PERTH (miningweekly.com) – Australia’s resource and energy export earnings are forecast to reach A$379-billion in 2021/22 as demand for coal and gas surges in the face of a global energy shortage, the December edition of the Resources and Energy Quarterly (REQ) found.
The 2021/22 prediction is up from the A$310-billion achieved in 2020/21, and is expected to fall again to A$311-billion in 2022/23 as commodity prices settle lower.
The December edition of the REQ from the Department of Industry, Science, Energy and Resources found that high commodity prices, good volume growth and a weak Australian dollar are driving a surge in export earnings.
Minister for Resources and Water Keith Pitt said that the resources sector once again had been shown to be the bedrock of the Australian economy and would strongly support the nation’s future growth.
“The resources sector has risen above the challenges of the pandemic and will continue to deliver for our nation in the years ahead,” Pitt said.
“In 2020/21 our resources and energy earnings passed A$300-billion for the first time, reaching A$310-billion, and are now forecast to top that by A$69-billion in 2021/22.
“These are outstanding results that will provide further jobs and opportunities in our regions and benefit all Australians. Hundreds of new projects in the pipeline, including 60 new or expanded coal mines, will deliver thousands of new jobs, especially in regional areas.
“The higher forecast earnings are expected to keep the benefits flowing to the broader community, including through royalties the states use to pay for the hospitals, roads and schools, the services we all rely on.
“The Queensland government [in December] announced a A$2.9-billion boost from coal royalties alone. This is money that can build hospitals, buy medical equipment and fund more nurses as the state opens up from Covid.
“Australia is set to benefit from a global shortage of energy, with record earnings from thermal and metallurgical coal and liquefied natural gas (LNG).
“Coal is the star performer. Australia’s high-quality coal is finding new markets across Asia, including India, with Australian producers enjoying record price increases across all grades of coal.”
Thermal coal export values are expected to rise from A$16-billion in 2020/21 to A$35-billion in 2021/22. Earnings are likely to fall back to A$27-billion in 2022/23, while metallurgical coal exports are expected to rise from A$23-billion in 2020/21 to more than A$50-billion in 2021/22.
Metallurgical coal exports will rise from 171-million tonnes in 2020/21 to 181-million tonnes by 2022/23, while thermal coal exports will decline 213-million tonnes in 2019/20 to 192-million tonnes by 2020/21, but will recover back to 204-million tonnes by 2022/23.
However, export earnings from iron-ore are expected to fall from a record A$153-billion in 2020/21 to A$118-billion in 2021/22, and ease further to A$85-billion in 2022/23.
Australia’s iron-ore export volumes are expected to grow steadily over the outlook, from 867-million tonnes in 2020/21, to 920-million tonnes by 2022/23.
Lithium, nickel and copper export earnings are expected to rise over the next two years, supported by higher prices, new energy technology take-up, and increased production.
Australia’s LNG exports earnings are forecast to rise from A$30-billion in 2020/21 to A$63-billion in 2021/22, before settling back to A$55-billion in 2022/23 as oil-linked contract prices ease.
LNG export volumes will increase by 6.5% to 82-million tonnes in 2021/22, as major technical issues are resolved at several plants, and would stay stable at around 82-million tonnes in 2022/23.
Meanwhile, the 'Resources and Energy Major Projects 2021' report (REMP), released at the same time as the REQ, showed a positive outlook for the development pipeline of resource and energy projects.
Some 113 projects, worth a combined A$206-billion to A$229-billion have been publicly announced, with a further 160 projects, worth an estimated A$163-billion to A$243-billion, at feasibility stage, while funding of A$54.3-billion has been committed to 79 projects, and 15 projects worth a combined A$10.1-billion have been completed in the 12 months to October 2021.
Pitt said that the 367 projects included in the report had an estimated value of A$504-billion, with hydrogen, ammonia and carbon capture and storage projects accounting for A$185-billion worth of investment and gold emerging as a new growth industry.
“This means jobs for Australians,” Pitt said.
“Job estimates from proponents of committed projects suggest around 25100 construction jobs and 8 300 ongoing jobs will be created. The majority of these jobs will occur in regional Western Australia and Queensland.”
The REMP noted that more than A$11-billion had been committed to oil and gas/LNG projects in the 12 months to October 2021.
The REMP estimated that 42% of the committed capital spend would go towards projects in the oil and gas sector, with iron-ore projects claiming a further 21% of the proposed capital spend, gold claiming 9.4% and critical minerals claiming 8.7%.
The report also noted that iron-ore, coal, gas, and hydrogen projects, as well as related infrastructure, account for almost 80% of total investment expected, including almost 40% from hydrogen/ammonia projects.
The Queensland government has pointed out that up to A$26-billion worth of new energy economy projects have been proposed for the state, driven by the growing demand for batteries and advanced technology.
Queensland Resources Minister Scott Stewart said that the REMP and REQ findings dovetailed with the state government’s draft 30-year Queensland Resources Industry Development plan.
“The government identified the growing demand for these new economy minerals several years ago and we continue to drive exploration, investment and downstream processing,” he said.
“These latest reports are further proof that our early work is starting to yield results and the state stands to benefit from growth in these minerals. The resources industry and the growing new economy minerals sector are a key part of our economic recovery from Covid-19.”
Queensland exported nearly A$8.6-billion worth of aluminium, bauxite, copper and zinc in the 12 months to October 2021, Stewart pointed out, while the REMP noted the importance of critical minerals for the development of battery technology and the expected growth in electrical vehicle manufacturing.
Stewart said the report included hydrogen for the first time and identified seven new energy projects on the books in Queensland, including commercial hydrogen production facilities in Townsville, Gladstone and Bundaberg.
“Our economic recovery plan is about identifying jobs in traditional and emerging industries, including hydrogen and manufacturing,” he said.
“That is why one of the proposed actions in our draft resources industry development plan is to review existing legislation to ensure we are ready for hydrogen and other clean resources to be used in our homes.”