PERTH (miningweekly.com) – New data from Australia’s Bureau of Resources and Energy Economics (BREE) has suggested that commodity prices, specifically for iron-ore and coal, were set to rebound after 2016 as consumption growth started to catch up with the recent jump in production capacity.

Australian miners are faced with tough market conditions. In the coal sector, job losses are mounting, with the most recent affecting 700 employees from the BHP Billiton stable, while several iron-ore juniors are going into voluntary administration on the back of the low iron-ore prices.

In its latest Resources and Energy Quarterly, BREE stated on Wednesday that recent investment in the Australian resources sector would contribute to a rapid increase in Australia’s export volumes, once commodity prices increased.

However, in 2014/15, Australia’s earnings from mineral and energy commodities were forecast to decline by 1% to A$192-billion as higher export volumes for most commodities were more than offset by forecast lower export prices and a persistently high Australian dollar.

In 2013/14 Australia’s iron-ore export volumes increased by 24% to 652-million tonnes, supported by record production from Pilbara mines with Rio Tinto, BHP Billiton and Fortescue Metals all posting record high shipments.

Export values increased 31% to A$74.8-billion in 2013/14, underpinned by a combination of higher volumes, a more favourable exchange rate and higher prices in the first half of the financial year.

For 2014/15, Australia’s iron-ore export volumes were forecast to increase by a further 13% and to total 735-million tonnes, while export values were forecast to decrease 4.2% in response to lower prices.

BREE reported that the country’s metallurgical coal exports increased by 17% to 181-million tonnes in 2013/14. Exports were forecast to increase by a further 2% to 185-million tonnes in 2014/15, and the value of these exports was forecast to remain steady at around A$23.2-billion as the increase in volumes was offset by lower assumed contract prices and a strong Australian dollar.

Over the next five years, BREE projected that mineral and commodity exports would rebound and would total A$274-billion in 2018/19, supported by increased liquefied natural gas (LNG) and iron-ore export volumes.

“The prospects for the resources and energy industry remain positive. Continued economic growth in highly populated emerging economies will sustain increased demand for both resources and energy commodities into the future,” said BREE deputy executive director Wayne Calder.

“Closer to home Australia is moving decisively from the investment phase of the mining boom to the production phase. We will continue to see expansions in capacity from the Australian resources and energy sectors with increasing supply of iron-ore and coal, as well as the commencement of major new LNG projects across Australia.” 

Calder noted that first LNG shipments from the East coast were expected to start by the end of 2014, rapidly ramping-up over the period to 2019 to make Australia the world’s largest LNG producer.

Current gas production of 62.8-billion cubic metres in 2013/14 is projected to more than double to 150-billion cubic metres by 2018/19. Total LNG exports were expected to reach 78.4-million tonnes in 2018/19.