China has been forced to resume Australian coal imports after lifting Covid-19 limitations. This is to ensure that energy supplies are secure.
This is perhaps the best sign that they have reconnected.
Subscribe to The Daily Star’s Google News channel to receive the most recent news. It is also an opportunity to remind them of their economic interdependence, as Australia’s raw materials are crucial in supporting the export-oriented economy China. China is both the biggest consumer of coal and the most prolific producer.
After meeting for the first-time in six years, the Chinese and Australian leaders decided to make the move. This was notably following a shift in Australia’s ruling party in May. Penny Wong was the Australian Foreign Minister and followed it up with a trip to Beijing.
Beijing has adopted a two-pronged strategy to ensure coal security. This is because prices for coking and power fuels have soared following the Western sanctions that had halted Russian supply after Ukraine’s invasion.
Chinese steelmakers and utilities will have better access to Australian coal. Australia could also regain some market share that was lost to Russian and Mongolian suppliers.
According to Pat Markey (managing director of consultancy Sierra Vista Resources), “This may have been a result of the thawing relations between China, Australia and Australia given that new government in Canberra,” he said.
“Many miners would be delighted to have the chance to renew their commercial relationships with China for both metallurgical and thermal coal.”
China’s State Planner this week permitted three government-backed utilities, and the country’s largest steelmaker, to resume coal imports. China Energy Investment Corp placed an order for Australian coal, which may be loaded later in the month.