The Australian Government has released its latest quarterly report for the national resources and energy sector, the Resources and Energy Quarterly, which projects the Office of the Chief Economist’s outlook until 2022–23.
While the report predicts export earnings to decline somewhat from current levels (with iron ore and coking coal prices expected to fall in particular), it expects the next five years to deliver over $1 trillion in income from resources and energy exports, which is about 60 per cent of Australia’s 2017 gross domestic product (GDP).
Annual export levels are expected to increase to a record $230 billion for 2017–18, buoyed by LNG prices, then sit around $213–216 billion from 2019–20, compared with annual earnings of $72 billion in the previous decade, which, according to Mark Cully, chief economist of the Department of Industry, Innovation and Science, validated a “long-held view that the mining boom would continue to reap dividends long after the price peak in 2011”.
By 2020, the rapid growth seen in Australia’s resources sector export volumes, driven by a mining investment boom, is expected to have “run its course”, however.
Iron ore exports grew 16 per cent last year to $63 billion, driven by high prices and export volume growth, while coking coal earnings for 2017–18 are forecast at around $40 billion. In 2018–19, LNG is expected to overtake coking coal as Australia’s second largest resource and energy export. Thermal coal export earning will hit a record $22.9 billion in 2017–18 before declining to $17.1 billion by 2022–23.
For further information on these and other resources exports, including predictions for gold, zinc, nickel and copper, the full report can be downloaded here.