BEIJING: China's coal trade with Australia still has "huge potential", increasing domestic production, imports from Russia and an emphasis on an uncompetitive price could potentially lift its unofficial ban on the world's biggest buyer.

In late 2020, as tensions escalated between Beijing and Canberra, China imposed an informal ban on Australian coal, effectively ending imports from the country's once-important supplier.

However, as tensions begin to ease amid concerns that global coal supplies could harden as the impact of Western-led sanctions on Russian energy exports, some Chinese bureaucrats are reportedly proposing that Senior leaders lift the ban.

There is a ton of potential for coal trade between Australia and China, according to Joe Clarke, an associate editor at commodity and energy pricing agency Argus Media.

After a few years of sporadic diplomatic and business contact, it is possible to lift the ban, and the rhetoric favors it. Senior ministers of the new Australian government met with their counterparts in Beijing.

Top diplomats from the two countries last held talks in 2019 during a meeting between Australian Foreign Minister Penny Wong and her Chinese counterpart Wang Yi earlier this month.

A list of four "actions" provided by Wang for Canberra to help improve its relations with Beijing, including being a "partner rather than rival", was swiftly rejected by Australian Prime Minister Anthony Albanese. was done.

These restrictions on Australian goods are unnecessary, and they should all be lifted, Albany said in an interview with Sky News. According to the statement, the removal of all sanctions imposed on Australia is in the best interest of both China and Australia.
Albanese said he wants to work with China "where we can" and will protect Australia's interests "where we need to".
However, last week, when questioned on ABC's RN Breakfast radio program whether China would lift its ban on Australian coal, Trade Minister Don Farrell said it was "speculation at this stage".

I think we should wait and see about it." Obviously, from a business perspective, we'd love to see those restrictions lifted, but I believe it's a little too early to tell. How will the situation eventually turn out?

In October 2020, China was the first to stop allowing Australian coal imports. The trade was valued at US$382 million in September of that year, but had dropped to zero by early 2021, when several shipping vessels were abandoned off the coast of China.
Beijing called for increasing domestic coal production by approving new coal-fired power plants and ensuring energy security. The ban is believed to have played a role in China's total power shortage last year.

Chinese customs data shows China imported 5.3 million tonnes of Russian coal in June, an 11.2% increase from May. The June figure includes 2 million tonnes of thermal coal, which is used to generate electricity, and 1.7 million tonnes of coking coal, an essential component in the manufacture of iron and steel.

For many years, China has made significant investments in the infrastructure needed to move coal, particularly to reduce its reliance on imported energy. Beijing's determination to reduce its reliance on the world's energy markets will only strengthen in light of the recent market volatility.

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