Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Thursday, September 18, 2014

Australian export risk on China dirty coal ban

Australian coal exporters are scrambling to clarify the fallout from changes to China's coal import rules, which could expose the industry to billions of dollars in lost sales as China seeks to cut air pollution.

The Chinese government is to limit the use of imported coal with more than 16 per cent ash and 3 per cent sulphur from January 1, 2015, in a bid to improve air quality, especially in the major cities such as Beijing and around Shanghai.

At the same time, China is moving to force power utilities to slash coal import volumes, also with the stated aim of improving air quality, although this move will primarily give China's local coalminers a lift.

According to an analysis by Macquarie Bank, consultant Wood Mackenzie has indicated the Chinese ban could affect more than half Australia's thermal coal exports to China, although the ban is likely also to hit Indonesian coal exported to China.

"We all trying to sort out what is going on," one large coal exporter said on Tuesday. "The information has been fairly fluid.

"I'm not sure what the endgame is beyond driving more domestic production."

The Minerals Council of Australia said exporters could adapt to the changes.

As much as a quarter of all coal shipped through Newcastle goes to China at present, up from less than 10 per cent  a few years ago. Coal shipped through the port – the largest coal export port in the world – is running at about 170 million tonnes a year at present.

Australia exports an estimated 49 million tonnes of thermal coal a year to China, and a large part of this could be at risk with the ban.

Industry sources said the Chinese government moves were aimed at propping up its domestic coalminers as well as assisting its power generators amid the slowdown.

Part of the measures disclosed on Tuesday include slashing China's coal import volumes by 50 million tonnes over the balance of this year alone, which could hit the Australian industry hard, they said.

"Both the miners and the power companies are doing it hard in the slowdown, and the measures are aimed at giving both some room to manoeuvre," one industry source said.

"[Australian coal exports are] typically around 5500 kilocalories and 24-25 per cent ash. So we've got big problems," Bruce Jacques of IHS McCloskey Coal said.

Some coal producers might be able to reduce the level of ash by washing the coal to meet the tighter controls, although this involved additional cost and many producers would be unwilling to purse this option, he said.

"It is a quality and a quantity approach," Mr Jacques said of the new controls. "If one doesn't get you the other will."

Australian exporters had been wary ahead of the decision to impose the ban, since it appears to apply irrespective of the energy value of the coal, and gives exporters of low-energy coals such as lignite a free kick.

The fact that the tighter regulations apply to the three main urban conurbations of Beijing-Tianjin-Hebei, the Yangtze River Delta and the Pearl River Delta could mean that the some exporters will not be dramatically affected by the change.

"Generally that is a good thing because it just means there will be less pollution in the environment and most of the dirty coals come from Indonesia," businessman Clive Palmer said. "It will be good for Australian coals too because Australian coal has got a lot higher energy values, which means you need to burn less tonnes of it and it produces less emissions, so it is all good news for Australia and the world."

The Minerals Council of Australia hosed down any potential impact on Australian exports.

"There is nothing in the information released to date to suggest that Australian coal exporters will be disadvantaged and we are confident that we can meet the proposed specifications," Minerals Council executive director of coal Greg Evans said.

"We disagree with the assertion that the coal import restrictions proposed by China's National Development and Reform Commission will hit Australian exporters hardest.

"There is no evidence to suggest that Australian coal exports to China would be significantly affected if this proposal became law," he said.

"Australia is fortunate to have reserves of high-quality black coal, which will continue to be in strong demand from established and emerging markets, including China."

Original Article
Source: smh.com.au/
Author: Brian Robins

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