Australia’s resource and energy exports are forecast to hit a record $296 billion in 2020–21 – another strong display of the industry’s resilience amidst the COVID-19 pandemic.
The March Resource and Energy Quarterly released yesterday by the Department of Industry, Science, Energy and Resources highlights the outlook for Australia’s mineral exports will continue to improve as the world economy rebounds from the impact of the pandemic.
The report shows that Australian miners have found their product in high demand, helped by the impact of government and central bank measures abroad.
In 2020–21, export earnings will reach a record $296 billion, slightly higher in real terms than the record set in 2019–20, before earnings fall modestly (down 3% to $288 billion) in 2021–22, and then steady at about that level over the rest of the outlook period (to 2025–26).
It outlines that Australia’s resource sector is set to capture the growth in demand for resources from new and low emission technologies.
The record export figures are underpinned by another all-time high in annual income from WA’s iron ore industry, which became the first commodity to hit the $100b in export earnings last year, expected to deliver a record $136b in income this year underpinned by nine-year high prices for the steel-making commodity above $US170/t.
Minister for Resources, Water and Northern Australia Keith Pitt said the report confirmed the remarkable performance of Australia’s resource and energy sector which is now on track for a record year of exports value.
He said the report’s five-year outlook highlights how the mining sector is poised to capture growth opportunities from the COVID-19 recovery.
“Exports are forecast to earn a record $296 billion in 2020–21 and remain strong over the next five years, driven by ongoing demand for iron ore and growth in technology-related commodities such as lithium, nickel and copper,” Minister Pitt said.
“This report confirms the remarkable resilience and strength of Australia’s resources and energy sector.
“The industry has remained safe and reliable suppliers to domestic and global markets throughout the pandemic.
“The increasing demand for Australian commodities has allowed export earnings to overcome challenging conditions for the benefit of the Australian economy and Australian jobs.
“The rollout of COVID-19 vaccines presents an opportunity to bring the pandemic under control and boost global economic activity and further demand for Australian commodities.
“Iron ore is benefitting from both high prices, as well as decades of investment, innovation and automation which have placed Australia at the forefront of the global iron ore market.”
The report show that exports of new technology related commodities are set to surge over the next five years, with lithium exports set to rise more than five-fold in real terms, nickel expected to almost double, and copper set to increase by a third over the outlook period.
Australia’s base metal exports are expected to grow over the short to medium term, as a rebound in global economic growth and industrial production increases the demand for Australian ferrous and non-ferrous metals.
The outlook for coal has improved since the December Resource and Energy Quarterly and export revenue and volumes have recovered.
Exports of metallurgical coal, used in steel making, are forecast to rise from a low of 173 million tonnes in 2020-21 to reach 191 million tonnes by 2025-26. Revenue is forecast to fall to $23 billion in 2020-21 from $35 billion in 2019-20 due to lower world prices, before recovering to $31 billion by 2025-26.
Thermal coal exports fell marginally from 213 million tonnes in 2019-20 to 206 million tonnes in 2020-21, but are projected to rebound to 231 million tonnes by 2025-26.
Australian LNG export earnings are forecast to fall from $48 billion in 2019-20 to $33 billion in 2020-21 due to weaker global prices and demand, before recovering to around $45 billion by 2025-26.
The latest Resources and Energy Quarterly is available on the Department of Industry, Science, Energy and Resources website.
