Coal recovery helps fuel record resource earnings

A mighty coal comeback is helping power record Australian resources earnings, with a $349 billion overall figure forecast for 2021-22. Metallurgical coal prices have hit new peaks in recent months, as supply shortages meet rebounding global industrial production. The latest edition of the Resources and Energy Quarterly from the Department of Industry, Science, Energy and Resources is tipping Australia’s exports of the commodity to rise from 171 million tonnes in 2020–21 to 186 million tonnes by 2022–23. At the same time Australia’s metallurgical coal export values are forecast to reverse most of their recent decline, rebounding from $23 billion in 2020–21 to $32.8 billion in 2021-22. However the Australian premium hard coking coal price is expected to ease from an average US$162 a tonne in 2021 to US$159 a tonne in 2022 and US$152 a tonne by 2023, with the earnings forecast for 2022-23 sitting at $30 billion. Thermal coal export values are forecast to rise from $16 billion in 2020-21 to $24 billion in 2021-22, before easing back to $19 billion in 2022-23. Australian thermal coal exports declined from an all-time high 213 million tonnes in 2019-20 to 192 million tonnes in 2020–21, as a result of COVID-19, the report states. But exports are expected to recover to 212 million tonnes by 2022–23, as Asian economies return to normal conditions The Newcastle benchmark price is forecast to average US$101 a tonne in 2021, easing slowly to US$71 a tonne by 2023 The September edition of the Resources and Energy Quarterly forecasts overall Australia resource export earnings to hit $349 billion in 2012-22, before falling back to around $299 billion in 2022-23. It follows a record $310 billion in 2020-21. The Resources and Energy Quarterly (REQ) contains the Office of the Chief Economist’s forecasts for the value, volume and price of Australia’s major resources and energy commodity exports. Minister for Resources, Water and Northern Australia Keith Pitt said the the forecast export earnings for 2021-22 were close to $100 billion higher than they were a year ago during the peak of the global pandemic. “This forecast growth in both export values and volumes will help create further jobs and opportunities in the resources sector, particularly across regional Australia," he said. “We should take every opportunity to thank the industry for what it has achieved throughout the COVID outbreak, and to thank the hard-working men and women who are the backbone of the industry.” Australia’s iron ore export earnings are forecast to drop from a record $153 billion in 2020-21 to $132 billion in 2021-22, due to lower world prices, although export volumes are expected to grow steadily from 868 million tonnes in 2020-21 to 939 million tonnes by 2022-23. A stronger outlook for base metals and coal, and the noticeable decline in the Australian dollar over the past three months, have offset that impact on export earnings. The report finds Australia overtook China as the world’s largest gold producing country in the first half of 2021. Gold export earnings are forecast at $29 billion in 2021-22, before a decline to $27 billion in 2022-23, as gold prices ease back. Australian LNG export earnings are forecast to increase from $30 billion in 2020-21 to $56 billion in 2021-22, as oil-linked contract LNG prices rise sharply. Lithium export earnings are forecast to increase from $1.1 billion in 2020-21 to $3.8 billion in 2022-23. This will be driven by increased spodumene production, and exports of lithium hydroxide after first production occurred in August 2021. The latest Resources and Energy Quarterly is available on the Department of Industry, Science, Energy and Resources website.

Coal recovery helps fuel record resource earnings

Industry Queensland

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