Russia’s Push to Replace Aussie Coal in China an Empty Threat

Russian President Vladimir Putin and his Chinese counterpart Xi Jinping exchange documents during a signing ceremony following their talks at the Kremlin in Moscow on June 5, 2019. Alexander Zemlianichenko/AFP/Getty Images

Russia is planning to exploit trade tensions between Australia and China to move large quantities of its low-quality coal into the Chinese market and the rest of Asia.

Last week, Russian President Vladimir Putin met with industry executives and government officials to discuss plans for drastically increasing coal export to Asia by up to 30 percent, according to a Wood Mackenzie report obtained by The Australian.

Russian President Vladimir Putin meets with employees of the Ural Transport Machine-Building Design Bureau during a visit to the Ural Vagon Zavod factory in Nizhny Tagil in the Ural mountains, Russia, on Nov. 25, 2015. Alexei Nikolsky/Sputnik via AP

The report detailed a plan to increase Russian coal exports to an estimated increase of 34 million tonnes per year by 2024 and comes after Russia announced it would increase its domestic coal production up to 448-530 million tonnes annually until 2024 and up to 485-668 million tonnes annually until 2035 reports ResourceWorld Magazine.

Australian Strategic Policy Institute director Michael Shoebridge believes that Moscow’s plan is of little consequence to Australia’s coal export industry.

“Australian coal, like multiple other natural resources, remains a high quality, high volume, globally competitively priced product, with reliable supply,” Shoebridge told The Epoch Times in an email. “The effects on Australia are likely to be small.”

Shoebridge explained that Australia has an advantage in the coal market partly because of the nature of Australian coal reserves. The advanced mining technologies, also used by Australian resource companies, allow them to continue to supply high-quality products that are also consistently attractive to multiple foreign markets.

A coal dredger rips coal from the face of the Loy Yang Open Cut coal mine in the Latrobe Valley, 85 miles east of Melbourne. Paul Crock/AFP/Getty Images

The sentiment is supported by figures from the Australian Bureau of Statistics (ABS), which show that coal exports have stabilised since July of last year at around $3 billion per month.

Most notably, coal exports spiked at just under $3.7 billion in December of last year, which can be attributed to a global-market need for high-quality coal.

“While hard coking coal exports to China have diminished since mid-2020, increased exports to India, Japan and South Korea have offset some of the fall,” a media release by the ABS said.

Australia also has the added advantage of producing coal that does not require extra processing, which can add to the financial and environmental cost of using other coal sources.

University of Melbourne researcher Scott Hamilton, previously Executive Director Renewable Energy for the Victorian Government, believes that the primary issue of coal outside Australia is that it is of low-quality and contains pollutants and contaminents, which create the need for extra processing by the purchaser.

“Australian coal is cleaner coal than from elsewhere,” Hamilton told The Epoch Times on Tuesday.

Low-quality coal contains pollutants such as sulfur, which when burned produces sulfur dioxide—the primary culprit of acid rain and can contain mercury, arsenic, lead, chromium, and other harmful trace elements, as well as microscopic particles classified as “PM10.”

“In terms of Australian coal, because our level is very low in that area [sulfur dioxide], that’s not something that is required,” Hamilton said.

A coal-powered power plant on the outskirts of Linfen, in China's Shanxi Province, is seen belching smoke. Linfen is regarded as one of the cities with the worst air pollution in the world. Peter Parks/AFP/Getty Images

PM10—or Particle Matter 10—refers to those particles with a diameter of 10 micrometres or less, smaller than the width of a strand of hair. These particles are highly dangerous as they are small enough to be inhaled into the lower regions of the lungs and can lead to respiratory diseases such as cancer, Hamilton said.