The move by the economic powerhouse to introduce the new duty of between 3% and 6% beginning Wednesday shocked and angered Aussie producers, responsible for a quarter of Chinese coal imports.
The Minerals Council of Australia’s Brendan Pearson said the decision was a poor one.
“The MCA urges the Australian government to initiate urgent discussions with Chinese counterparts to seek the reversal of the decision,” he said in a statement.
He said applying tariffs would ultimately prove “counterproductive” for the struggling Chinese economy anyway because it would “raise energy costs for China’s industrial sector and households.”
The move comes barely a week after Beijing announced a major overhaul of its current resource tax, adding that the new and simpler levy would be effective Dec. 1.
This week’s sudden announcement represents a second major blow for countries exporting coal to China, after last month Beijing imposed a ban on selling or transporting low-grade or “dirty” coal, putting further pressure on the global coal market.
Alarm over that policy – announced last month – faded after Beijing appeared to exempt power plants, the largest consumers of fossil fuel.
China’s dependence on coal is well known. Annual consumption exceeded 1 billion short tons per year in 1988 and has exploded since then, to about 4 billion tons last year. This means the Asian giant gets about 70% of its energy from the fossil fuel, a number the government hopes to reduce to 65% by 2017.
In the past three years Australia’s coal industry has experienced challenging times with prices for thermal coal, which consumed by power stations to generate electricity, dropping over 40%. More than 10,000 coal jobs have been lost in Australia since 2011 as companies slash costs and idle mines amid a global supply glut.