Forecasts down, but mining still booming

AUSTRALIA has cut its forecast for minerals export earnings for the second time this year as a result of the strengthening Australian dollar, according to a recently released Australian Bureau of Agricultural and Resource Economics (ABARE) report

AUSTRALIA has cut its forecast for minerals export earnings for the second time this year as a result of the strengthening Australian dollar, according to a recently released Australian Bureau of Agricultural and Resource Economics (ABARE) report.

The report forecast unit export returns for Australia’s energy commodities will fall by around 3% in 2007-08, following a rise of 9.5% in 2006-07.

Unit export returns for metals and other minerals are forecast to fall by more than 7%, compared with an increase of nearly 25% in 2006-07.

Exports of minerals and energy, such as copper and oil, are forecast to be $110.2 billion, down 1.8% from the September forecast, due to the rising Australian dollar and some declines in the price of metals, ABARE said. ABARE cut its price forecast for zinc by 45%, forecasting rising production would outstrip demand.

Zinc, copper and aluminium have all declined on the London exchange since June 30 on concerns US economic growth would slow.

Power-station coal export estimates were also cut as rail and port bottlenecks restricted shipments.

Thermal coal shipments might rise 3%, down from a September prediction of 8%, ABARE said.

Key contact:

phillip glyde

ABARE

pglyde@abare.gov.au

www.abare.gov.au

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