Coal giants confident China back at table
Poppy Johnston |
Australia’s coal industry is growing in confidence it will be able to resume exporting to China as relations between the nations continue to improve.
But amid reports China is allowing coal imports to resume, the industry is urging it to act quickly or risk missing out on sought-after contracts.
Coronado Global Resources chief financial officer Gerhard Ziems said it wasn’t the first he’d heard of the potential relaxation, but put weight in the reports after Foreign Minister Penny Wong’s recent visit to China.
“We have heard these rumours last year … we’re a lot closer now to China buying coal again from Australian producers,” he told AAP.
“Chinese steel mills need Australian coal, they tried to make do with Mongolian and Russian but they just don’t have the qualities of Australian coal.”
But despite the thawing between the countries appearing a slow process, Mr Ziems stressed a need for urgency on China’s behalf with major players already locking in deals for their next financial year.
“The difficulty right now is we are negotiating contracts with all the steel producers worldwide. Existing contracts expire end of March … we’ve already negotiated a few contracts over the last few days.
“If China wants to buy on a contract basis, they need to come to the table now.”
It would be the first time since China had imported Australian coal since Beijing imposed an unofficial ban on coal trade with Canberra in 2020, something Resources Minister Madeleine King welcomed.
“The resumption of normal trade across the board between Australia and China is in both countries’ best interests,” she said in a statement.
Diplomatic ties between the two nations have been on the mend following a four-year deep freeze, with Senator Wong meeting with Chinese counterpart Wang Yi before Christmas.
The pair discussed trade sanctions imposed on Australia by China, as well as the fate of two Australians detained in the country.
On Wednesday, Reuters reported China’s state planner had allowed three central government-backed utilities and its top steelmaker to resume coal imports from Australia.
It’s not first time speculation about an end to the trade ban has surfaced, with reports emerging in July 2022 that ultimately did not come to fruition.
The National Development and Reform Commission summoned China Datang Corp, China Huaneng Group, China Energy Investment Corporation and China Baowu Steel Group to discuss the resumption of coal imports from Australia, two people familiar with the matter were reported as saying.
The firms will be granted permission to purchase Australian coal only for their own use, they said.
China imposed restrictions on Australian commodities including coal and wine just over two years ago after relations between Beijing and Canberra turned sour.
Australia used to be the second largest coal supplier to China before the ban, accounting for nearly 30 per cent of China’s coal imports or more than 70 million tonnes of supply.
AAP
