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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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Monday, 21 December 20
COAL'S PARTIAL RECOVERY IS SET TO FADE AFTER 2021 - IEA
Global coal consumption is estimated to have fallen by 7%, or over 500 million tonnes, between 2018 in 2020. A decline of this size over a two-year ...
Monday, 21 December 20
A REBOUND IN GLOBAL COAL DEMAND IN 2021 IS SET TO BE SHORT-LIVED, BUT NO IMMEDIATE DECLINE IN SIGHT - IEA
After a major drop in recent years, global coal demand is forecast to rise by 2.6% in 2021 before flattening out to 2025
A global ec ...
Friday, 18 December 20
AUSTRALIA PM WARNS OF ‘LOSE-LOSE’ IN ANY CHINA COAL SHIFT - REUTERS
Australian Prime Minister Scott Morrison said any shift by China away from importing high quality Australian coal would be a “lose-lose&rdquo ...
Friday, 18 December 20
BIG OIL AND COAL EXPORTERS FACE RECKONING AS PARIS AGREEMENT TURNS FIVE - CNA
On Dec 12, more than 70 global leaders came together at the UN’s Climate Ambition Summit, marking the fifth anniversary of the Paris Agreemen ...
Friday, 18 December 20
SOUTH AFRICAN COAL EXPORTERS LARGELY DEPENDENT ON THE ASIAN MARKETS - BANCHERO COSTA
South Africa is the fourth largest exporter of coal in the world, after Australia, Indonesia and Russia. In calendar 2019 the country exported a to ...
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- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Ministry of Mines - Canada
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- PTC India Limited - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
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