US delegation pressed Australia to end Port of Darwin lease, ramp up defence spending

Washington: Australia is being pressured to hasten the termination of a Chinese company’s lease over the Port of Darwin, with a visiting US congressional delegation raising the issue – as well as defence spending – with top government ministers.

Michael McCaul, a Republican congressman who co-chairs the Friends of Australia caucus, said the matter was raised by a member of the US delegation when they met last week with officials including Deputy Prime Minister Richard Marles, Foreign Minister Penny Wong and Defence Industry Minister Pat Conroy.

“That was something that was brought up by, frankly, our side … it’s an issue,” McCaul said during a debrief about the trip in Washington. “When we talk about critical minerals, I think it’s important that Australia own that port.”

McCaul said the delegation accepted the Albanese government’s response that it was working to get out of the 99-year-lease to the China-controlled Landbridge Group, a decision made in 2015 by the Northern Territory government and waved through by the Turnbull government in Canberra.

Before the last election, both major parties promised to end the lease, either by finding an approved private buyer or direct intervention. “They can always exercise eminent domain over it in the national interest,” McCaul said.

The US government has always disliked the deal, with then-president Barack Obama raising concerns about it with then-prime minister Malcolm Turnbull at the time.

Much of the lithium exported from Australia for refining leaves from the Port of Darwin, and McCaul indicated this was of concern to the US, given the multibillion-dollar critical minerals deal between the two countries.

China will resist moves to terminate the lease. This year, Landbridge lodged a legal challenge with the World Bank’s International Centre for Settlement of Investor Disputes, accusing Australia of discrimination and breaching the China-Australia free trade agreement.

A China hawk and chairman emeritus of the House Foreign Affairs Committee, McCaul visited Taiwan in August and said he was increasingly worried about Chinese aggression against the island – which Beijing claims as part of China.

He said it was “absolutely critical” that Australia joins the US in any conflict with China over Taiwan, and had no doubt Australia would do so. “I don’t think it was even questioned. It’s just obvious,” he said.

Asked about concerns that an increasing US military presence in Australia – particularly US submarines rotating through HMAS Stirling near Perth – made the country a target, McCaul said: “Australia is a target.”

Defence spending was also discussed on the visit, McCaul said, making it clear that Washington still expected Australia to lift spending to at least 3.5 per cent of gross domestic product. That is despite President Donald Trump appearing nonplussed about the issue when Prime Minister Anthony Albanese visited a year ago.

McCaul said he recommended that Australia prioritise additional expenditure on pillar two of AUKUS, which involves developing and fielding emerging technologies. AUKUS was announced five years ago this week.

“We appreciate your increase in defence spending. We’d like to see more as a percentage of GDP … I don’t sense that we would expect Australia to be off the hook.”

Marles said following a recent meeting with US Defence Secretary Pete Hegseth in Washington that the Albanese government was spending an extra $117 billion on defence over 10 years. “We have a good story to tell,” he said.

The government did not immediately respond to a request for comment about the Port of Darwin. During a visit to Darwin in July, Albanese said the government was continuing to “argue the case” to scrap the lease.

It had been a mistake to sell it, he said, noting he opposed the sale at the time. “I’m determined that it will come back into Australian hands, and we’re negotiating those issues through.”

Last year, The Australian reported that US private equity firm Cerberus Capital Management was interested in acquiring the Port of Darwin, along with Australian freight company Toll Group and superannuation funds.

McCaul said there was no discussion about potential buyers during the visit.

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