Chinese state-owned media appeared to confirm a ban on imports of Australian coal this week. Australian officials are now trying to figure out how serious the threat is, and its implications. If China stops taking Australia's coal, will other countries fill the gap? Could Japan, India and South Korea?
A state-owned tabloid in China, The Global Times, this week reported China's top economic planner was allowing the country's power plants to import coal without clearance restrictions from several countries "except for Australia."
It appears to confirm that the unofficial ban China placed on Australian coal imports in recent months has become official.
It's part of rapidly escalating trade tensions that have seen China slap restrictions on a range of Australian imported goods including barley, wine, meat, and lobster.
Australia's Government is still mulling the development, and it is unsure what type of coal is in the firing line.
But Simon Birmingham, the Trade Minister, says if the story is accurate it would appear China is using discriminatory trade practices against Australian imports.
He has reminded China of its obligations under international trade rules.
How much coal is involved?
In 2019, Australia exported $64 billion worth of coal.
Japan was Australia's largest customer, accounting for 27 per cent of our total coal exports (worth $17 billion).
China came in second, accounting for 21 per cent of our coal exports (worth $13.7 billion).
India was third, accounting for 16 per cent of our coal exports (worth $10.5 billion).
However, Australia exports two types of coal — thermal coal and metallurgical coal — and the value of each export is different.
Thermal coal is the type used to generate electricity.
Australia is the world's second-largest thermal coal exporter, accounting for 20 per cent of the world's supply (behind Indonesia, which accounts for 41 per cent).