Australian deal with China extends coal's reign

In some regions, King Coal remains firmly on his throne.

The Australian mining company Resourcehouse on Saturday announced a

to sell coal to China, calling it Australia's "biggest-ever export contract".

Indeed, Australia's previous "biggest" trade deal, unveiled with considerable government fanfare last August, was some 31 per cent smaller: an

to export liquefied natural gas to China.

The relative size of the two deals highlights the extent to which China, which is set to overtake the US to become the world's biggest energy consumer, will remain dependent on the planet's highest-carbon fuel for electricity generation as its population and economy continue to expand. Once a coal exporter, it will continue to burn more of the fuel that it increasingly imports from regional neighbours such as Indonesia and Australia, despite huge

in renewable energy development and in building nuclear and gas-fired power stations.

Under the deal with Resourcehouse,

t will import 30 million tonnes of coal per year from mines to be developed in central Queensland.

Phil McNamara, the executive director of Resourcehouse, said development of the "once-in-a-century" mining project would begin later this year.

, the chairman of Resourcehouse and Australia's fifth richest man, said the project would involve developing "a new world-class coal region" in the northeastern Australian state. He plans an initial public offering of Resourcehouse shares on the

next month to raise up to US$3 billion for coal, iron ore and oil and gas projects.

Australia is already China's biggest coal supplier. Last year, it exported 43.9 million tonnes of coal to the Asia-Pacific country, accounting for 35 per cent of Chinese imports.

Australia will also

to China in coming years, as the most populous Asian country moves from being self-sufficient in gas to becoming a major importer.

What is unknown is how much, if any, of the new power generation capacity that China will build on the strength of its long-term fuel import contracts will be equipped to capture emissions, and how much carbon dioxide will actually be captured and permanently stored.

It is those statistics, not the raw fuel consumption data, that will truly determine China's commitment to slowing global warming.