Chinese Free Trade Agreement includes major tariff reductions for Australian mineral

exports, including coal, alumina and nickel

ABC Rural
17 Nov 2014

The Australian resources sector also appears to have had some material gains from the
Free Trade Agreement with China
Tariffs will be removed from
aluminium oxide, nickel, titanium,
copper, uranium and zinc, either in the
short term or phased out over a few
years.
Tariffs on coal that shook the industry
when they were introduced almost
overnight by China last month will also
be removed or phased out.
Thermal coal, used for energy
generation, was hit with a 6 per cent
import tariff. Coking coal, used in
stainless steel production, was given a 3
per cent tariff.
That will be removed immediately the
FTA is signed, but the 6 per cent tariff on
thermal coal will remain for another two years. China is the largest buyer of Australian coal, but
structural problems within its own coal sector have seen a major slowdown in the global coal
industry. The price for thermal coal has almost halved to $US65 tonne and a number of
Australian mines have closed or been mothballed and workers laid off.
Despite this, in its annual report on the global energy outlook, the International Energy
Agency says the use of coal as an energy source will continue to grow before it reaches a plateau
by 2040, due to differing trends across different countries and economies.
"A large share of the increased coal generation in China, India and developing Asia will be
modern 'supercritical and ultra-supercritical' coal generation, which slash CO2 emissions by up
to 40 per cent and achieve near-zero emissions of other pollutants," the IEA said in a summary of
the report.
Energy analyst Alan Oxley, of ITS Global, says in keeping with that report Australian coal
exports will continue to grow for decades, with demand from both China and India. He also
points to the environmental pact between China and the USA last week as another example of
the continued use of coal, and says it's important to note China only made a commitment to try to
reach peak emissions by 2030.
"That doesn't mean cutting back coal consumption, that means reducing carbon emissions,
and they will do that because they're going to put in more efficient generators for coal power.
"We all knew that would be an improvement. What it does not mean is the consumption of
coal imported from Australia will be reduced."
The FTA effectively means the full removal of all tariffs on mineral commodities within four
years.
Vocabulary

Boon : Anugerah Halved : Dibagi setengah

Copper : Tembaga Demand : Permintaan
Plateau : Masa stabil Pact : Pakta
Differing : Berbeda Phased Out : Dihapus
Emissions : Emisi Shook : Menggemparkan
Question

1. What is the main idea of the paragraph 1?

2. Which minerals make a shook to the industry?
3. How much the price for thermal coal was halved?
4. How long will remain tariff on thermal coal?
5. What does Energy Analyst think about the Australian Coal Export?
6. Who says that Australian coal exports will continue to grow for decades?
7. Why does Australian coal exports will continue to grow for decades?
8. When will tariffs on mineral commodities be remove?
9. Who is the largest buyer of Australian Coal?
10. What is purpose of FTA between China and Australia on mining industry?