Article by Stuart McKinnon courtesy of the West Australian
Australia’s resources sector will again break export earnings records this financial year, underpinned by another record high in annual income from WA’s powerhouse iron ore industry.
Amid the pandemic and despite sanctions on several commodities from Australia’s biggest trading partner China, resources and energy exports are expected to deliver $296 billion in income for the nation, up from a record $290b last year.
After being the first commodity to crack $100b in export earnings last year, iron ore is expected to deliver a record $136b in income this year underpinned by nine-year high prices for the steel-making commodity above $US170/t.
The income figure was up from the $123b tipped in the December quarter.
The Federal Government data released today by the Office of the Chief Economist within the Department of Industry Innovation and Science also showed gold would generate $29b this financial year, up from $25b last year. The lift comes despite softening prices for gold after it hit a record $US2075/oz in August.
The resources and energy quarterly update also predicted strong growth in export income from metals used in new and low-emission technologies such as lithium, nickel and copper.
From an estimated $1 billion in 2020–21, lithium exports are set to rise more than fivefold in real terms by 2025-26.
Nickel exports are expected to almost double, while copper exports are set to rise almost one-third over the same period.
Export revenue from the three commodities combined is projected to reach $28b by 2025-26, just short of Australia’s third-biggest export earner in that year, metallurgical coal.
Federal Resources Minister Keith Pitt said the forecast results showed how well the resources sector had managed the challenges of the past year and just how vital it remained to Australia’s economic success.
“The industry has remained safe and reliable suppliers to domestic and global markets throughout the pandemic,” he said. The data comes after it was revealed last week WA’s booming iron ore sector had helped drive a $23.1b improvement in the Federal coffers.
Australian LNG export earnings are forecast to fall from $48b in 2019-20 to $33 billion this financial year on the back of weaker global demand and prices, before recovering to about $45b by 2025-26 .
Resources and energy export earnings are expected to fall modestly to $288b in 2021-22 and then stabilise over the outlook period to 2025-26.