China to fulfill pledge to eliminate import tax on Australian thermal coal

19 December 2016

Australian thermal coal cargoes arriving at China’s ports on January 1, 2017, and thereafter will be clear of the Asian country’s 2% import tax, currently equivalent to $1.50/mt, and levied on the delivered CFR South China price of shipments, said the Australian government Thursday.

Beijing introduced a 6% tax on all thermal coal imports with little advance warning in October 2014, and went on to lower its rate on Australian-origin thermal coal to 4% in December 2015, and then to 2% effective January 1, 2016.

“Under China-Australia Free Trade Agreement (ChAFTA) commitments, this tariff is scheduled to be fully eliminated (cut to 0%) for Australian-origin thermal coal on January 1, 2017,” said a spokeswoman for the Australian government’s department of foreign affairs and trade.

“Prior to the China-Australia Free Trade Agreement coming into force, China’s general import tariff for [thermal coal] was 6%. Under ChAFTA commitments, this rate has already been reduced twice for Australian-origin thermal coal, to now sit at 2%,” said the department of foreign affairs and trade.

Source – Platts