Aussie coal powers China and Asia, boosting NSW and Queensland coffers
EXCLUSIVECHIEF POLITICAL CORRESPONDENT- 9:33PM FEBRUARY 27, 2024
- 99 COMMENTS
A dramatic rebound in Australian coal shipments to China following a two-year ban imposed by Beijing has fuelled a surge in thermal coal exports to Indo-Pacific countries relying on coal-fired power to keep the lights on and support heavy industry.
New figures reveal NSW coal exports to China in 2023 eclipsed pre-pandemic levels, with more than 36 million tonnes of thermal and metallurgical coal – worth about $5.7bn based on Free on Board value – shipped to the communist nation.
Data prepared by Coal Services Pty Ltd, overseen by the NSW Minerals Council and the Mining and Energy Union, shows Chinese importers last year purchased 24 per cent of the state’s coal exports after President Xi Jinping lifted restrictions banning Australian coal in 2021 and 2022.
Demand for NSW and Queensland thermal coal from Japan, China, Taiwan, South Korea, Thailand, Malaysia and Cambodia remains strong as developing nations and major economies import Australian coal and LNG.
As Trade Minister Don Farrell met Chinese Commerce Minister Wang Wentao in Abu Dhabi to discuss removing the remaining tariffs and restrictions on Australian wine, lobster and meat exports, Australian coal producers on Tuesday predicted strong demand “for decades to come”.
NSW coal export volumes hit more than 152 million tonnes last year, an increase of 6 per cent, and would have been higher if shipments to Japan and South Korea were not restricted by weather-related impacts on the Hunter rail coal chain and Port of Newcastle.
READ MORE: Forrest lambasts fossil fuel industry of pushing nuclear | Commonwealth to pay $900m to coal generators | New power needed before coal retires: EnergyAustralia |Exports of NSW thermal coal increased by nearly 8 per cent.
Before Beijing imposed bans on Australian exports during the pandemic in 2020 as it waged a one-way economic and diplomatic war against the Morrison government, NSW coal exporters sent 35.7 million tonnes of coal to China in 2019 and 28.9 million tonnes in 2018. After restrictions on coal were lifted last year, NSW coal exporters sent 36.7 million tonnes to Chinese importers.
Lower NSW coal exports to Japan and South Korea were offset by increased coal exports to other markets in Southeast Asia where coal-fired power plants continue to be deployed. NSW coal exports to Taiwan increased to almost 21 million tonnes, with four million tonnes shipped to Vietnam.
NSW Minerals Council chief executive Stephen Galilee said “coal is NSW’s most valuable export, and as coal export volumes recovered last year, so did the industry’s contribution to the NSW economy”.
“Over the same period, the NSW coal sector increased its spending in NSW, and also delivered record royalty payments to the NSW government,” Mr Galilee said.
The NSW and Queensland budgets are being propped up by coal royalties, with Labor state governments imposing higher royalty rates on miners. The Minns government last year forecast mining royalties would pump $13.2bn into the state’s coffers, including $2.7bn from higher royalty rates introduced from July 1.
The Queensland government, which pocketed $15.3bn in coal tax royalties in 2022-23, has been warned by miners that $100bn of investment and expansion plans could be put on hold because of Cameron Dick’s new coal tax regime. Queensland budget papers predict coal exports to grow 5 per cent in 2023-24 and 8.25 per cent in 2024-25.
Queensland Resources Council chief executive Janette Hewson said “coal makes an enormous contribution to Queensland’s economic prosperity and global demand for our high quality coal will remain strong for decades to come”.
“Last financial year, Queensland coal producers generated over $80bn for the state economy and contributed $15.3bn in royalties to help deliver hospitals, roads and schools for Queenslanders,” Ms Hewson said.
Ahead of the October state election, Ms Hewson said Steven Miles’ government must work with the “state’s biggest export industry so that our existing operations are competitive and to attract investment in new projects”.
In his valedictory speech in parliament on Tuesday, former prime minister Scott Morrison said “the 2022 election may have provided an opportunity for Beijing to step back from their failed attempts at coercion but we must not be deluded: tactics change but their strategy remains the same”.
“We are not alone in waking up to this threat. Investors are now pricing the risk of their investments in an authoritative communist China, while consumer advocates are waking up to human rights abuses and the environmental degradation that infects these supply chains,” he said.
After meeting his Chinese counterpart on Monday, Senator Farrell said Beijing had committed to fast-tracking its review into wine tariffs and “we would get a result by the end of March”.
“We want the bans lifted in the timeframe we discussed … if we don’t get them lifted, we will resume our World Trade Organisation disputes,” Senator Farrell told the ABC.
China says its five-month review into tariffs on Australian wine will be finalised on March 31.
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