China’s Demand for Coal Surges

Australia’s Treasurer Jim Chalmers recently removed Australia’s 50% capital-gains-tax break.

He claimed the discount “creates distortions and discourages investment.”

Two weeks later, he bragged about slashing taxes for foreign investors in renewable energy. He said those cuts “encourage investment.”

Source: AFR

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Which is it? ‘Distort’ or ‘encourage’?

And why are foreign companies getting tax discounts when Australian investors are getting slugged harder?

I had to laugh. These people talk out of both sides of their mouths. They live in a fantasy world of ideology. But reality always wins out.

We already see the cracks.

Bailouts prop up Tomago and Snowy Hydro. Tax breaks hand foreign companies another leg up. Taxpayers subsidise the transition with promises of cheaper power “one day.”

But will it?

Ask yourself this: Would renewable investments need such breaks if the economics stacked up?

As former American Senator Pat Moynihan once said:

“You are entitled to your opinion. But you are not entitled to your own facts.”

Facts drive results. Not slogans or headlines.

And ironically, no one is more acutely aware of that than China…

Hard Lessons Learned

China is the world’s biggest builder of solar panels.

It installs more wind turbines than anyone on Earth. Last year alone, it added 315 gigawatts of solar and 119 gigawatts of wind.

That’s enormous.

But here’s what the green headlines won’t tell you.

China is also building coal plants faster than it has in a decade.

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In 2025, China brought 78 gigawatts of new coal power online. It started building another 83 gigawatts. And it commissioned more than 50 massive coal units. Each one is one gigawatt or larger.

Just one gigawatt can power more than a million homes. So we are talking about enough new coal to keep tens of millions of families warm.

Over the previous decade, China was building fewer than 20 of those big units per year. Now it is building them at breakneck speed.

Why the sudden rush?

China learned a brutal lesson in 2021 and 2022. Blackouts rolled across the country. Factories went dark. Production stopped. People suffered.

The wind had died down. The sun had set. A severe drought had drained the hydro dams.

And suddenly, all the ideology in the world couldn’t keep the lights on.

So Beijing made a practical choice. It did not ask what sounds good at a cocktail party. It asked what keeps 1.4 billion people warm, fed, and working.

Its own planners gave the answer. Coal must play an “underpinning and balancing role.” Those are their exact words.

Not a dirty word. An underpinning.

That’s reality talking

China leads the world in green energy. And it leads the world in new coal plants. At the same time.

They’re not pretending one replaces the other before it’s ready. They’re building what works. Full stop.

Meanwhile, back home, our Treasurer tells us one tax cut “distorts” the market… while another one somehow “encourages” it.

He thinks he can tax Australian investors harder. He thinks that if he says “transition” enough times, the laws of physics will bend.

They will not.

You can’t tax your way to cheaper power. You can’t push out baseload power and then act surprised when the grid wobbles.

China knows this. Australia pretends not to.

But here’s the silver lining for you and me…

Australia sits on a treasure chest

We’ve got some of the best coal, gas, and uranium deposits on the planet. We also have world-class lithium, copper, and nickel mines.

Think about what that means.

If the West keeps chasing the green dream, the world will need our lithium and copper for batteries and wires. If the West wakes up and chooses reality, the world will need our coal, gas, and uranium to keep the lights on.

Either way, Australia wins.

China is already showing us the playbook. They’re building everything. Solar, wind, coal, nuclear. They need it all. And they will need our resources to do it.

The current energy mess is hurting our factories today. No doubt about it.

But for mining investors, our domestic politics are a blip in the global scheme of things. They don’t move the needle much in terms of demand for our key energy resources.

The companies that pull energy out of the ground – whether it’s black coal, white lithium, or uranium – are sitting on assets the world can’t live without.

Politicians can change their minds. Tax breaks can come and go. But geology doesn’t change.

The world’s going to need Australian energy for decades.

All of it.

So while Canberra lives in its fantasy, you can invest in the reality.

The reality is this: energy demand only goes up. And Australia sells what the world must buy.

That is where you put your money. Not in the slogan. In the stuff underground.

Moynihan had it right. Facts win.