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JAKARTA – China plans to buy around US $ 1.5 billion (S $ 2 billion) of coal from Indonesia after agreeing to a new three-year supply pact, a move that has the potential to further weaken trade ties with the rival supplier. Australia.
Indonesia will seek to increase coal exports to China starting in 2021 and aims to attract investment in processing technology development, according to the Indonesian Coal Mining Association, which on Wednesday signed a memorandum of understanding with the China Transportation Association. and Coal Distribution.
Further discussions on export volumes will take place, according to the Indonesian association statement.
The value of Indonesia’s coal exports to China fell to $ 4.9 billion between January and September due to weaker demand, from $ 5.8 billion in the same period in 2019, according to the statement.
The deal comes as relations between China and Australia deteriorate. China has blacklisted a variety of Australian commodities as the diplomatic row between Beijing and Canberra worsens.
Tensions between the two trading partners have escalated since Huawei Technologies was banned from building Australia’s 5G network in 2018.
Chinese power plants and steel mills were ordered to stop using Australian coal and ports were ordered not to unload the fuel, Bloomberg News reported in October.
In another move that will unease Australian exporters, China will impose anti-dumping duties of more than 100 percent on Australian wine starting this weekend, the latest sign of worsening trade tensions between the two nations.
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