic infrastructure, and other
countries would as they've done in the past, as they
did with Huawei infrastructure. They would sit there and look
at those decisions and go through that process themselves. So
you know, Beijing doesn't want that to occur. But the
other thing about international relations is that they do ebb
(08:19):
and flow. So you know, it may cause a bump
in the road for the relationship between China and Australia,
but we shouldn't also paint it in a very binary way.
So we're not saying that China can't do business in Australia.
We're quite the opposite. You know, we're happy to do
business with them in a whole range of areas that
don't impact on our sovereignty, national security, and that's iron ore,
(08:42):
that's coal. We're happy with that. But we're saying in
this specific spot, place and space that that is not
the case.
Speaker 1 (08:51):
Now, looking at this from the other perspective and looking
at the fact that you know that we could see
the port change hands to a US base firm, I mean,
what do you think that US investment would mean or
why do you think they want the port? Obviously I'm
assuming because it is so important, but what do you
make of that?
Speaker 2 (09:11):
Look, it's always difficult in when you're talking about when
you talk about funds like Service going through and making offers.
I think my understanding is that there has been no
formal statement from them in relation to an offer, and
that it is an ongoing perhaps it's not even ongoing discussion,
it's a statement at the moment or speculation. What I'd
(09:33):
say is Service has a history of investing in pieces
of infrastructure that have a national security lens for the US.
So they were involved in buying back Subic Bay in
the Philippines and redeveloping it both as an investment with
long term patient capitals. So what I mean by that
is they weren't looking to take an immediate profit. They
(09:56):
were looking at the long term and they saw it
as a wise investment in the inter of US national security.
So they do have that sort of history, you know.
For my money, you know, I would love, I would
love for an Australian superannuation fund to come along and
look at this as a patient capital activity and invest
in the long term economic development of Australia. So and
(10:20):
certainly that's a much better optics than moving from an
owner that's linked to the Chinese Communist party to an
owner that has strong ties the US government, so it'll
be much better to have an Australian superannuation fund or
hedge fund invest in that sort of infrastructure.
Speaker 1 (10:39):
Well, Dr John Coyn, it is always interesting to catch
up with you. I always appreciate your insight. Thank you
very much for having a chat with us this morning
about the Darwin Port, and no doubt we'll be talking
to you again soon.
Speaker 2 (10:52):
No, I thank Cardie. I look forward to it.
Speaker 1 (10:54):
Thank you, thank you so much.