World news – Qld mine on the sidelines as China’s coal ban delivers $ 6 billion blow

A central coal mine in Queensland faces a potential closure while China’s economic pressures caused the « biggest drop » in thermal coal exports that hit the state’s economy and jobs.

While the extractive sector kept the country going during the COVID-19 shutdown, industry suffered a $ 6 billion body blow from China’s « informal restrictions » on Australian coal.

A federal government report released today, Resources and Energy Quarterly, warns of difficult conditions as China’s September measures result in « the biggest drop in (coal) exports » of all time and the « biggest drop in more than 30 years in 2020. » Had a consequence « .

It warns of the « possible closure » of the Newlands coal mine in the Bowen Basin as it nears the end of its life and will add to the difficult conditions for years to come.

Data from the Department of Foreign Affairs and Trade shows that prior to the informal restrictions, Queensland exported $ 9.7 billion in coal, heat and metallurgy in the 2019-20 period.

Restrictions included preventing ships carrying Australian coal from docking and ordering steel mills in China not to purchase the product.

The report also warned that reducing global coal use in power generation would also take a toll and increase competition from gas.

National thermal coal exports are projected to decrease from $ 21 billion to $ 15 billion in 2020-21.

« Signs are more positive in early 2021 as profits rebound and volumes rise as coal previously destined for China’s ports has been successfully diverted, » the report said.

While metallurgical coal, normally used to make steel, is expected to see export values ​​spike by up to $ 7 billion, tough headwinds have been forecast as China tries to buy more resources from Russia and Canada.

« Metallurgical coal prices rose sharply in January, reversing the decline that followed China’s informal restrictions on imports of Australian metallurgical coal in October 2020, » the report said.

« The biggest upside risk to prices is likely to be the potential for extreme weather events in the fall, which could disrupt shipping out of Queensland. »

Amid mounting tensions between the two countries, China has imposed a number of sanctions or trade restrictions on Australia over the past 12 months, including beef, barley, wine, coal, seafood and wood.

« I would say just keep doing what you are doing, but with the confidence that the United States and other like-minded democracies see an interest in Australia’s success, » he said.

Originally published on the sidelines as Qld mine as China’s coal ban hits $ 6 billion

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