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SYDNEY: Australia asked China on Tuesday (13 October) to clarify whether restrictions have been placed on the import of Australian coal, a potentially significant blow to Australia’s already struggling economy.
Trade Minister Simon Birmingham said he had asked through diplomatic channels whether China had instructed its companies to stop buying Australian coal, a business valued at about $ 10 billion a year, as political punishment.
“I have had discussions with the Australian industry and we are reaching out to the Chinese authorities regarding that speculation,” he told Sky News.
Birmingham stopped short of confirming that an unofficial coal embargo had been introduced, but its comments lend credence to rumors that have been swirling in the sector for weeks.
“I don’t want us to get ahead of ourselves in terms of speculation there, but we are working with the industry and taking action and having discussions there with China,” he said.
Several trade publications, including S&P Global Platts, have reported that Chinese state-controlled power suppliers and steel mills had received a “verbal notice” from the government to stop buying Australian coal.
It is the latest outbreak of a relationship that in recent months has been peppered with business disputes and spy scandals.
The Australian coal ban could have serious implications for the country’s resource-dependent economy, which is already in its first recession in nearly 30 years.
It would also be a blow to Australia’s conservative government, which has pushed environmental concerns aside to heavily promote the faltering coal industry in order to safeguard political support in key parts of the country.
Australian ministers have said they are struggling to establish contact with their Chinese counterparts as Beijing has frozen relations.
Their ties have soured considerably as China has become more aggressive in pursuing its interests abroad.
READ: Australian writer charged with espionage in Beijing, says China
After Australia called for an investigation into how the coronavirus outbreak started, Beijing responded by threatening Australian exports of wine, beef and barley.
Beijing also warned people not to visit Australia for study or tourism, a vital economic sector, citing anti-Asian racism in the wake of the pandemic.
Birmingham expressed hope that the coal problem would solve itself.
“In recent years we have seen that there is a pattern that has involved prior disruptions in the flow of Australian coal to China,” he said.
“But the market later rebounded as a result of a variety of different factors, including the application of some national quotas, apparently in the Chinese system.”
