Australia’s resource and energy export earnings are forecast to remain strong over the next two years after hitting a record $290 billion in 2019-20, despite the pressures the COVID-19 pandemic placed on the sector.
The September Resources and Energy Quarterly forecasts export earnings will be worth $256 billion in 2020-21 and $252 billion the following year, down marginally on June forecasts due to the ongoing impact of COVID-19 on the global economy.
The Minister for Resources, Water and Northern Australia Keith Pitt said that although down on last year’s record, the forecast figures are impressive.
“The $256 billion in exports for 2020-21 is the third highest export result on record and $252 billion for 2021-22 is the fourth highest result,” Minister Pitt said.
“These figures demonstrate the resilience of Australia’s mining sector in the face of unprecedented challenges from the pandemic and its ongoing importance to the country.
“The resources sector has underpinned Australia’s economy throughout 2020 and will continue to play a crucial role for the nation as the global economy recovers from the COVID-19 pandemic.
“Robust commodity earnings will be more important than ever to the Australian economy as the country emerges from the largest global contraction since the 1930s.
“Australia’s reputation as a reliable, low-cost supplier of mineral and energy products remains intact, with virtually no operational COVID-19 shutdowns, unlike some of our competitors.”
The Resources and Energy Quarterly shows iron ore export earnings remain high, amid strong demand from China and constrained supply from Brazil.
The value of exports is expected to fall just short of last year’s record of $102 billion to reach $97 billion this year.
Australia’s gold exports are forecast to reach a record high of $31 billion in 2020-21, making gold Australia’s third largest commodity export behind iron ore and LNG.
“Australia is now on track to become the world’s largest gold producer by 2021,” Minister Pitt said.
“The outlook for copper also remains strong, with earnings to hit a record of more than $10 billion as the demand for electronic devices and electricity transmission networks grows in developing countries.”
Output and demand is expected to grow for new technology metals including lithium, nickel and zinc, which are all important to supporting renewable energy, electric vehicles and batteries.
The outlook for thermal and metallurgical coal and for LNG and oil exports all remain challenging and closely linked to the global COVID-19 recovery while international industrial activity remains subdued.
Minister Pitt said the continued overall strong results for Australia’s resources sector was good news for jobs and economic growth, particularly in regional Australia.
“The Government’s focus will be all about jobs as we get through the pandemic and the resources sector will continue to play a key role,” Minister Pitt said.
“Strong prices for gold, iron ore and other minerals are leading to new investment plans, including the re-opening of gold mines long closed and a steady stream of new projects awaiting final investment decisions.
“This investment will boost incomes and jobs, particularly in regional areas, and contribute to the prosperity of all Australians.”
The latest Resources and Energy Quarterly is available on the Department of Industry, Science, Energy and Resources website.