Deep sea mining puts $560 billion in land extraction at risk — report
Even in optimal scenarios, the activity would generate only $6.25 million in tax revenue for countries involved, says Planet Tracker.
Cuts by Chinese banks to lending to domestic coal traders is set to place further pressure on global spot prices for the carbon fossil fuel.
Reuters reports that Chinese banks are ratcheting up credit terms as well as slashing lending levels for coal importers due to concerns over defaults.
Many Chinese coal traders are believed to have availed themselves of easy credit earlier in the year to raise import volumes, betting incorrectly that China’s economic growth would gain pace in the summer.
Growth in China instead fell to its lowest rate in three years leading to an accumulations of coal inventories and a 20% plunge in domestic prices. This in turn triggered a wave of loan defaults and shipment delays amongst coal traders.
China’s banks, which are notorious for operating at the behest of the central government, have made the decision to reduce lending to coal traders independently due to anxieties over the rise in bad debt, in distinct contrast to cuts in lending to the steel and real estate sectors which were prompted by orders from Beijing.
A scarcity of credit for coal deals in the world’s biggest consumer of the sedimentary energy source will put a low ceiling over price rebounds, and hit the key regional exporters of Australia and Indonesia especially hard. The two Asia-Pacific nations have supplied China with over 50% of its 150 million tonnes in coal imports thus far this year.
Related:
Chinese reforms anticipate sustained decline in coal prices
Debt-light miners set to best weather the commodities slump
