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Thursday, 17 December 20
CHINA'S BAN IS LESS OF A THREAT TO AUSTRALIA'S COAL INDUSTRY THAN INTERNATIONAL CLIMATE AMBITION - IEEFA
 Australian coal exporters will survive this near-term political fight but there are longterm structural headwinds
The decision by China’s National Development and Reform Commission to formally and indefinitely block Australian coal imports is a key threat to Australia’s political and economic wellbeing. Australia can never expect to win a trade war with its biggest export partner, and it is sheer political and economic suicide to try to do so. But is it devastating for the Australian coal export industry? Not at all.
Far more strategically threatening in the long term for Australia and our coal industry is the pledge by China’s president Xi Jinping to reach net zero emissions by 2060, which was rapidly followed by net zero emissions by 2050 pledges from Japan’s prime minister Yoshihide Suga and South Korea’s president Moon Jae-in. This series of sudden and powerful pledges of increased climate ambition by world leaders is likely to be terminal for our coal exports if we look out a couple of decades.
Australia is caught in the geopolitical quandary of having China as our key trade partner and the United States as our key military ally. When US president Donald Trump started a trade war with China, it was never going to turn out well for Australia. And incoming president Joe Biden is unlikely to change tack too materially where China and trade and technology are concerned (whereas on climate, Biden’s arrival changes everything). But we in Australia are like a mouse caught in the middle of two sparring elephants.
In business, the best rule is that the customer is always right (even if they are not). Our coal exporters will however survive this near-term political fight, probably far better than our wine or lobster export industries, by comparison.
There are no coal ships destined for China being loaded in Australia now. For most industries, that would be devastating. For coal, not so much. In fact, a look at the share prices of Whitehaven Coal and New Hope Corporation would suggest quite the opposite. Since the September 2020 trough, and acknowledging the sharp price falls on Tuesday, Whitehaven shares have rallied 70% and New Hope are up almost 20%.
Why? Coal is coal, at least to a finance analyst like me, if not an engineer. Australia sells the vast majority of its coal to Japan, South Korea and Taiwan. And if China buys more Russian, South African and Indonesian coal to replace Australian coal, then we can, by and large, simply swap customers, maybe with a month’s disruption. Total demand doesn’t change, nor does supply – at least not in the near term. Sure, there are some boiler and blending constraints, but notwithstanding coal luddite claims that Australia’s coal is slightly less carbon polluting than someone else’s seaborne coal, the minute difference is irrelevant – all coal is almost 100% more carbon intensive than wind, solar, hydro, nuclear or energy efficiency. Or green ammonia, as Japan’s JERA is now thinking.
The coal industry is actually benefiting from a near-term relief rally. In September Australian coal exporters were losing money with every tonne of coal they exported. In December, the picture is very different. China’s key Shanxi province has just shut down coal production near term due to a spate of deadly accidents, just as winter heating demand has kicked in. Meanwhile the Chinese industrial economy is powering along. So the Chinese domestic thermal coal price has jumped 35% to 740/t yuan in the last three months. Seaborne thermal coal prices have rallied from a low of US$46/t to over US$70/t in the same timeframe. Even as total volume of Australian coal exports have dropped in the December quarter, the value has surged, and more importantly, the profitability much more so (notwithstanding the 10% rally in the Aus$/US$, lifted by the unprecedented rally in iron ore prices). Hence the Whitehaven Coal and New Hope increase in share price.
The coal export sector outlook seems profitable again – in the near term. But the 25% collapse in the Dalrymple Bay Coal Terminal share price since its initial public offering last week is a clearer perspective of the longterm structural headwinds Australia’s coal industry is facing. Far better for our Hunter Valley, La Trobe Valley and Bowen Basin communities that we as a nation acknowledge the science of climate change, prepare a national roadmap, ideally with a destination and time of arrival clearly acknowledged.
The investment, employment and export opportunities for Australia are enormous, and exciting. To steal a very good line from Ross Garnaut and Mike Cannon-Brookes – better we focus on building Australia as a renewable energy superpower.
This commentary first appeared in The Guardian.
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Tuesday, 22 December 20
INDIA'S COAL DEMAND IS SET TO EXPAND DESPITE PLUMMETING IN 2020 - IEA
Coal consumption in India amounted to 979 Mt in 2019, with the largest share being thermal coal (including lignite) for electricity generation (687 ...
Tuesday, 22 December 20
SOUTHEAST ASIA'S COAL DEMAND IS SET TO EXPAND AFTER THE PANDEMIC-INDUCED HIATUS IN 2020 - IEA
Coal consumption in Southeast Asia has more than doubled in the last decade, with the largest growth in Indonesia and Viet Nam, followed by Malaysi ...
Tuesday, 22 December 20
COAL DEMAND IS RISING QUICKLY IN PAKISTAN AND MORE SLOWLY IN BANGLADESH - IEA
Pakistan had 150 MW of installed coal power capacity in 2015. Since 2017, in addition to a few small plants for industry, Pakistan has commissioned ...
Tuesday, 22 December 20
AFRICA PERSPECTIVE INDICATES NO MAJOR SHIFTS FOR COAL CONSUMPTION - IEA
Overall countries on the African continent consumed 197 Mt of coal in 2019, 12 Mt less (-6%) than 2018.
South Africa, the continent& ...
Monday, 21 December 20
COAL PRICES WITHSTAND DESPITE COVID-19 AND CHINESE IMPORT QUOTAS - IEA
Coal prices vary by region as well as by grade and quality. The price rebound starting in 2016 ended in 2018, moving in a downward trend in 2019. A ...
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- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Orica Mining Services - Indonesia
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