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Mineral exports face new crackdown from China

China Customs
China Customs

Concerns are growing the industry could struggle to sell commodities to the nation’s largest trading partner after the communist country decided to delay processing of mineral shipments.

China Customs has announced new inspection rules for iron ore imported from Australia that will add more red tape for mining companies.

Starting from the beginning of June 2020 Chinese border authorities will manually check iron ore at the request of the trader or importer. Shipments were previously subject to a mandatory site inspection that was performed batch by batch.

Economic blackmail

University of New South Wales economist Tim Harcourt believes the Asian country could be using trade to pressure the Australian government to stop calling for an independent investigation into the origins of the Wuhan coronavirus (COVID-19). About 60 per cent of China’s iron ore comes from Australia.

“This is the usual China tactic with trade,” he told the Special Broadcasting Service. “They do not always want to slap tariffs on or fan things, but they do like to slow things down, and you see a lot of slow downs in customs and new techniques apply as a way of sending a message without actually being fined by the World Trade Organisation (WTO) for unfair trade practices.”

Liaocheng University chief research fellow Yu Lei used Chinese state-run media to warn the iron ore import changes were due to Australia’s push for an independent inquiry into COVID-19.

“This is another implicit warning to Australia,” he told the Global Times. “It is associated with how Australia has acted, and a general decline in demand for steel on the global level.”

The extra screening comes as the industry recovers from the impact of COVID-19 and iron ore spot prices finally return to pre-pandemic levels of more than 90 US cents (A$1.37) a tonne, according to Markets Insider.

Coal suffers too

Deputy Prime Minister Michael McCormack believes coal could be impacted too, following the Chinese regime’s advice to state-owned power plants to stop buying Australian thermal coal and choose domestic coal instead.

“Of course we are very concerned by it,” he said according to Australian Associated Press (AAP). “We want to make sure that our coal exports have a destination … but we have a two-way relationship with China. China needs Australia as much as Australia needs China.”

The Chinese Communist Party recently banned meat imports from four Australian abattoirs, including Dinmore, Beef City, Kilcoy Pastoral Company and Northern Cooperative Meat Company. The regime also said it would introduce a new 80 per cent tariff on Australian barley.

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Federal Trade Minister Simon Birmingham has tried to contact Beijing about the trade restrictions but communist officials are not responding.

Federal Home Affairs Minister Peter Dutton described “stonewalling” as one of the regime’s tactics, and is now considering whether to lodge a complaint at the WTO.

“We do not think they have got a legal basis for imposing these tariffs and we want them to change their position,” he said according to AAP.

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