Economy

Hopes ride high on Regional Comprehensive Economic Partnership as Queensland coal exports falter during 2019-20

Dr Marcus Smith

The Regional Comprehensive Economic Partnership (RCEP) is made up of 10 Southeast Asian countries and includes South Korea, China, Japan, Australia and New Zealand and sets the terms of trade in goods and services, cross-border investment and new rules for increasingly important areas such as electronic commerce and intellectual property.

Accordingly, Australia’s prime minister, Scott Morrison, has said the deal would “open up new doors for Australian farmers, businesses and investors”.

New trade relationships that reduce import tariffs come as a welcome gesture for Queensland particularly given trade tensions that have recently emerged between China and Australia regarding key exports such as coal.

Data from the Department of Natural Resources and Mines (DNRM) recorded total coal production in Queensland to be 239.08m tonnes during 2019-20.

Metallurgical coal, or coking coal, which comprised almost 64% of the total saleable coal production during the year was down by 2.4% to around 152.479m tonnes, while thermal coal production was down by 8.9% to 86.602m tonnes.

Most of the Queensland’s coking coal (65%) is mined in the Northern Region (boundary defined to just south of Dysart), while half of the state’s thermal coal is mined in the Southern Region (boundary defined south of Calliope).

Figures compiled by the Department of Foreign Affairs and Trade show that Queensland coal exports fell by $7.522b (19.8%) in 2019-20 despite continuing to be by far the largest merchandise export item by value at $30.385b or almost 40% of the state’s $76.631b in exports. 

By volume, the DNRM data showed that 213.051m tonnes (89%) of the state’s total production was exported to markets predominantly in Asia (88%) and Europe (9%), of which coking coal represented almost 72% of total shipments from the state.

The DFAT breakdowns showed that falls in coal export values in 2019-20 were largest in key Asian markets including India which fell by almost $2.6b (31%) to $5.848b, by $1.572b (26%) in Japan to $4.552b, and by $998m (28%) in South Korea to $2.614b.