China Free Trade Agreement Removes Tariffs on Australian Coal
Nov. 17 (Bloomberg) — A free trade agreement with China, the world’s biggest coal consumer, will help miners in Australia struggling amid a global glut.
A 6 percent import tariff on power-station coal will be eliminated over two years, while the 3 percent tariff on steelmaking coal will be removed on the first day, according to an e-mailed statement today from the Australian government. The agreement was announced today after Chinese President Xi Jinping addressed Australia’s parliament in Canberra.
The removal of the tariffs, designed to protect struggling Chinese mines, will help bolster margins of producers in Australia. The trade pact also means tariffs will be abolished for Australia’s A$13 billion ($11.4 billion) dairy industry, while beef and sheep farmers will also gain.
Oversupply and slowing demand growth have depressed coal prices, forcing companies from BHP Billiton Ltd. to Glencore Plc to reduce costs and shutter mines.
To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Keith Gosman
