In further evidence of how resources and energy employers are playing a key role in the COVID-19 recovery, latest figures show the sector’s export earnings are set to again reach a new record in 2021-22.
The Resources and Energy Quarterly, released by the Department of Industry, Science, Energy and Resources, highlight that Australia’s resource and energy exports are estimated at a record $349 billion in 2021–22, up from $310 billion in 2020–21. In 2022–23, exports are forecast to decline by 14% to $299 billion.
“Australian iron ore earnings are (still) forecast to decline sharply in the outlook period, after topping the $150 billion mark – the first time ever for an Australian commodity – in 2020–21,” the report said.
“Both a stronger outlook for base metals and coal, and the noticeable decline in the Australian dollar over the past three months, have more than offset the impact on export earnings of the modest downward adjustment we have made to our iron ore price forecasts.”
Lithium exports – of spodumene concentrate and refined chemicals – are expected to almost match zinc exports in 2022–23, as the race to make the world auto fleet electric gathers pace. And exporters of aluminium, nickel, zinc and copper are benefiting from the global move to low emission technologies.
Thermal coal prices have surged in China, as critical shortages emerge.
Minister for Resources, Water and Northern Australia Keith Pitt said we should take every opportunity to thank the industry for what it has achieved throughout the COVID outbreak, and to thank the hard-working men and women who are the backbone of the industry.
“This forecast growth in both export values and volumes will help create further jobs and opportunities in the resources sector, particularly across regional Australia,” he said.
Potential downside
However, it also pointed to risks to these extremely strong export earnings forecasts. They include a potential for a spike in global inflation and a risk of higher interest rates in response. New, vaccine-resistant strains of the coronavirus, and the risk of delays in the rollout of effective COVID-19 vaccines to the world’s population, also pose significant risks. Another downside risk is the extent of any further disruptions to Australian resource and energy commodity trade with China.
You can read the forecast here.
