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Australian resource exports set for record heights

Image shows container ship at Port Hedland

Photo by Bloomberg

30th September 2021

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – New data from the Office of the Chief Economist has predicted that Australia’s resources and energy exports will earn a record A$349-billion for 2021/22.

This forecast was up from the A$310-billion reported in 2020/21, and will be driven by a strong recovery for coal and despite lower iron-ore prices and the ongoing impact of the global Covid-19 pandemic.  

The September edition of the Resources and Energy Quarterly from the Department of Industry, Science, Energy and Resources found high commodity prices, solid growth in export volumes and a weaker Australian dollar are driving a surge in export earnings. 

It forecasts overall export earnings to hit A$349-billion in 2021/22, before falling back to around A$299-billion in 2022/23.

Minister for Resources, Water and Northern Australia Keith Pitt said the report shows the continued resilience of the resources sector, which remains the backbone of the national economy.

“The sector has gone from strength to strength and is performing better than it was pre-pandemic, further building on Australia’s reputation as a reliable and stable supplier of resources and energy,” Pitt said.

“The forecast export earnings for 2021/22 are close to A$100-billion higher than they were a year ago during the peak of the global pandemic and is testament to the outstanding work of all involved in this critically import sector.

“This forecast growth in both export values and volumes will help create further jobs and opportunities in the resources sector, particularly across regional Australia.

“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.”

Australia’s iron-ore export earnings are forecast to drop from a record A$153-billion in 2020/21 to A$132-billion in 2021/22, owing to lower world prices, although export volumes are expected to grow steadily from 868-million tonnes in 2020/21 to 939-million tonnes by 2022/23. 

The Quarterly noted that the global economic recovery and constrained supply saw iron-ore prices exceed $200/t in the middle of 2021, however, reductions in Chinese steel production have contributed to price declines in the September quarter. The ongoing recovery in Brazilian supply is set to impact adversely on prices in the outlook period.

Meanwhile, coal prices have more than recovered all of their 2020 losses, as global shortages emerge. Supply problems and surging demand from steel producers in the major producing nations, have seen Australian metallurgical coal prices hit multi-year highs.

Exports of metallurgical coal are forecast to rise from 171-million tonnes in 2020/21 to reach 186-million tonnes by 2022/23. Revenue is forecast to rebound from A$23-billion in 2020/21 to A$33-billion in 2021/22.

Thermal coal export values are forecast to rise from A$16-billion in 2020/21 to A$24-billion in 2021/22, before easing back to A$19-billion in 2022/23.

Australian liquefied natural gas (LNG) export earnings are forecast to increase from A$30-billion in 2020/21 to A$56-billion in 2021/22, as oil-linked contract LNG prices rise sharply.

Australian export volumes are forecast to increase by 5.4% to 82-million tonnes in 2021/22 and 0.9% to 83-million tonnes in 2022/23, as technical issues are resolved at the Prelude and Gorgon LNG plants.

The report finds Australia overtook China as the world’s largest gold producing country in the first half of 2021. Gold production from new mines and existing mine expansions is expected to boost gold mine production to 378 t in 2022/23

Gold export earnings are forecast at A$29-billion in 2021/22, before a decline to A$27-billion in 2022/23, as gold prices ease back. 

Lithium export earnings are forecast to increase from A$1.1-billion in 2020/21 to A$3.8-billion in 2022/23. This will be driven by increased spodumene production, and exports of lithium hydroxide after first production occurred in August 2021.

Edited by Creamer Media Reporter

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