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