An unprecedented boom in the value of Australia's resources exports is set to come to an end amid forecasts that earnings from iron ore, coaland gas will fall back down to earth.
Key points:
- Australia's resources exports are forecast to fall from $460 billion last year to $390 billion in 2023–24
- After reaching record highs, fossil fuel export valuesare set to drop sharply
- Sales of critical minerals such as lithium continue to grow, worth $46 billion in 2022–23
In its latest snapshot of the performance of Australia's mining and energy exporters, the Department of Industry, Science and Resources said the value of resource shipments was likely to have peaked.
The department found that Australia had exported resource and energy commodities worth $460 billion in the 12 months to the end of June.
However, the agency forecast that earnings would slide to $390 billion in 2023–24 as global economic growth slowed and constraints on supply chains eased.
The falls would be especially marked in the value of Australia's fossil fuel exports, with thermal coal sales tipped to decline from $64 billion in 2022–23 to $30 billion by 2024–25.
Similarly, big reductions in the global price of gas, which soared to stratospheric highs in 2022, would put a major dent in the money generated by Australia's liquefied natural gas (LNG) production.
Sales are expected to tumble from a record $92 billion last financial year to $68 billion in 2023–24 before easing further to $60 billion the following year.
Despite the hefty falls, LNG exports are still forecast to be substantially more valuable than 2020–21, when they amounted to just $30 billion.
According to the department, iron ore —long Australia's most valuable export commodity —was also set to come off its highs of recent years as China's economic path out of COVID lockdowns sputters.
Iron ore exports would be worth $93 billion in 2024–25, the department said, compared with $123 billion in the past financial year and a forecast$110 billion this year.
Metallurgical coal, used in the production of steel, will fall in value from $60 billion last year to $42 billion in two years' time.
Critical minerals in fast lane
Along with China's economic malaise, the department noted that rapidly rising interest rates across the globe were also weighing on commodity prices.
A bright spot for Australia's exporters was the critical minerals industry, with the agency noting that soaring demand for green tech, such as renewable energy and electric vehicles, was propelling sales to record highs.
It said the combined value of minerals needed for the energy transition surged to $46 billion in the most recent financial year.
Although this figure was expected to ease, sales were forecast to remain above $40 billion a year for the rest of the outlook period.
Federal Resources Minister Madeleine King said lithium —an essential mineral to many modern-day batteries —was the most valuable of the critical metals.
But she said Australia had an abundance of many others including cobalt, nickel, manganese, and graphite.
"The latest Resources and Energy Quarterly underlines the government's plan to support the development of our critical minerals sector, to make Australia a clean-energy superpower, and to help Australia and our trading partners meet commitments to lower emissions," Ms King said.
"The road to net zero runs through the resources sector.
"Australia is well positioned to supply long-term demand for base metals and critical minerals such as lithium, which are crucial components of clean-energy technologies such as batteries, solar panels, and wind turbines."
