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Australia Minister denies report of China coal ban

22nd February 2019

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – The Australian government has moved to allay shareholder fears after the share prices of Australian coal miners tumbled on news that China’s northern port of Dalian had banned coal imports from Australia, and placed an overall cap of 12-million tonnes for coal imports during 2019.

Trade, Tourism and Investment Minister Simon Birmingham said on Friday that there was “no basis to believe” that there was a ban on Australian coal exports into China, or any port in China.

“We do understand that China applies in some locations, import restrictions and quotas in relation to the volume of coal, and the application of those quotas combined with different testing in terms of quality assurance of products and environmental testing and standards, may be slowing down the processing of coal in certain ports across China.

“We do not believe this is isolated to Australia but may be and is likely to be applicable to other coal exporters into China as well,” the Minister said.

Birmingham said that the Australian government was seeking information and clarity from the Chinese authorities, and working with embassies in that country, as well as with coal exporters to understand the issue.

Australia is the world’s largest metallurgical coal exporter and second-largest thermal coal exporter, with China accounting for 22% and 21% of the respective demand for Australian coal.

Some 179-million tonnes of metallurgical coal were exported in 2017/18, generating revenues of A$38-billion, while a further 203-million tonnes of thermal coal were exported in the same period, generating A$22.6-billion in revenues.

While the imports through the Port of Dalian only accounted for some 1.8% of Australia’s total coal exports, the so-called ban of Australian coal through the port comes as other major ports in China prolonged the clearing times for Australian coal to at least 40 days.

“We do need to keep in perspective, that the growth of our trade with China, as in indeed our growth in trade overall, has been of significant proportions in recent years. The port that has been the centre of particular attention, transfers significant volumes of Australian coal, but still less than half the growth we experienced in the value of Australia's coal trade with China in the last year alone. That demonstrates just how significant our trade with China is. How significant the growth in our trade in coal with China has been, and the fact that we should keep some perspective that the issues that we are dealing with are serious, they’re important and we are working as hard as we can to get clarity around the exact policy positions that China is applying, to ensure that we can give as much confidence and certainty to Australian coal companies as is possible,” Birmingham said.

China’s Foreign Ministry spokesperson Geng Shuang has been quoted as saying that Chinese customs were inspecting and testing coal imports for safety and quality assurances.

"The goals are to better safeguard the legal rights and interests of Chinese importers and to protect the environment,” he told reporters.

Birmingham reiterated that he was confident that the measures being put in place were not discriminatory towards Australia, and were not measures targeted towards Australia.

“This is not the first occasion, where Australian coal exports to China have slowed in terms of the pace at which they are processed or assessed and allowed into the country. And where we have seen that slow before, we’ve equally then seen a very quick pick-up occur subsequently. With that subsequent quick pick-up, in the final quarter of last year, we saw new records hit in terms of the volume and value of coal imports into China.

“So, we can be confident as a country, that our relationship we believe is strong, that our ability to work through these issues is strong, and the economic ties we have, valued as they are by both parties, will continue to be strong into the future,” he added.

The share price of majors BHP and Rio Tinto fell by 0.63% and 01.3% respectively, while coal miners Yancoal, Stanmore and New Hope Coal also reported falls in share prices.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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