Any potential ban could prove a crushing blow to Australia, which is home to four of the world’s 10 biggest coal mines and is the biggest exporter of the mineral
The alleged Chinese ban on Australian coal imports presents a “lose-lose” situation, says Prime Minister Scott Morrison.
The speculation over a potential ban on the fossil fuel first surfaced on 9 October, when S&P Global Platts reported that Chinese state-owned end-users had been given a verbal notice to stop importing Australian coal.
The Global Times, a Chinese state media outlet, has now reported that the country’s top economic advisory body has given the green light for power stations to import the mineral without clearance restrictions, but Australia has been blocked from that list.
Any potential ban could prove a crushing blow to the nation, which is home to four of the world’s 10 biggest coal mines and is the biggest exporter of the mineral – with exports amassing $70bn Australia dollars ($53bn) in the 2019 fiscal year. During the 2018-19 financial period, China alone imported A$14bn ($11bn) worth of Australian coal.
Prime Minister Morrison “seeking clarification” over alleged Chinese ban on Australian coal imports
But Morrison told reporters that he is “seeking clarification” from the Chinese government and until that position is clarified, the reports can only be taken as “media speculation”.
“If that (the ban) were the case, then that would obviously be in breach of World Trade Organization (WTO) rules and in breach of our own free trade agreement (with China) so we would hope that is certainly not the case,” he added.
Although A$4bn ($3bn) of Australia’s A$13bn ($9.8bn) thermal coal exports went to China, Morrison confirmed it was not the country’s largest customer, with Japan leading the way on that front.
In terms of metallurgical coal, the Prime Minister added that India is nation’s largest customer of the mineral.
“Our coal mines and our coal exports have a diverse customer base, but obviously we take these issues very seriously,” said Morrison.
“If this were to be the practice, the $A4bn that goes into coal-fired power generation in China, it really is a lose-lose here.
“Because Australian coal compared to the coal that is sourced from other countries, the other countries have 50% higher emissions than Australian coal and, as a result, that would be a bad outcome for the environment.”
This is not the first time there has been speculation with regard to China importing Australian coal, as trade tensions between the two countries have continued throughout 2020.
Relations have been affected between the nations following Canberra’s call for an inquiry into the origin of the coronavirus pandemic, which first broke in the Chinese city of Wuhan last December, with China then going on to impose sanctions on imports of wine, barley and beef.
Morrison said he hopes to have some “material discussions” with the Chinese government about the current trade issues that exist between the nations.