China coal cull won’t hurt us, says Keith Pitt

The outlook for Australian coal is positive despite China no longer funding the construction of overseas coal-fired power stations, Resources Minister Keith Pitt says.

Keith Pitt says he expects global demand for coal to ‘continue to rise’. Picture: Martin Ollman

Resources Minister Keith Pitt says the outlook for Australian coal producers is positive despite China announcing it will no longer fund the construction of overseas coal-fired power stations.

Mr Pitt said he expected global demand for coal to “continue to rise”, noting there were 100 gigawatts of coal-fired generators under construction in China.

“Australia will be well placed to fill that demand,” Mr Pitt said.

He added that metallurgical coal was selling at record high prices of $US362.9 a tonne.

Minerals Council of Australia chief executive Tania Constable said China’s move “ignores the significant investments made in recent years in fossil fuel power generation”.

‘These new plants have long lives and it is imperative that governments and industry step up ­efforts to support, develop and deploy abatement technologies like carbon capture use and storage to mitigate the emissions of these plants and new plants still in construction,” Ms Constable said.

“These technologies are developing rapidly and will be critical for global decarbonisation.

“The latest Global CCS Institute report says there are 65 commercial CCUS facilities in various stages of development globally. More of this is what’s needed both to­ ­reduce emissions and continue to allow countries a full suite of ­energy options.”

Independent economist Saul Eslake said he did not think Australia would be impacted by the announcement, given most of the nation’s coal exports go to Japan, India and Korea.

“I doubt that the Chinese would have been financing coal-fired power stations in Japan, Korea or Taiwan. And they probably would not have been financing them in India either,” Dr Eslake said.

Grattan Institute director Tony Wood said Chinese funding for overseas coal projects was mostly in Africa and small Asian markets.

“They are talking about small or emerging economies,” Mr Wood said. “So my suspicion is it would have a pretty small impact, if any, on Australian exports.”

Mr Wood said the most important part of the announcement was the signal it sent to the world about the future of coal.

“They are sending a pretty clear message they are going to try to manage their own international profile on climate change,” he said.

Mr Wood said most of the new coal-fired power generators being built in China were replacing old ones that had high pollution levels.

“That I suspect is going to continue because they can keep shutting down old coal-fired power stations and building new ones,” he said. “And probably the world would be better off.”

Coalmining added $33.8bn to the national economy in 2019-20, and directly employed nearly 40,000 Australians, according to ABS data.

Scott Morrison and Anthony Albanese both argue that coal should continue to be mined in Australia while there is a market for exports. But Greens leader Adam Bandt said Labor and the Coalition were selling “false hope” to coal communities.

“China’s move is just the latest in a global race to the top on climate action, but it’s another race Liberal and Labor are setting Australia up to lose,” Mr Bandt said.

“Scott Morrison’s 2030 targets are a death sentence and Labor has no 2030 targets at all.”

Ai Group climate and energy chief Tennant Reed said China’s policy would ensure the Belt and Road Initiative was not used to fund coal projects in emerging markets. “They have been trying to clean up their act … for a little while,” Mr Reed said.