Australia’s resource and energy sector is now on track for a record year of exports value, according to the latest Resources and Energy Quarterly from the Department of Industry, Science, Energy and Resources.
The report, which covers a five-year outlook and highlights how the mining sector is poised to capture growth opportunities from the COVID-19 recovery, shows how well the resources sector has managed the challenges of the past year and just how important it remains to Australia’s national economic success.
Minister for Resources, Water and Northern Australia Keith Pitt said the forecast result showed exports are on track 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.
“This report confirms the remarkable resilience and strength of Australia’s resources and energy sector,” Minister Pitt said.
“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.”
According to the report, Australia’s iron ore export earnings are to reach a record high of $136 billion in 2020–21, up from the December forecast of $123 billion.
Exports of new technology related commodities are also anticipated 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 also improved, with exports of metallurgical coal, used in steel making, predicted to rise from a low of 173 million tonnes in 2020-21 to reach 191 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.