Federal Minister for Resources, Water and Northern Australia Keith Pitt says a new report confirms the resources sector continues to underpin our economy and has helped cushion the blow of the CV pandemic.
The Resources and Energy Quarterly shows that despite COVID-19, export earnings from resources are still on track to reach a record in 2019/20.
“While slightly down from the $299 billion expected pre-COVID, resources and energy exports will top $293 bill, which is still a record and an outstanding result in the current global circumstances,” Minister Pitt said.
“Iron ore demand has almost fully recovered in China and it remains on track to be first single Australian commodity to break the $100 billion mark in annual export value.
“On current trends, Australia will overtake China next year as the world’s top gold producing country to reach $30 billion in exports.
“The sector has always been a key contributor to Australia’s economic success and now it’s playing a vital role in protecting the country from a much more severe downturn as a result of COVID-19.”
The report also found mining directly accounted for 25 per cent of the growth in Australia’s GDP in the 12 months to the March quarter.
“The sector’s investment in a sophisticated and responsible approach to protect the health of workers and communities during the coronavirus pandemic has paid dividends,” Minister Pitt said.
Minister Pitt said while commodities and export earnings will continue to be affected by global economic conditions, investment in the resources sector remains strong.
“Companies are investing an estimated $38 billion this financial year, which is an increase of 15 per cent. Investment the following year is expected to remain stable,” Minister Pitt said.
“The strong investment by mining companies in Australia is a good indication of long term confidence in the sector. Resources will continue to be the foundation of Australia’s economic success.”
Employment in resources fell by 3.1 per cent from 240,926 to 233,311 between February and May compared to 6.2 per cent across all industries.
“Our government’s focus will be all about jobs as we emerge from the COVID-19 economic downturn, particularly for younger Australians, and the resources sector is well positioned to play its part,” Minister Pitt said.
Reduced industrial activity as a result of COVID, especially in manufacturing, will affect metallurgical and thermal coal prices over the next two years, however export volumes will remain steady.
LNG prices are expected to fall by around 25 per cent over the next years, largely as a result of lower oil prices.