Concern over China’s stricter coal testing

China has long tested imported shipments of coal for unacceptable levels of ash and sulphur. But Chinese customs recently expanding testing to fluorine, phosphorus, arsenic and other trace elements, leading to the rejection of a ship full of Anglo American coal from Australia.

Clive Palmer thinks the stricter testing is not a valid policy move by China, instead arguing the economic giant is simply looking to flex its muscle.

“They turn back some of our coal exports to give us a reminder of their market position,” Palmer reportedly told the AFR.

“If Australia retaliated and put taxes on iron ore it would [be] a different situation. We are not using what we have got to Australia’s advantage.”

Whether or not Palmer’s suggestion to artificially raise the price of Australian iron ore would be beneficial – or even feasible – it reiterates his business-like mentality when it comes to Australia’s relationship with China.

Palmer is seeking to develop a new coal mine in Queensland’s Galiliee Basin through his company, Waratah Coal, and in the past he has seen business with Chinese partners turn sour – his much-publicised legal battle with former partner CITIC Pacific over spending on a WA iron ore project is the prime example – so his position in this discussion is understandable.

But he’s not the only one expressing concern.

Australian trade minister Andrew Robb has reportedly been in talks with Chinese commerce minister Gao Hucheng over the stricter testing.

And the government of another of the world’s biggest coal exporting nations, Canada, has also expressed concern, with a spokesperson quoted by Fairfax this week: “Canada is seeking clarification of these new regulations and will continue to monitor their implementation in close collaboration with the Canadian embassy in Beijing, as well as Canadian coal exporters.”