Australian Coal Projects Threatened by Drop in Demand From China

Major Australian coal projects risk losing value due to falling demand from China, where leaders are increasingly concerned about growing public anger over severe air pollution, a new analysis from Oxford University has found. Future coal mining projects are vulnerable to being “stranded” by a range of policy changes from the Chinese government, including environmental regulation, carbon pricing, investment in renewable energy, and energy efficiency, the report said. One expert told The Guardian that global investors are already questioning the prudence of financing new fossil fuel projects. Backers of a handful of upcoming Australian coal projects “should seek clarity” on the associated costs, the Oxford analysis warns. It also cautions that Australian state governments could suffer if projects are mothballed or abandoned. Of particular concern are two mega-mines supported by Australia’s Prime Minister Tony Abbott slated for development in Queensland. Once running at full capacity, the two projects combined would produce enough coal to emit more than 70 millions tons of CO2 a year.