Qld’s $10 billion coal trade with China could be about to return

Queensland’s $10 billion coal trade with China could be about to restart, amid reports Beijing is considering lifting its ban on the Australian resource.

Queensland’s $10 billion coal trade with China could be about to restart, amid reports Beijing is considering lifting its ban on the Australian resource.

Resources industry organisations have reported “positive vibes” and are cautiously optimistic there could be movement within the next fortnight.

But China may face a cool reception, with some in the resources sector noting strong relationships had been built in other parts of Asia and India which were now considered “stable, long-term customers” for Queensland coal.

There have been previous reports, including in July last year, that the ban was close to being lifted which did not eventuate.

Coal at the Port of Brisbane. Picture: AAP image/John Gass

Four Chinese companies – China Baowu Steel Group, China Datang, China Huaneng Group, and China Energy Investment – are said to be considering purchasing Australian coal from as early as April 1, according to reports in Bloomberg.

Two of these companies, Baowu and Huaneng Group, already have or have previously held interests in Queensland.

Share prices have increased for Queensland-based coal miner New Hope rose over the past 48 hours on the back of the news.

But New Hope customers have usually been based in southeast Asia, but not China.

China’s ban on Australian coal has lasted more than two years, unofficially coming in from November 2020 as relations between Australian and China deteriorated.

The latest trade data showed there was no Queensland coal exported to China in 2021-22, and just $1.6 billion coal was exported the previous year, off highs of more than $10 billion a year.

Industry sources have said that while political relations between Australia and China were – until recently – all but frozen, company-to-company contacts had continued quietly.

Queensland Resources Council's Chief Executive Ian Macfarlane. Picture: Zak Simmonds

Queensland Resources Council boss Ian Macfarlane said the industry welcomed any easing of import restrictions and that Queensland companies would look to rebuild export opportunities with Chinese customers.

“However, it is worth noting that increased exports to other countries, particularly India and in Asia, over the last two years have seen long term relationships built with these countries,” Mr McFarlane said.

“These alternative markets to China are now seen by Queensland coal exporters as stable, long-term customers for Queensland coal.”

A Minerals Council of Australia spokesman said the normalisation of relations between the two countries was a positive step, stating there had been “positive vibes” from the industry.

“We are cautiously optimistic. We’ll be watching what happens over the next week or two with this,” the spokesman said.

“We are committed to our existing customer base, too.”

A Department of Foreign Affairs and Trade spokeswoman said they were aware of the reports.

“It has been the Australian Government’s consistent view that the resumption of normal trade across the board between Australia and China would be in both countries’ best interests. That is true also of coal,” she said.

“Meanwhile, the Australian coal industry has been highly successful in finding alternative markets.”

A spokesman for Bravus mine, formerly known as Adani, said the death of coal had been predicted by activists, but that “this couldn’t be further from the truth”.

Relations between Australia and China have thawed since the election in May, including Prime Minister Anthony Albanese meeting with Chinese President Xi Jinping at the G20 in November and Foreign Minister Penny Wong flying to China in December for the first ministerial visit in more than three years.