The Queensland government has urged the federal government to return to trade talks with China with the growing diplomatic row putting coal mining jobs at risk.
The state’s coal exports slumped 3.1 per cent in 2019/20 driven by a decline in demand due to coronavirus in the June quarter.
Spot prices for coking coal fell 24.5 per cent and prices of thermal coal fell 33.4 per cent between January and August and September.
Queensland’s coal royalties are expected to fall from 3.5 billion in 2019/20 to $1.6 billion in the current financial year.
The state budget, handed down on Tuesday, says demand had been showing signs of recovery until China started to restrict Australian coal imports in October.
Relations sank even further this week after a senior Chinese official posted a doctored image of an Australian soldier holding a bloody knife to the throat of an Afghan child.
Premier Annastacia Palaszczuk has urged the federal government to tone down the row with China, with her state expecting coal exports to be 8.0 per cent lower in 2020/21.
“We would encourage the federal government to resume trade relationship talks, because what the mining companies are saying to me is that the last thing they want to see are mines closed in Queensland,” she said on Tuesday.
“We will always stand up for Queensland jobs in this state.”
Ms Palaszczuk stressed that she was not accusing the prime minister of mishandling the relationship with China.
She said she was instead urging the federal government to work to repair the deteriorating ties.
Queensland is forecasting coal exports to bounceback by 9.75 per cent in 2021/22, while the state’s coal royalties are expected to rise to $2.3 billion.
But the premier said those improvements were largely dependent on Australia’s relations with China returning to normal.
“It’s not just Queensland, it’s Western Australia, it’s the states that heavily rely on trade. Trade equals jobs, and these are local jobs,” Ms Palaszczuk said..