In time, Hogsback reckons those two attitudes towards coal will become a flashpoint in international relations because both sides see coal very differently.

A series of events over the past few weeks highlighted the differences between a country richly endowed with coal and seemingly becoming less keen on mining it, and a region desperate to get its hands on more coal to meet booming demand for electricity.

Looked at carefully and the differences become more than commercial. They are geopolitical and have the potential to turn nasty should Australia ratchet up its tax regime to the point where it hurts Asian customers or, should the Green politicians calling the shots in the Australian government have their way and limit coal mining, or ban it altogether.

The latest events to catch the Hog’s eye included:

• An alarming report from India that domestic production of coal, gas and oil is falling sharply.
• The acquisition of the failed Griffin Coal’s assets in Western Australia by an Indian company.
• The acquisition of a 12.5% stake in Hunnu Coal by Thailand’s Banpu, following on from Banpu’s takeover of Centennial Coal.
• Reports that coking coal prices have skyrocketed to around $US330 a tonne in the wake of Queensland’s floods.
• The release of plans by China’s Shenhua to develop an open cut coal mine near Gunnedah in New South Wales.

There are many other examples of Asia’s love affair with Australian coal, either as a customer or investor, so that part of the coal equation is not new.

What’s changed is Australia’s attitude towards coal, a plan to whack it with a big new mining tax, and then to whack it again with a big new carbon tax, and then to make it more difficult to mine and export as environmental rules are progressively tightened.

If allowed, the Australian government’s formal coalition partners, the Greens, would ban coal mining altogether.

That final step will not happen, obviously, because the end of coal would be the end of the Australian economy.

But what is Australia’s treatment of its coal industry doing to Asia? In a few words: pushing up Asia’s electricity bill and making life even harder for people in our region.

Rather than being seen as a friend, Australia risks being seen as an enemy cashing in on Asia’s demand for energy.

It is Asian customers who will bear the most pain from higher prices caused by a combination of strong demand for coal and rising taxes.

The news from India this week was particularly interesting, including a report that Coal India, the world’s biggest coal miner, will cut production this year and next, at the same time as oil and gas production is falling.

The net result of this downward trend is that India’s reliance on imported energy will double from 25% to more than 50% over the next 20 years.

That’s one reason why Indian companies have added Australia to their global shopping list for investment, including last year’s biggest ever investment by an Indian company in Australia, Lanco Infratech’s $750 million purchase of coal assets near the South West town of Collie from the receiver of the failed Griffin business.

What seems likely to follow is what interests Hogsback because Lanco Infratech is not interested in supplying Collie coal to the WA power sector. It wants to export Collie coal to India.

The problem with the Indian plan is that Collie coal is poor-quality material widely regarded as suitable only as mine-mouth feedstock for power generation and, like all Australian coal, is in the cross-hairs of the mining tax and the carbon tax.

Despite the quality and cost hurdles, which have stopped earlier Collie export attempts, Lanco boss Madhusudan Rao said last week that he wanted to grow the Griffin business, “and further develop the mining and infrastructure [rail and port] facilities in the region”

There are two issues here. One is domestic because Collie is currently the only commercial source of coal in WA.

The other is that the price of Collie coal must rise sharply over the next few years to justify fresh investment in export infrastructure and to meet the cost of higher taxes.

Indian consumers will not be pleased with the Australian tax hits which will push up their electricity bills, and Australian consumers will not be happy watching an important west coast source of coal heading to India.

All the issues affecting Collie coal can be resolved, but it is an interesting example of how two countries see coal in a totally different light, and how coal will become more political as the mining and carbon tax debates heat up.