SYDNEY/BEIJING (Reuters) – Australia’s prime minister sought to ease fears on Friday of a further rift in ties to China following concerns of a ban on coal imports at the northern port of Dalian, as coal stocks pared early losses and the local dollar steadied.

FILE PHOTO: An Aurizon coal train travels through the countryside in Muswellbrook, north of Sydney, Australia, April 9, 2017. REUTERS/Jason Reed/FilePhoto

The Australian currency dropped more than 1 percent to a 10-day low of $0.7070 on Thursday after Reuters reported that customs at the Chinese port had banned imports of Australia’s biggest export earner since the start of February.

China is the largest buyer of Australian coal, taking 89 million tonnes last year, worth A$15 billion ($10.7 billion), according to data from the Australian Bureau of Statistics.

Dalian’s move came after major ports elsewhere in China prolonged clearing times for Australian coal and stoked concerns that China is using trade to punish Australia amid a recent souring of bilateral ties.

However, Morrison said on Friday there was nothing to suggest the move was out of the ordinary. The country has asked its ambassador to China to seek urgent clarification.

“People should be careful about leaping to conclusions about this. This is not the first time that on occasion local ports make decisions about these matters,” Morrison told reporters in Auckland.

Tensions arose in 2017 when Canberra accused Beijing of meddling in its domestic affairs, and the relationship suffered another setback last year when Australia banned China’s Huawei from its 5G broadband network.

Australia’s Minister for Trade, Simon Birmingham, said delays to exports of coal to China were caused by import quotas and not a blanket ban on Australian coal.

“We have no basis to believe that there is a ban on Australian coal exports into China, or into any part of China,” Birmingham told reporters in Adelaide.


This is not the first time China has restricted coal imports. The country has periodically imposed customs delays and quality controls on imports over the past several years, juggling efforts to curb smog, cut coal use, balance imports against domestic production and protect jobs.

Dalian would ban imports of all Australian coal indefinitely and limit coal imports from all sources to 12 million tonnes in 2019, a port official told Reuters on Thursday.

A manager at Beibu Gulf Port Group, which operates the Fangchang port and two other harbors in southern Guangxi region, said on Friday the port had no ban on Australian coal.

“For now, Australian coal can clear customs,” he said, declining to be named because of company policy.

However, Australian coal, which accounts for more than half of the port’s 18 million tonnes of imports each year, was taking longer to clear customs, he said, adding that official policy on Australian coal was “very fuzzy”.

An official at Guangzhou Port Group Co. Ltd referred Reuters to customs when asked about Australian coal imports.


Shares in Australian coal miners fell on Friday amid broad weakness in the resources sector, but losses eased in afternoon trade.

Stanmore Coal, which said it was monitoring the situation, slipped more than 7 percent at one point and New Hope Corp fell more than 4 percent. Whitehaven fell more than 4 percent and Yancoal 3 percent, even though both miners said they were not impacted directly.

The Australian dollar steadied, boosted by upbeat central bank comments on the economy and government comments on the ban, but was still holding most of its losses from Thursday.

Reserve Bank of Australia Governor Philip Lowe told a parliamentary committee that coal restrictions may have been driven by concerns about the environment or the profitability of local industry.

“There are other markets in the world for Australia’s coking coal … it will find another market, perhaps at a lower price,” Lowe said in response to questions.

A Chinese foreign ministry spokesman said on Thursday that customs were inspecting and testing coal imports for safety and quality, and the move was “completely normal”.

Reporting by Colin Packham in Sydney and Muyu Xu in Beijing; additional reporting by Melanie Burton and Sonali Paul in Melbourne; editing by Richard Pullin


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