China’s ban on ‘dirty’ coal received with fear in Australia

 

China has announced it will be placing a ban on low-grade coal, causing alarm that it could jeopardise Australia’s lucrative coal exports.

China's powerful National Development and Reform Commission has flagged an import ban on certain low-grade coal from January 1 2015, in an effort to tackle crippling pollution in its major cities.

From next year, China will ban the sale or import of coal with an ash content of 40 per cent or higher and sulfur content or 3 per cent or higher.

Heavily populated areas will reportedly face even stricter regulations.

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According to the Wall Street Journal, this new regulation is aimed at low-grade coal mainly arriving from Indonesia and Australia.

The announcement was received with fear that such a move would bring a halt to Australia’s current lucrative export dealings with its largest trading partner.

But Australia’s peak mining body has dismissed suggestions that a Chinese ban on ‘dirty’ coal would devastate Australia's multi-billion dollar exports to the Asian economic powerhouse.

The Minerals Council of Australia said the reporting of China’s draft guidelines for coal use had been ‘misleading and unnecessarily alarmist’.

The council's executive director Greg Evans said there was no information to suggest Australian coal exporters would be disadvantaged.

“The main impact of this development in China appears to be on brown coal or lignite, which Australia does not export and low quality domestic black coal,” he said in a statement.

Evans said this kind of coal related only to small-scale use, not the coal used for large-scale power plants or other industrial use.

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The council anticipates demand for Australia's high-quality thermal black coal to remain strong in China - which currently rakes in $2.7 billion annually.

Figures from the Department of Foreign Affairs and Trade show Australia exported $9 billion worth of coal to China last year.

The Asian country is the world's largest consumer of coal, accounting for around half of global consumption, using about 3.5 billion tons a year, according to the China Coal Industry Association.

But Australia will also look to emerging economies, particularly India, to offset any decline in Chinese imports.

With inputs from AAP.