An Australian mining firm has signed a record $60-billion deal to supply coal to energy-hungry China for the next 20 years.
The deal is the biggest-ever export contract in Australia’s history, said Clive Palmer, chairman of Resourcehouse, which will supply China Power International Development (CPI) with 30 million tonnes of coal every year.
The deal underscored China’s increasing push to secure resources overseas and the revival of the energy and manufacturing sector in the wake of the slowdown, said analysts.
The country’s State-run firms have in the past year struck a number of deals with resource-rich Australia, which has become China’s biggest supplier of coal imports.
Saturday’s deal surpasses the $41.3-billion contract signed in August by PetroChina for access to liquefied natural gas from Western Australia, which was then the biggest trade deal in Australia’s history.
China relies on coal for as much as 70 per cent of its energy needs, and is the world’s biggest consumer of coal. Though the government has stepped up investments in renewable energy in recent years, it still accounts for only 7 per cent of the country’s energy requirements. With soaring energy demands, China, in 2008, became a net importer of coal for the first time.
China’s trade with Australia has risen sharply in recent years. Bilateral trade touched $65.6 billion in 2008-09. Exports, mainly iron ore and coal, amounted to $34 billion, up from $8.6 billion in 2004, according to Australia’s Department of Foreign Affairs and Trade.
Ken Henry, Australia’s Treasury Secretary, said in October China and India, with their “strong contribution to global demand for mineral commodities”, would increasingly become key drivers of the country’s growth and fuel a commodities boom.
India’s imports from Australia, driven by demand for coal and gold, crossed $13.2 billion in 2009, up from less than $4 billion in 2004.
