Australian coal has taken another hit after China announced it will institute import levies to support its ailing coal industry.
The snap decision will see tariffs of between three and six per cent introduced from October 15, according to Reuters.
The move is a surprise one for miners, after China brought in import taxes on coal, excluding metallurgical coal, at six per cent in 2005 before it eventually removed them altogether in 2007.
Yesterday the Chinese Ministry of Finance stated that imports of high quality and coking coal with be set at three per cent, while thermal coal will have an import tax of six per cent.
The move is reportedly in an effort to support the nation’s failing coal industry, and follows the Chinese Government’s announcement of a tightening of quality in its coal imports in September.
Currently around 70 per cent of Chinese coal mining companies are operating at a loss, according to China’s own Coal Industry Association, with its chair Wang Xianzheng stating that this is only likely to increase.
He went on to say more than half of Chinese coal companies are even struggling to pay their workers.
In 2012 China closed 628 smaller coal mines, enhanced technological efficiencies at 622 mines, and amalgamated 388 mines.
The nation also announced a plan to increase safety at its coal operations, after more than 3000 deaths were recorded in two years.
These conditions have created a storm for many of the smaller players that could not keep up with the tightening regulation, a falling coal price, and a focus on reducing the high levels of pollution in the country by closing coal fired power plants.
Wang said problems have been piling up for the sector.
His statements came on the back of China’s ministry of Industry and Information Technology stating that coal was one of China’s poorest performing sectors this year, as profits in the industry fell 43.9 per cent in the first five months of 2014.