The Chinese Government has announced a tightening of the quality of its coal imports, which may have flow on effects to Australian coal miners.
China’s National Development and Reform Commission has issued new proposed guidelines dealing with import restrictions at different coal quality threshold levels.
This move was first telegraphed last year, after China’s National Energy Administration drafted regulations to ban the import and domestic delivery of poor quality thermal coal.
Under the initial drafts the regulations would ban coal with a net calorific value of 4540 kilocalories per kilogram or less, which would favour Australian coal at the expense of our main coal competitor Indonesia.
According to sources the government will limit the use of imported coal with more than 40 per cent ash and three per cent sulphur in from the start of next year.
Sources close to the matter also told Australian Mining that the new quality restrictions may also be brought in for domestic suppliers as well.
The move is part of the nation’s push towards cleaner air as China suffers under heavy smog and pollution.
On top of the quality thresholds there is also mention of slashing coal imports themselves by around 50 million tonnes over the coming 12 months.
Many have pointed to this having a major affect on Australian coal producers, particularly in the NSW Hunter Valley and the already embattled Illawarra region.
However these concerns have been dismissed by the Minerals Council of Australia, who termed much of the current media response as “misleading and unnecessary alarmist”.
“There is nothing in the information which suggests that Australian coal exporters will be disadvantaged and we are confident that we can meet the proposed specifications,” MCA executive director for coal, Greg Evans, said.
Much of this is due to the higher quality levels of Australian black coal, with the MCA adding the main impact will be on brown coal (which Australia does not export) and low quality domestic black coal.
The NSW coal miners themselves are currently investigating the impacts of the decision, with BHP president of coal Dean Dalla Valle stating that BHP “supports efforts to improve environmental standards”.
“We expect to be capable of meeting the proposed NDRC regulations, which stipulate a range of quality limits for both domestic and imported coal, should they be finalised and implemented, and do not anticipate a material impact to our business.”
Rio Tinto echoed BHP's statements, saying:"Rio Tinto is supportive of the Chinese Government's focus on improving environmental standards."
"Coal will remain central to providing enough energy generation to support social and econmic development in China and Asia for decades to come.
"China's announcement to regulate coal equality will have little if any impact on Rio Tinto."
Glencore stated it is “currently reviewing the proposed Chinese coal import restrictions [and] as such, it is premature to comment further at this stage.”