The Panama Canal expansion and the australian trade

Last time I mentioned that Panama started to recover after the crisis and had the great challenge of expanding the Panama Canal.

The Panamanian people are very enthusiast about this project which will drive the economy. It will allow the transit of larger vessels so there will be more traffic and the government would collect more taxes for the passage of boats.

However, this is not a good deal for everyone. In his blog, Samuel Taliaferro talked very well about the consequences of the expansion of the Panama Canal “ Australia’s iron ore exporters are going to have to start dealing quite soon with the implications of the upgrade to the Panama Canal... Bear in mind that while Australia enjoys a geographical advantage over Brazil as an iron ore supplier to Asia, Vale's iron ore is of slightly higher quality, so competition to ship ore into China is going to heat up...”

You can find his post here: How the canal expansion may affect Australia mining?

The source article was published in The australian.com. It shows the concern of Australian ore exporters because of the Canal expansion which will increase competition for the export of ore to China. It is interesting to see the Panama Canal in this light. The coming years will tell how the Australian trade is impacted by the expansion of the canal and if the expectation of the government and the Panamanian people is reached. Stay tuned.