Article by Stuart McKinnon courtesy of the West Australian.
Export revenue from Australia’s booming resources sector is set to hit a record $310 billion this financial year, underpinned by a surge in commodity prices as the world recovers from the COVID-19 pandemic.The all-time high income will again be underpinned by WA’s powerhouse iron ore industry, which is expected to deliver a 45 per cent jump in earnings to a record $149b.
The data, contained in a quarterly update from the Federal Department of Industry, Science, Energy and Resources, showed the record iron ore result was up from $102b last financial year and represented almost half Australia’s earnings from resources in the year to the end of this month.
Federal Resources Minister Keith Pitt said Australia’s resources sector had remained a safe and reliable supplier to domestic and global markets during the pandemic, helping underpin economic growth and overcome the challenging trade conditions of the past year.
“The outlook for Australia’s energy and resource commodity exports continues to improve,” he said.
“Our iron ore producers are benefiting from current high prices and decades of investment and innovation, while coal exporters have pivoted to new markets to regain much of the losses from COVID downturn and China’s informal import restrictions.”
Australia’s overall resources earnings forecast, which comes days before the end of the financial year, represents a $14b jump on the figure forecast in March.
The department also predicts Australia’s resources sector will deliver another record of $337b in export earnings next financial year, representing a 7.7 per cent jump on this year’s figure.
The record figures reflect multi-year high prices for iron ore, LNG, thermal coal, copper, and other base metals. But earnings are expected to soften to $304b in 2022-23 as global growth rates moderate and commodity prices come off their highs.
Iron ore exports are forecast to grow from 871 million tonnes this year to 954Mt by 2022-23. But the report predicts export revenue from the steel-making commodity to fall to $113b amid anticipated price easing.
Australian LNG export volumes are forecast to increase by 5.3 per cent to 83Mt in 2021-22.
LNG exports earnings are expected to increase from about $33b in 2020-21 to $49b in 2021-22.
Gold export earnings are forecast at $29b in 2021-22, before a decline to $28b in 2022-23, as gold prices are tipped to ease.
Copper prices hit a record in May, but the price is expected to moderate in the outlook period. Australian copper export earnings are forecast to reach $13b in 2021-22, up from $10b last year.
Australian nickel exports are forecast to rise from an estimated 197,000t in 2020-21 to about 251,000t in 2022-23.
Export earnings from nickel are forecast to rise to $4.6b in 2022-23, up from $3.8b in 2019-20.
