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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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- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Australian Coal Association
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
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