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