China coal import ban 'catastrophic' for small Indonesian miners

China's proposed ban on imports of low calorific value thermal coal will have a severe impact on small producers in Indonesia, the world’s biggest exporter of coal for power stations, experts say.

According to analysts quoted Wednesday by FT.com (subscription required), Beijing’s decision, however, will barely hit large companies as they have “the ability to blend lower and higher grades of coal in order to meet the possible new Chinese requirements and have ready access to other potential markets such as India.”

Smaller coal miners don’t have such flexibility and are already under financial pressure coming from falling prices and their rather higher costs.

However, provisional data from the Indian government shows Indonesia may be getting the life jacket it needs to keep afloat its coal exports rate.

India, which is the world's fourth-largest coal importer, bought about 50% more last April over a year ago, as growing demand and cheap prices, Reuters reports today.

Beijing’s announcement has sparked a battle of word between two of China’s most powerful energy lobbies, says the British newspaper in another article:

At stake, claims the coal mining industry, are thousands of jobs and the future of one of China’s largest industries which has already seen at least 10%t of its coal mines shut down in the last year.

The debate on coal imports comes as China is locked in a trade dispute with the U.S. and the European Union over alleged solar-power equipment subsidies. This battle took another twist last week, when Beijing launched a probe into whether EU wine is being unfairly subsidized and dumped in the Chinese market.

Image of children working in coal mines via Flick