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China looks to ease ban on Australian coal imports

Thursday, January 5th, 2023

China is reportedly close to partially lifting its unofficial ban on Australian thermal and coking coal imports.

China is reportedly close to partially lifting its unofficial ban on Australian thermal and coking coal imports, in a further sign of improving relationships between the two countries.

The move comes as China is looking to expand its options for obtaining more coal for its power and steel plants amid disruptions caused by the Russia–Ukraine war.

Reports indicate China will partially lift its two-year ban on Australian coal and allow three central government-backed utilities and the country’s top steelmaker to resume imports.

According to two people familiar with the matter, China’s National Development and Reform Commission held talks this week on proposals to allow four major importers – China Baowu Steel Group Corp.China Datang Corp.China Huaneng Group Co. and China Energy Investment Corp. – to make new purchases in 2023.

Those purchases could start as early as April 1, the two people said.

News of the partial easing of the ban on coal imports comes after Australian and Chinese foreign ministers met last month in an effort to improve tense diplomatic relations between the two countries.

China imposed heavy restrictions on importing Australian commodities – coal chief among them – in late 2020 amid escalating hostilities driven by disagreements over public health matters relating to the origins of the coronavirus.

Australia had been China’s second largest coal supplier prior to the ban.

Despite the ban on sending the commodity to China, coal has outpaced iron ore as Australia’s top export earner. The ongoing energy crisis has pushed prices to historical highs and Australia’s combined coal exports, which includes metallurgical coal and thermal coal, are forecast to earn $132 billion in 2022–23.

“Many Western nations are having to pay substantially more for energy, on the high chance that sanctions on Russia will see some Russian production – particularly gas and coal – become stranded from world markets,” the Australian Government’s Resources and Energy Quarterly: December 2022 stated.

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