Breakthrough as China prepares to take Australia’s first official shipment of coal in more than two years
- China importing Aussie coal after an official two-year ban
- Shipment of coking coal arriving in February, state media says
- Follows the thawing of relations between the two nations
China is set to take its first official shipment of Australian coal in more than two years, according to state media.
About 72,000 tons of coking coal from Australia is expected to arrive at Zhanjiang Port in south China’s Guangdong Province on February 8, according to the government-run publication Global Times.
It’s one of the most significant steps in the thawing of relations between the two nations since the Albanese Labor government was elected, after China boycotted Australian products as part of a bitter rift with the preceding Morrison government.
Australia has sent its first export shipment of coal to China in over two years (pictured, coal heaped at Newcastle’s port in NSW)
The coal shipment left North Queensland’s HPCT wharf on January 24.
The coking coal will be delivered to a steel-making factory, according to the Global Times.
By coal export standards the shipment is a modest amount and the Global Times warned ‘it will take time for more Chinese companies to regain confidence in the Australian side’.
As long as the Albanese government stays on the right side of Beijing, China is likely to start importing greater amounts of Australian coking and thermal coal as it looks to broaden its suppliers.
It is believed three major power providers in China have been given the go-ahead to import Australian coal.
The first shipment of Australian coal in two years is set to arrive in China later in February (pictured, coal vessels off Hay Point in Queensland)
‘There should be more coal coming to China in the rest of the year from sources such as Australia, particularly in March, as demand was unleashed after steel plants resumed production after the Spring Festival holidays,’ a buyer told the Global Times.
However, the current high price of coal and sluggish demand in China means the trade may take some time to pick up from where it left off.
In 2019, Australia exported around $13.7bn worth of coal to China.
But the sudden refusal in 2020 to take Australian coal led to coal vessels having to turn back while at sea.
Meanwhile, Australia diversified by finding other international buyers.
Chinese President Xi Jinping met with Prime Minister Anthony Albanese last year in a sign of the improving relations between the two nations following Beijing’s displeasure with the Morrison government
The nation’s combined coal exports, including coking and thermal coal, are forecast to earn $132billion in 2022-23, overtaking iron ore as Australia’s single most lucrative export.
In 2022, China imported 63.838million tons of coking coal, with the major suppliers being Mongolia, Russia and Canada.
The Albanese government promised to take a different tack in its China relations compared with the Morrison government, which fell foul of Chinese President Xi Jinping.
The rift was over various issues including Australia’s call to investigate the origins of Covid and stronger rhetoric from Canberra warning of China’s aims in the region and its territorial claims in the South China Sea.
A major turning point was signaled when Prime Minister Anthony Albanese had an unscheduled meeting with Xi on the sidelines of the G20 Summit in Bali last November.
It marked the first such meeting of Australian and Chinese national leaders in six years.