China's new tax on coal imports will be a disaster for Australian miners

China's decision to impose a duty on coal imports could be a watershed moment for Australian miners who are already struggling to stay afloat. The move by the economic giant involves a new tax of 3 to 6 percent, which shocked and angered Aussie producers, which account for a quarter of China's coal imports.

The Minerals Council of Australia (MCA) is calling on the Australian government to initiate urgent negotiations with its Chinese counterparts and to look for ways to reverse the decision. The MCA explains that applying the tariff could ultimately drive up energy costs for China's industrial sector and households. This tax should come into force on December 1st.

The surprise announcement represents the second major blow to coal exporting countries to China after Beijing banned the sale or transport of low-grade or dirty coal last month, putting additional pressure on the global coal market. Beijing also plans to remove power plants that use fossil fuels.

China's dependence on coal is well known. Annual consumption exceeded 1 billion tons per year in 1988 and has since reached 4 billion tons last year. This means that the Asian giant gets about 70 percent of its energy from fossil fuels. Even so, Australia's coal industry has already experienced difficult times, with steam coal prices falling more than 40 percent.