Australian carbon tax raises the cost of imported iron ore from China by 18.5 billion yuan

The impact of the carbon tax on the development of the industry will appear this year.

“The Australian carbon tax will push China’s iron ore import costs by more than 10 billion yuan.” Wang Yigang, a carbon finance expert, told this reporter that according to his analysis, only two major Australian iron ore giants BHP Billiton and Rio Tinto’s carbon According to the calculation of tax cost, in the context of a strong seller position, if the tax is fully passed, China's iron ore import costs will increase by 18.5 billion yuan.

From July 1 this year, the Australian government will impose a carbon tax of A$23 per tonne on 500 high-carbon emitters across Australia. Australia’s carbon tax scheme is highly rated internationally and it believes that it is taking concrete actions to deal with climate change, but experts also worry that the cost of carbon taxation for Australian mining companies can easily be passed on to downstream consumers abroad. Especially the iron ore industry.

However, Han Xun, manager of China for the TSI index, believes that the strong position of iron ore sellers this year is not obvious. “On the one hand, there are more and more emerging mines, supply will be more and more, on the other hand, due to China’s real estate this year, The slump in the auto industry is expected, so mills do not have the urge to purchase iron ore in large quantities,” Hanson told the reporter.

Australian carbon tax raises the cost of Chinese iron ore imports

According to Wang Yigang’s analysis, the cost of imported iron ore in China will increase by 18.5 billion yuan, based on the carbon tax cost of two major iron ore giants BHP Billiton and Rio Tinto (“Two Billiton”).

How does $18.5 billion be calculated? Wang Yigang's calculation is that the carbon tax cost of “two extensions” is multiplied by the proportion of “two extensions” iron ore exported to China, divided by the Chinese iron ore import rate from Australia.

First of all, the "two extensions" of the carbon tax cost. According to the information provided by the websites of the two companies, the carbon emissions of BHP Billiton and Rio Tinto in 2010 were 47 million tons and 43.4 million tons respectively, which were added together, multiplied by 23 AUD/ton carbon tax, and multiplied by 6.8 (Australia AUD/USD). *** Exchange rate), and the carbon tax cost of "Two Extensions" is 14.1 billion yuan***.

About half of the "two extensions" iron ore is exported to China. About 38% of China's imported iron ore comes from Australia, so 14.1 billion yuan is multiplied by 50% and divided by 38%. The result is 18.5 billion yuan. The figure is due to the "two extensions" carbon tax costs, and China's increased iron ore import costs.

"Australia's use of its dominant position in the iron ore mine trade can easily achieve the cross-border transfer of carbon tax burdens," said Wang Yigang.

Although the Australian carbon tax scheme will also provide a 94.5% or 66% subsidy for emissions-intensive trade-competitive industries through the implementation of the Employment and Competitiveness Program, the Australian iron ore industry is not a subsidized trade-competitive industry. "Competitive assessment criteria for trade: First, the proportion of trade exceeds 10% in any year of 2004-2008, and second, it proves incapable of transferring costs to consumers because of international competition. Iron ore exports do not meet the second Standards," said Wang Yigang.

According to the website of the Ministry of Industry and Information Technology of the People's Republic of China, China imported 686 million tons of iron ore in 2011, which is 678 million tons more than in 2010, an increase of 10.9% year-on-year. The iron and steel industry spends more on imported iron ore prices.** About 25 billion U.S. dollars.

“As soon as Australia imposes a carbon tax, the two extensions will inevitably increase their prices. Brazil’s Vale will also increase its prices. Australia and Brazil have a “double monopoly” in the export of iron ore. The market gap is not something that can be remedied. "Wang Yigang told this reporter.

"Iron ore will not increase prices, but also look at the specific negotiations, including the complex relationship." Strategic Investment Co., Ltd. Zhongchuang Qian Guoqiang told this reporter.

In addition to the carbon tax, the Minerals Resource Rent Tax proposal, which is pending implementation this year in the Senate of the United States, is scheduled to begin on July 1 this year and imposes a 30% lease on mineral resources for iron ore and coal mining company sales. tax.

The intention to levy tax on mineral resources in Australia has long been in place. As early as May 2010, Mr. Rudd, who was the Prime Minister of Australia, proposed to propose a "resource lease tax" with a tax rate as high as 40% to replace the state governments. In the 2%~10% "special tax", this triggered an "earthquake" in Australia's economic circles and political circles. Rudd also resigned under pressure.

The successor Australian Prime Minister Girard launched a series of negotiations with the miners to propose a new mineral resources lease tax proposal and impose a 30% mineral resource lease tax on all iron ore and coal companies with annual profit of more than 75 million Australian dollars.

Once the mineral resource lease tax is implemented, it will form a certain high level of support for the two prices of iron ore and coal, and pass the cost to downstream consumers. “The mineral resource lease tax will not have a smaller impact on China than the carbon tax. Only bigger." Wang Yigang told this reporter.

It is worth noting that in addition to the increase in the cost of Chinese iron ore imports, China's coal import costs will increase.

According to China Everbright Securities, due to the increase in carbon tax, Australia’s tax revenue per ton of coal is increased by 3 Australian dollars. In 2010, China imported 36.963 million tons of coal from Australia. In 2010, the amount of coal imported from Australia was 22.3% of the country's total coal imports.

However, "because Australian coal has no obvious seller advantage in terms of imports to China, China can seek to replace the importing country. China's coal self-sufficiency rate is higher," Wang Yigang pointed out.

Can you draw on China's carbon tax cut?

Australia’s carbon taxation idea can bring inspiration to China. “The Chinese government can have carbon tax design similar to the Australian carbon tax for those industries whose production capacity accounts for a large proportion of world production capacity and for which there will be no large-scale alternative capacity in the short term. The domestic carbon tax program," Wang Yigang pointed out.

Australia’s carbon emissions account for 1.5% of the world’s share. Due to the country’s relatively scarce population (22 million people), it has become the world’s most advanced country with the highest per capita carbon emissions, and it also faces international carbon emission reduction pressures. The country thus proposes a carbon tax scheme.

In fact, from Rudd to Gillard, the Australian carbon tax scheme has evolved. Rudd's previously proposed carbon trading program was repeatedly blocked in the Australian Federal Parliament.

Successor Gillard made a compromise and changed Rudd's approach to introducing a carbon trading mechanism in one step. It was carried out in a step-by-step manner, first implementing a fixed carbon price mechanism and then introducing a carbon trading mechanism. In order to obtain sufficient support, Girard announced a series of compensation plans in the fixed carbon price plan, including the government will fix more than half of the carbon price of income, to provide compensation for 90% of affected families by increasing subsidies and tax reductions, etc. , And through the tax reform, people can get compensation without having to submit a refund application.

In addition, the Australian Carbon Tax Scheme will also provide a 94.5% or 66% subsidy for emissions-intensive trade-competitive industries through the implementation of the Employment and Competitiveness Program.

Girard's implementation of the carbon tax scheme was mainly to gain the support of the Australian Green Party and to win important political stakes in participating in the 2013 election.

The most critical point is that Australia has pledged the “tax” of carbon tax on China’s continued purchasing power. In terms of the iron ore industry, due to China’s strong demand, the Australian government predicted last year that by June 2012, the country’s iron The export volume of ore will increase by 8% to 437 million tons.

"In China, which has the advantage of possessing the world's major production capacity, China has a domestic carbon tax scheme that is similar to Australia's carbon tax design, and it has the opportunity to reveal the imbedded carbon in export commodities. It may not necessarily lead to the loss of international competitiveness. The Chinese government can rethink this issue in carbon tax design,” Wang Yigang pointed out.