Forecast weakens for resources export earnings

Australian resource and energy export earnings are forecast to decline by around 10 per cent in 2024–25, dropping to $372 billion from $415 billion last financial year. The forecast, in the latest Resources and Energy Quarterly (REQ), is weaker than previously tipped and reflects expected declines in bulk commodity prices. The main changes seen since the June 2024 REQ include: The iron ore price recently fell below $US100 a tonne, on the back of weak Chinese demand. Weakness in metallurgical coal prices as weakness in the steel sector impacts on metallurgical coal demand. Base metals prices have generally declined, on the back of weakness in the Chinese property sector. The prices of lithium and nickel remain weak due to market surpluses. On the up side, the gold price has hit new record highs since the June 2024 REQ, driven by expectations of interest rate declines, the lower US dollar, central bank buying and Chinese household demand for alternative investments amid property and share market weakness. The REQ report - produced by the Department of Industry, Science and Resources - also highlights opportunities presented by the demand for commodities used in the manufacture of battery energy storage systems (BESS), including vanadium. It points to a number of risks to the forecasts of resource and energy exports from Australia. These include higher-than-normal odds of a La Niña weather episode in 2024–25. This raises the risk of wet weather and flooding that could impact both production at Australian mines and the transportation of mine products and supplies. Resources Minister Madeleine King said the latest forecasts in the September 2024 REQ underscored the ongoing importance of the sector to Australia’s economic wellbeing. “Despite reductions in some bulk commodity prices, there have been record gold prices and ongoing gains in iron ore export volumes,” Ms King said. “The resources and energy sector continues to underpin Australia’s economy and support more than a quarter of a million direct jobs.” She said the data pointed to higher demand for resources essential for low-emissions technologies such as copper, aluminium and lithium. “Lower prices for critical minerals underline the need for government support for our critical minerals sector through policies such as the Production Tax Incentive,” Ms King said. “Measures such as the Critical Minerals Production Tax Incentive and the newly established Minerals Security Partnership Finance Network signed with partners such as the United States, India, the Republic of Korea, Japan and the United Kingdom will help create jobs and prosperity for future generations." Opposition resources spokeswoman Susan McDonald described the quarterly update as a damning indictment that Labor’s anti-mining policies were crippling Australian jobs and Australian income. "This latest report highlights the impacts of two years of compounded anti-mining policies,” Senator McDonald said. "In the June quarter alone, mineral exploration expenditure has fallen by 10 per cent. We know this will only now get worse as a result of Labor’s decision to try and scuttle the Blayney Gold Mine in New South Wales." In just 10 months, since Labor let the Western Australian nickel industry collapse, nickel export volumes were set to collapse by 67 per cent, at a cost of $2.1 billion in lost earnings, she said. “It is clear that the government has no capability to support our traditional commodities, let alone support the development of our critical minerals sector, and Australian miners deserve better.” Export earnings are forecast to fall to $354 billion in 2025–26 but then level out and start to rebound. While earnings forecasts are lower due to lower global commodity prices, export volumes are forecast to rise marginally over the coming two years.

Forecast weakens for resources export earnings

Industry Queensland

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