Whereas unofficial limits are sometimes imposed in China as a mechanism to assist its home mining business, commodities analysts mentioned there have been issues out there that Australian coal was being singled out. It’s unclear whether or not these newest cargo deferments are as a consequence of import quotas or geopolitical tensions, and whether or not the most recent bans are aimed toward Australian merchandise or all overseas coal.
“It could be regarding if the rumours are true relating to an import restriction for Australian coal into China,” Mr Henry mentioned.
China is the highest importer of Australian coal, accounting for 27 per cent of Australia’s metallurgical coal previously monetary yr, and 20 per cent of thermal coal.
Australian thermal coal has beforehand been focused by Beijing for diplomatic causes, together with in 2019 with lengthy port delays, and earlier this yr when 5 state-owned energy turbines have been verbally informed to prioritise home coal and Russian and Indonesian imports as an alternative. Cargoes of metallurgical coal have been thought-about extra resistant to commerce bans as a result of Chinese language steelmakers rely extra closely on abroad suppliers.
Mr MacKenzie mentioned he was “not overly involved” in regards to the affect of commerce tensions on demand for BHP’s merchandise, however was extra involved in regards to the affect on the financial cycle and world progress.
“Our concern round a few of these geopolitical tensions and commerce wars which are occurring is the affect it might have on world progress, and in a post-COVID world, that most likely has much more concern,” he mentioned.
Commerce Minister Simon Birmingham mentioned he was looking for data from Chinese language authorities in response to the most recent studies of import restrictions however has performed down the potential affect of diplomatic causes.
“We take the studies critically sufficient definitely to attempt to search assurances from Chinese language authorities that they’re honouring the phrases of the China-Australia Free Commerce Settlement and their World Commerce Organisation obligations,” he mentioned this week. “This isn’t the primary time in recent times that we have seen some potential disruption to the timing and sequencing of exports of coal particularly into China.”
BHP chief government Mike Henry revealed in August the corporate was looking for to exit thermal coal – the heaviest-emitting gas and the topic of accelerating political and investor stress globally as a consequence of its contribution to world warming – by promoting its property in Australia and Colombia amid portfolio clean-up. However BHP intends to retain the vast majority of its metallurgical coal mines, which it believes will face better demand sooner or later as steelmakers search to decarbonise utilizing higher-quality, less-emitting coal, whereas world metal demand will increase.