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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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Thursday, 17 December 20
BUMA SIGNED US$1.0 BILLION WORTH OF EXTENSION CONTRACT WITH BERAU COAL
PT Bukit Makmur Mandiri Utama, subsidiary of PT Delta Dunia Makmur Tbk., has extended its mining services contracts with PT Berau Coal, in relation ...
Wednesday, 16 December 20
INDONESIA 2020 COAL CONSUMPTION ESTIMATED AT 140-145 MLN TONNES - OFFICIAL, REUTERS REPORTED
Indonesia’s domestic coal consumption is estimated at 140-145 million tonnes this year, Dodik Ariyanto, an official at the energy ministry, t ...
Wednesday, 16 December 20
RUSSIA REVISES DOWN EXPORT EXPECTATION - FITCH
The Ministry of Economy of Russia, the world’s third largest thermal coal exporting country, released its annual forecasts ...
Wednesday, 16 December 20
INDIAN COAL IMPORTS TO REMAIN SUBDUED - FITCH RATINGS
Fitch Rating commented on Indian Coal Imports, Fitch said, coal imports by Indian utilities fell by about 24% yoy to 44 million tonnes (mt) i ...
Wednesday, 16 December 20
CHINA TO BOOST DOMESTIC SUPPLY - FITCH
China’s benchmark Qinhuangdao 5,500kcal/kg coal price rose above the government’s upper yellow interval of CNY600/tonne in early Octobe ...
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- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Australian Coal Association
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- Bhatia International Limited - India
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- The University of Queensland
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
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