Gladstone to Win from China's Coal Boom

Gladstone will be a major winner from Australia's booming coal exports to China, the Deputy Prime Minister and Minister for Trade, Mark Vaile, said today.

The Deputy Prime Minister will tonight brief a dinner hosted by the Central Queensland Port Authority on the latest export projections from the Australian Bureau of Agricultural and Resource Economics (ABARE).

"China has substantial reserves of thermal and soft coking coal, but does not have enough hard coking coal to support its steel industry. In addition, its coal reserves are in western China, far from its major coal users," Mr Vaile said.

"ABARE projects that China's coal imports will increase by about 12 per cent a year for the next 20 years. It projects that our coal exports to China will increase by a similar figure: about 13 per cent a year by volume. It's a staggering growth rate. Over twenty years, it would be an eleven-fold increase in our coal exports to China.

"At the moment, China accounts for only 2.5 per cent of our coal exports - our sixth largest coal export market by volume. By 2025, China could be the destination of 15 per cent of our coal exports, and our second largest coal market after Japan.

"The Port of Gladstone handled almost 1.3 million tonnes of coal for the China market in 2004-05. The figure can be expected to grow rapidly in the years to come, as a result of China's rapid growth and the possible Free Trade Agreement that we are negotiating.

"There is only one threat to our coal exports and the future of Gladstone: the Australian Labor Party, which still wants Australia to ratify the Kyoto Protocol.

"A Labor frontbencher, Martin Ferguson, recently argued that the ALP should abandon its flawed approach, but he was denounced by his colleagues. They said he was a neo-conservative who was more right-wing on the environment than Arnold Schwarzenegger. He's been very quiet since.

"Labor's plan to ratify Kyoto would increase power prices by more than 25 per cent. It would have a devastating effect on the thousands of people in Gladstone and Calliope who depend on the region's export industries.

"There is a better way, and that's to develop new technologies and to help countries like China and India use them. That's why we have launched the Asia-Pacific Partnership on Clean Development and Climate, in conjunction with China, India, Japan, the Republic of Korea and the United States.

"The partnership countries will work together to adopt clean technologies such as geosequestration, which involves pumping the carbon dioxide from power stations into underground rock formations.

"It's a sensible and effective way to deal with climate change. It will protect Gladstone's economic future - and change its skyline. I look forward to the day when the smokestacks of the Gladstone Power Station are replaced with the membrane systems, compressors and pipelines that are needed to store its carbon dioxide emissions safely," Mr Vaile said.

The projections are set out in ABARE eReport 05.13, China's Future Growth: Implications for Selected Australian Industries. The report can be downloaded from www.abare.gov.au

Contact: Carissa Buckland 02 62 777420