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Australia's Northern Territory retains stake in China-run port
July 4, 2017 / 7:04 AM / 5 months ago

Australia's Northern Territory retains stake in China-run port

SYDNEY, July 4 (Reuters) - Australia’s Northern Territory government said on Tuesday it will retain a 20 percent stake in the strategic Port of Darwin that it leased to China’s Landbridge Group Co in 2015.

The tropical port is a sensitive diplomatic and physical asset, given Landbridge is said to have links with China’s military, and the area is also used for military exercises involving U.S. forces.

Darwin has hosted a contingent of 1,250 U.S. Marines since 2011, part of former President Barack Obama’s strategic pivot to Asia to counter a rising China.

The Northern Territory government had been holding a 20 percent share in the port while Landbridge searched for an Australian partner to take it over, in line with the 2015 lease arrangements.

On Tuesday, the territory’s government said it would keep that stake permanently and pay Landbridge only a nominal fee of A$100 ($76.33).

“The NT government will not be required to refund any of the $506 million lease purchase price to retain the 20 percent stake,” the territory’s chief minister, Michael Gunner, said in a statement.

Gunner said the territory would earn no income from its stake, nor contribute to the port’s operating costs.

A source close to the process said Landbridge had been unable to find a buyer.

Darwin Port Chief Executive Officer Terry O‘Connor, who works for Landbridge, declined to comment.

Landbridge last month told Reuters it was canvassing Australian and Chinese banks to recapitalise its investment in the port.

The firm has previously said it is not connected with the Chinese government or military, though its chairman, Ye Cheng, has been a delegate on the advisory body to China’s parliament, a high-profile but largely ceremonial position handed out to Communist Party backers. ($1 = 1.3101 Australian dollars) (Reporting by Tom Westbrook in SYDNEY; Editing by Jonathan Barrett and Robert Birsel)

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